posted on Tuesday, June 06, 2006 9:57 AM by Gunnar Birgisson

California PUC Proposals Aim to Put Ambitious Renewables Goals in Reach

California has one of the nation’s most ambitious renewable portfolio standards (RPS).  It requires the state’s utilities to procure 20% of their electric power from renewable resources by 2010.  Gov. Schwarzenegger has suggested raising this level even higher.  However, administrative complexities, transmission shortages (particularly in the wind-rich Tehachapi region), and other issues have slowed utilities' progress toward these goals.  With a series of decisions in late May, the California Public Utilities Commission (CPUC) hopes to accelerate RPS compliance.

The CPUC approved 2006 renewable energy procurement plans for PG&E, San Diego Gas & Electric and Southern California Edison.  In a decision with uncertain impact on independent renewable energy developers, the CPUC also encouraged the three large utilities to build their own renewable capacity. 

The CPUC also initiated a new rulemaking to address the annual RPS procurement cycle, reporting, compliance, and enforcement, as well as standard contract terms.  This rulemaking, however, would not resolve the issue of the use of renewable energy credits (RECs).  The state does not allow RPS compliance through trading and purchases of unbundled RECs (RECs sold separately from the energy produced by a generator).  The agency did, however, approve a proposal allowing delivery of the renewable energy anywhere in the state; previously renewable energy had to be delivered to the applicable utility’s service area to be credited toward RPS compliance.  This change should help facilitate renewable energy transactions.