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RPS California
(Last updated July 1st, 2004)
RENEWABLE PORTFOLIO
STANDARDS-STATE SUMMARY
I. POLICY
II. ADMINISTRATION
III. FINANCING
IV. CRITICAL ELEMENTS
V. POLICY/PROGRAM ASSESSMENT
VI. PUBLIC OUTREACH
AND EDUCATION
I. POLICY
Date Enacted
September 12, 2002
Effective Date
September 12, 2002
Time Period
January 1, 2003 - December 31, 2017
Extensions to Time Period
None to date
Applicable Laws, Orders, and Regulations
SB 1078 (2002) - California Renewables Portfolio Standard Program
http://www.leginfo.ca.gov/pub/bill/sen/sb_1051-1100/sb_1078_bill_20020912_chaptered.pdf
SB 1038 (2002) - Renewable Energy
http://www.leginfo.ca.gov/pub/bill/sen/sb_1001-1050/sb_1038_bill_20020912_chaptered.pdf
AB 57 (2002) - Electrical Corporations: Procurement Plans
http://www.leginfo.ca.gov/pub/bill/asm/ab_0051-0100/ab_57_bill_20020703_enrolled.pdf
Description
This is a renewable portfolio standard requiring 20% percent
of the generation for retail sales be sourced from eligible
renewables by 2017. Utility cost recovery for renewable purchases
comes from two sources; (1) recovery for contract costs up to
the market price in retail generation rates, (2) above market
costs covered by California's Renewable Resource Trust Fund,
a public benefit fund. Above-market costs are paid directly
to sellers, not to utilities.
The California Public Utilities Commission (CPUC) will establish
annual procurement targets for each electrical corporation.
An initial baseline for these targets will be based on the actual
percentage of retail sales procured from eligible renewable
energy resources in 2001. The CPUC will then develop a schedule
whereby the % renewable requirement increases each year until
the requirement reaches a 20% minimum standard for retail generation
in 2017. The CPUC must ensure an increase of at least 1% per
year.
The CPUC will also establish market prices for electricity.
The CPUC shall make specific determinations of market prices
after the closing date of a competitive solicitation conducted
by an electrical corporation for eligible renewable energy resources.
In order to ensure that the market price established by the
commission does not influence the amount of a bid submitted
through the competitive solicitation in a manner that would
increase the amount ratepayers are obligated to pay for renewable
energy, and in order to ensure that the bid price does not influence
the establishment of the market price, the electrical corporation
shall not transmit or share the results of any competitive solicitation
for eligible renewable energy resources until the CPUC has established
market prices.
Retail sellers are required to meet renewable targets set by
the CPUC, provided sufficient funds are made available from
the New Renewable Resources Account of the Renewable Resource
Trust Fund to cover the above-market costs for new renewable
energy resources. An electric corporation shall not be required
to enter into long-term contracts with eligible renewable energy
resources that exceed the market prices established by the CPUC.
Retail sellers include electrical corporations, community choice
aggregators, and electric service providers. Corporations or
persons employing cogeneration technology, the Department of
Water Resources, and local publicly owned electrical utilities
are exempt from the RPS requirements.
Because this legislation has only recently been passed, many
details of its implementation are yet to be determined through
the rulemaking process. The CPUC has 90 days to develop renewable
procurement plans, and than another 6 months to adopt rules
implementing the RPS.
Program Name
Renewables Portfolio Standard
Standard
Beginning on January 1, 2003, each electrical corporation shall
increase its total procurement of eligible renewable energy
resources by at least an additional 1 percent of retail sales
per year so that 20 percent of its retail sales are procured
from eligible sources by 2017. For purposes of setting annual
procurement targets, the commission shall establish an initial
baseline for each electrical corporation based on the actual
percentage of retail sales procured from eligible renewable
energy resources in 2001, adjusted as may be required.
Compliance Year |
Standard |
| 2003
|
1%
above 2002 "baseload renewable" retail kWh sales |
| 2004–2016
|
Increasing
by a minimum of 1% over previous year renewable retail
kWh sales. Specific targets are to be established by the
CEC. |
| 2017
|
20%
of retail kWh sales |
Eligibility Date
Eligible facilities placed in operation after September 26,
1996, and facilities operational prior to that date that were
qualifying small power production facilities (QFs) under CFR
Title 18 either located in California, or that began selling
electricity to a California electrical corporation prior to
September 26, 1996, under a Standard Offer Power Purchase Agreement
authorized by the CEC. Certain new hydropower facilities are
not eligible.
Contracts
An electric corporation shall not be required to enter into
long-term contracts with eligible renewable energy resources
that exceed the market prices established by the CPUC.
Generation Limit
Hydroelectric plants must be 30 MW or less
Fuels/Technologies
Fuels and technologies eligible under the RPS are defined in
four categories:
(i) Facilities meeting the definition of ‘‘in-state renewable
electricity generation technology’’ as defined in CPUC Code
383.5. Specifically:
Biomass
Solar thermal
Photovoltaic
Wind
Geothermal
Small hydropower (30 MW or less)
Ocean wave, ocean thermal, or tidal
current
Waste tire
Digester gas
Landfill gas
Municipal solid waste conversion
Municipal solid waste conversion is
allowed; MSW combustion is not allowed. Solid waste conversion
means a technology that uses a noncombustion thermal process
to convert solid waste to a clean burning fuel for generating
electricity. Exception: MSW combustion located in Stanislaus
County and operational prior to September 26, 1996 is allowed
(only). Facilities engaging in the combustion of municipal solid
waste or tires are not eligible for receipt of RPS supplemental
funding for above-market costs. Biomass not meeting the requirements
of 383.5(d)(6)as specified in SB 1038 is also not eligible for
supplemental funding.
(ii) A geothermal generation facility originally commencing
operation prior to September 26, 1996
(iii) Small hydroelectric generation facility of 30 megawatts
or less placed in service before September 12, 2002. A new hydroelectric
facility is not an eligible renewable energy resource if it
will require a new or increased appropriation or diversion of
water under Division 2, Part 2 of the California Water Code.
(iv) MSW combustion located in Stanislaus County and operational
prior to September 26, 1996 (only).
II. ADMINISTRATION
Administering Entities
California Public Utilities Commission (CPUC)
Type of Entity
State
Administrative Contacts
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102
Phone: (415) 703-2782
Fax: (415) 703-1758
Web site: http://www.cpuc.ca.gov
III. FINANCING
Funding Level
The Renewable Resource Trust Fund is capitalized at $135 million
per year, with $540 million collected between 1998-2001, and
another $1.35 billion to be collected from 2002-2012. At least
fifty one and one-half percent (51.5%) of these funds go into
the New Renewable Resources Account, which will be used to offset
above-market costs of RPS compliance.
Funding Source
The CPUC shall provide supplemental energy payments from funds
in the New Renewable Resources Account in the Renewable Resource
Trust Fund to eligible renewable energy resources to cover above-market
costs of renewable energy. Indirect costs associated with the
purchase of eligible renewable energy resources shall not be
eligible for supplemental energy payments, but shall be recoverable
by an electrical corporation in rates, as authorized by the
CPUC.
Cost Cap
Cost reimbursement under the RPS is limited by the quantity
of funds in the New Renewable Resources Account. Above-market
costs claimed by electricity providers are required to be just
and reasonable.
Charge
The Renewable Resource Trust Fund is funded by a non-bypassable
ratepayer charge of $0.002/kWh - $0.003/kWh on retail sales.
Actual amount varies by utility. Indirect costs of RPS compliance
may be recovered through the rate base, pending CPUC approval.
IV. CRITICAL ELEMENTS
Trading
Trading renewable energy certificates has not yet been addressed.
Green Pricing
Eligibility of power sold under green pricing contracts has
not yet been addressed.
Certification
The CEC shall certify eligible renewable energy resources and
design and implement an accounting system to verify compliance
with the renewables portfolio standard by retail sellers, to
ensure that renewable energy output is counted only once for
the purpose of meeting the renewables portfolio standard of
California or any other state, and for verifying retail product
claims in California or any other state.
Out-of-State
Out of state facilities are eligible under the RPS if they sell
into California.
Self-generation
RPS credit for customer "behind-the-meter" distributed generation
has not yet been addressed.
Flexibility
In the event that an electrical corporation fails to procure
sufficient eligible renewable energy resources in a given year
to meet the RPS target, the electrical corporation shall procure
additional eligible renewable energy resources in subsequent
years to compensate for the shortfall if sufficient funds are
made available from the state New Renewable Resources Account
to cover the above-market costs of eligible renewables. If supplemental
energy payments from the CEC, in combination with the market
prices approved by the commission, are insufficient to cover
the above-market costs of eligible renewable energy resources,
the CEC shall allow an electrical corporation to limit its annual
procurement obligation to the quantity of eligible renewable
energy resources that can be procured with available supplemental
energy payments.
V. POLICY/PROGRAM ASSESSMENT
Reporting Requirement
Each local publicly owned electric utility shall report, on
an annual basis, to its customers, (1) expenditures of public
goods funds collected for renewable energy resource development,
and (2) the resource mix used to serve its customers by fuel
type. Because a violation of the Public Utilities Act or an
order of the CPUC is a crime under existing law, the RPS legislation
will impose penalties for not complying with state-mandated
programs by creating a new crime.
Assessing Entity
California Public Utilities Commission
Report Date
Report Date: November 19, 2003
Report Name
The Renewables Committee Final Renewable Resources Development
Report (Commission Publication number 500-03-080FD) http://www.energy.ca.gov/reports/2003-11-24_500-03-080F.PDF
For a full listing of RPS-related reporting, see the SB 1038
Proceeding Documents Page at http://www.energy.ca.gov/renewables/02-REN-1038/documents.
Status
As of April 2004, the California Public Utilities Commission has issued an
Order Instituting Rulemaking to Establish Policies and Cost Recovery Mechanisms
for Generation Procurement and Renewable Resource Development to better track
compliance with the RPS.
The development report states that approximately 11 percent,
or roughly 30 billion kilowatt hours, of the state's total electricity
production today comes from renewable resources. The report
concludes that cost trends for production of renewable electricity
suggest that the Renewable Portfolio Standard policy is economically
feasible. The report indicated that many renewable technologies
are close to cost parity with conventional power sources and
that renewable costs have been declining and will continue to
do so. In addition to the 2003 Renewable Resources Development
Report, on May 8, 2003, the California Energy Commission, the
California Public Utilities Commission, and the California Power
Authority adopted an Energy Action Plan that accelerates the
renewable-energy target to reaching 20 percent renewable generation
by 2010 instead of 2017. The Energy Action Plan is available
at http://www.energy.ca.gov/2003_energy_action_plan/2003-05-08_ACTION_PLAN.PDF.
Cost Information
The current benchmark cost for renewale energy is at 5.37 cents
kW/h. For those contracts that go above the market benchmark,
the system benefit fund pays the difference—provided there
is available funding.
Assessment Contact
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102
Phone: (415) 703-2782
Fax: (415) 703-1758
Web site: http://www.cpuc.ca.gov
VI. PUBLIC OUTREACH AND EDUCATION
Outreach/Customer Education
CPUC Electric Industry Page
http://www.cpuc.ca.gov/static/industry/electric/index.htm
CEC Consumer Energy Center
http://www.consumerenergycenter.org
CEC Renewable Energy Program
http://www.energy.ca.gov/renewables/index.html
Press Releases
California Energy Commission News Releases
http://www.energy.ca.gov/releases/index.html
California Public Utilities Commission News Room
http://www.cpuc.ca.gov/static/news+room/index.htm
Attachments:
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