California
Incentives/Policies for Renewables & Efficiency
|
 |
Last DSIRE Review: 09/17/2009
| Incentive Type: |
Renewables Portfolio Standard |
| State: |
California |
| Eligible Renewable/Other Technologies: |
Solar Thermal Electric,
Photovoltaics,
Landfill Gas,
Wind,
Biomass,
Geothermal Electric,
Municipal Solid Waste,
Anaerobic Digestion,
Small Hydroelectric,
Tidal Energy,
Wave Energy,
Ocean Thermal,
Biodiesel,
Fuel Cells using Renewable Fuels
|
| Applicable Sectors: |
Municipal Utility,
Investor-Owned Utility,
Retail Supplier
|
| Standard: | 20% by 2010;
33% by 2020 |
| Technology Minimum: | No |
| Credit Trading: | No (under discussion) |
|
Web Site: |
http://www.cpuc.ca.gov/renewables
|
|
Authority 1:
|
CA Public Utilities Code § 399.11 et seq.
|
| Date Enacted: | 2002 (amended 2003, 2006) |
| Date Effective: | 1/1/2003 |
|
Authority 2:
|
Public Resources Code § 25740 et seq.
|
|
Authority 3:
|
Executive Order S-21-09
|
| Date Enacted: | 9/15/2009 |
| Date Effective: | 9/15/2009 |
|
|
Summary:
California’s Renewables Portfolio Standard (RPS) was originally established by the legislature in 2002. Subsequent amendments to the law resulted in a requirement for California’s investor-owned electric utilities to increase their sales of eligible renewable-energy resources by at least 1 percent of retail sales per year, so that 20% of their retail sales are derived from eligible renewable energy resources by 2010. On September 15, 2009, the Governor signed Executive Order S-21-09*, which increased the requirement to 33% by 2020, and made the requirement apply to all utilities, including publicly-owned municipal utilities. Prior to the Executive Order the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) were responsible for implementing and overseeing the RPS. The Executive Order shifted that responsibility to the California Air Resources Board (CARB), requiring them to adopt regulations by July 31, 2010. CARB is required by current law, AB 32 of 2006, to regulate sources of green house gasses to meet a state goal of reducing greenhouse gas emissions to 1990 levels by 2020, and an 80% reduction of 1990 levels by 2050.
The CEC and CPUC are expected to serve in advisory roles to help the CARB develop the regulations to administer the 33% by 2020 requirement. Additionally, the CEC and the CPUC will continue their implementation and administration of the 20% requirement. The Executive Order also stipulates that the CARB may delegate to the PUC and the CEC any policy development or program implementation responsibilities that would reduce duplication and improve consistency with other energy programs. The CARB is also authorized to increase the target and accelerate and expand the time frame.
Technologies eligible for the RPS include photovoltaics; solar thermal electric; wind; certain biomass resources; geothermal electric; certain hydroelectric facilities; ocean wave, thermal and tidal energy; fuel cells using renewable fuels; landfill gas; and municipal solid waste conversion, not the direct combustion of municipal solid waste. To qualify for the RPS the electricity either needs to be produced in-state, or produced out-of-state and delivered into the state. For most technologies the facility had to have been constructed after September 26, 1996 to be counted towards the RPS. Qualifying small power production facilities (QFs) either located in California, or that began selling electricity to a California utility prior to September 26, 1996 under a standard contract authorized by the CEC may also be counted for compliance with the RPS.
Until the CARB regulations are adopted, the CEC and CPUC will continue serving in their current roles to administer the 20% by 2010 standard.
The CEC's roles are to: - Certify eligible renewable resources that meet statutory requirements; and
- Design and implement a tracking and verification system to ensure that renewable energy output is counted only once for the purpose of the RPS and for verifying retail product claims in California or other states
The CEC has adopted two Guidebooks describing its RPS program requirements:- The Renewables Portfolio Standard Eligibility Guidebook describes the eligibility requirements and process for certifying renewable resources as eligible for California's RPS and describes the Energy Commission’s implementation of a tracking system to verify compliance with the RPS.
- The Overall Program Guidebook describes how the Energy Commission's Renewable Energy Program is administered.
To meet California’s RPS reporting requirements and the renewable energy tracking needs of 14 states and two Canadian provinces in the Western Electricity Coordinating Council (WECC), the Energy Commission and the Western Governors’ Association have jointly developed the Western Renewable Energy Generation Information System (WREGIS), which began operation in June 2007. Presently, California must purchase renewable energy credits which are bundled with the electricity they represent; unbundled REC’s may not be used to comply with the RPS.
The CPUC is charged with: - Establishing the standard terms and conditions to be used by all IOUs in contracting for eligible renewable energy resources. Standard contracts are available for terms of 10, 15, and 20 years.
- Implementing flexible rules for compliance with annual renewable procurement targets, such as applying excess renewable procurement in one year to a deficit in another year. If a retail seller fails to procure sufficient renewable energy, the CPUC will impose a penaltiesy of 5 cents for every kWh by which they are short in meeting their requirement, with a cap of $25 million per utility per year.
- Reviewing and approving each IOU’s procurement plan and its process for selecting the least cost bidders of renewable energy that best fit that utility’s resource needs. IOUs use these processes to select winning bidders from their solicitations to procure renewable electricity. The CPUC decision conditionally approving the IOUs’ 2007 procurement plans is available here.
- Determining market price referents (MPRs) for electricity from non-renewable sources. The MPR establishes a benchmark at or below which approved RPS bid contracts will be considered reasonable. The CPUC’s resolution establishing the 2006 MPR is available here.
Click here for more information about the CPUC's responsibilities.
* SB 14 of 2009 was approved by the Legislature and sent to the Governor on September 12, 2009. Citing his dissatisfaction with the final bill language and certain provisions within the bill, the Governor vowed to veto SB 14, and instead issued an Executive Order to establish the 33% by 2020 requirement.
|
|
|
 |
Please note: The information on the DSIRE web site provides an overview of incentives and other policies, but it should not be used as the only source of information when making purchasing decisions, investment decisions, tax decisions or other binding agreements. Please refer to the individual contact provided in each record to verify that a specific incentive or other policy is applicable to your specific project.
|
