California Energy Commission
Renewable Energy
in California
Rasa Keanini and Heather Raitt
Renewable Energy Program
Efficiency, Renewables & Demand Analysis Division
November 16, 2005
California Energy Commission
Renewables Legislation
GOAL: Pursue investments in renewable resources to achieve
self-sustaining renewable energy supply for California.
 AB 1890 and SB 90 created the Renewable Energy
Program and directed the large investor-owned utilities to
collect $540 million from 1998 – 2002.
 SB 1038 authorizes Renewable Energy Program to
allocate and distribute $675 million collected from IOU
ratepayers 2002 - 2006.
 SB 1078 established Renewables Portfolio Standard,
requires IOUs to increase renewable purchases by 1% per
year until total reaches 20% of their purchases by 2017,
within certain cost restraints.
 SB 67 and SB 183 clarified RPS eligibility requirements.
 AB 200 addresses RPS requirements for Sierra Pacific and
PacifiCorp.
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California Energy Commission
CA Renewables Portfolio Standard
Goal: To increase diversity, reliability, public health and
environmental benefits of California’s energy mix.
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RPS signed into law in 2002
Legislative goal of 20% of retail sales from renewables by
2017, with increase by at least 1% per year
In 2003, state energy agencies set goal of 20% by 2010
– 20% in 2010 is estimated to be about 56,000 GWh
•California’s technical potential is more than 260,000 GWh/yr
•Technical potential for western-region is 3.7 million GWh/yr
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Energy Commission’s Integrated Energy Policy Report
recommends more ambitious goal for post-2010
Governor Schwarzenegger’s goal is 33% by 2020
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California Energy Commission
CEC-CPUC RPS Collaboration
CPUC ROLE
CEC ROLE
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Certify eligible facilities
Establish criteria for
“incremental” output from
existing geothermal facilities
Award and distribute
supplemental energy payments
Develop accounting system to
track and verify RPS
compliance
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Set RPS baseline & procurement targets
Approve/ deny IOU procurement plans
Develop methodology for MPR, calculate
Develop least-cost-best-fit process IOUs
use to evaluate bids
Develop and implement rules for flexible
compliance
Set standard contract terms & conditions
Ensure that RPS solicitations are
competitive
Approve or reject proposed contracts
Define rules for ESPs & Community
Choice Aggregators
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California Energy Commission
California’s RPS Process
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CPUC calculates utilities’ annual procurement target
Utilities develop RPS procurement plans for CPUC approval
Generator applies to Energy Commission for certification as
eligible for the RPS
Utilities hold RPS solicitations for long-term delivery from RPS
eligible generators (10, 15, 20 years)
Each utility uses least-cost, best-fit evaluation process to rank
bids and selects “short list” of bidders
After utilities select short lists, CPUC calculates and announces
Market Price Referent (the estimated cost for a similar long-term
natural gas electricity product)

Winning bids priced higher than MPR may be eligible for supplemental
energy payments
 Contracts priced at or below MPR are considered reasonable
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California Energy Commission
California’s RPS Process, con’t.
 Utilities negotiate contracts with short-listed bidders and
sign contracts using standard terms and conditions.
 If contract is priced above MPR, generator applies for
supplemental energy payments from the Energy Commission
 Energy Commission evaluates public goods charge funds
availability for supplemental energy payments , subject to caps
 Energy Commission awards supplemental energy payments to
eligible RPS generators (new or repowered)
 Utilities request contract approval from CPUC
 CPUC approves or rejects contracts
 Generator begins providing electricity per RPS contract
 Energy Commission makes monthly supplemental
energy payments for generation
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California Energy Commission
Renewable Energy Certificate & CA RPS
• Allows the use of RECs for accounting purposes only
• CPUC Decision www.cpuc.ca.gov/word_pdf/FINAL_DECISION/27360.doc
“…we will need a clear showing that a REC trading system
would be consistent with the specific goals of [CA’s RPS
including providing public health, economic development, job
creation, and environmental benefits to California], would not
create or exacerbate environmental justice problems, and
would not dilute the environmental benefits provided by
renewable generation.”
• Various bills introduced this year proposed allowing unbundled
RECs for RPS compliance, but such provisions were struck out
• CA RPS Standard Contract Terms and Conditions define
“Environmental Attributes”
www.cpuc.ca.gov/Published/Final_decision/37401.htm (June 9, 2004)
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California Energy Commission
Delivery Requirement
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RECs and electricity must be sold together as a bundled product to
satisfy CA RPS compliance
– www.cpuc.ca.gov/word_pdf/FINAL_DECISION/27360.doc (June 19, 2003)
– Adopts ”…the general presumption that all environmental and renewable
attributes associated with the production of electricity be transferred to the
utility and retired…”
– The transfer of environmental attributes for RPS compliance need not
include fuel related subsidies or local subsidies received by the generator
for the destruction of particular pollutants
•
CPUC requires the IOUs to allow bids for delivery anywhere in CA ISO
and IOUs may accept delivery to non-CA ISO points in-state
– www.cpuc.ca.gov/WORD_PDF/FINAL_DECISION/48266.DOC (July21,
2005)
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Delivery requirement applies to in-state and out-of-state facilities
Out-of-state facilities annually report to Energy Commission their
compliance with RPS delivery requirements by submitting NERC tags
as described in RPS Guidebook
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California Energy Commission
Progress in Meeting the
Renewables Portfolio Standard
PG&E
SCE
SDG&E
TOTAL
167 – 190
121 – 345
358
646 – 893
84 – 99
37
0
120 – 135
Geothermal (MW)
0
30 – 120
0
30 – 120
Biomass (MW)
18
12 – 37
75
106 – 131
Solar Thermal Electric (MW)
0
500 – 850
300 – 900
800 – 1750
Small Hydropower (MW)
0
0
5
5
269 – 306
700 – 1389
738 – 1338
1707 – 3033
Total Incremental Supply (GWh/yr)
~ 970
~ 1780 – 4160
~ 2310 – 3560
5050 – 8690
Total Incremental Supply as a
Percentage of 2004 Load (%)
1.3%
2.4% - 5.7%
14.6% - 22.5%
3.1% - 5.4%
Wind (MW)
Wind Repowering (MW)
Total Capacity (MW)
Includes all contracts for new renewable energy capacity submitted to or approved by the CPUC since 2002.
Table updated through October 28, 2005. Capacity additions do not include four contracts that SCE signed
under its 2002 interim RFO, as at least one of those contracts has subsequently been terminated
(TrueSolar), and information on the resource type and/or project size of the other three is not publicly
available. Total incremental renewable energy capacity and supply derives from data submitted to the CPUC
(Advice Letter filings and RPS compliance reports), and from other data (for SDG&E, new renewable energy
contract information from before its 2004 RFO came from SDG&E’s website; assumed capacity factors were
used to convert MW to GWh - 35% for wind, 23.9%for solar thermal electric [same as SCE’s solar thermal
contract], and 85% for biomass).
RPS contracts executed to date are priced at or below the MPR and will not need supplemental energy
payments.
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California Energy Commission
Barriers to Renewable Resource Development
Addressed through current RPS
• Lack of long term purchase agreements for electricity
Needs further work
• Need new/upgraded transmission to access remote renewables
• Ensure electricity grid reliability with integration of large amounts of
intermittent renewables
• Repower aging wind facilities and reduce the number of bird deaths
associated with the operation of wind turbines
• Avoid under-procurement due to contract failure, establish a
“contract-risk reserve margin” (e.g. delays due to difficulty getting
land easements, unanticipated increase in project costs…)
• Apply RPS targets consistently for all retail sellers (public utilities are
self regulated, no rules established yet for electric service providers,
community choice aggregators)
• Reduce administrative complexity, increase transparency
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California Energy Commission
Western Renewable Energy Generation
Information System (WREGIS)
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WREGIS is a tracking system for implementing CA's RPS
Developed by the Energy Commission and the Western
Governors' Association with input from stakeholders
This voluntary independent accounting system for the region
covered by the Western Electricity Coordinating Council will:
– create renewable energy certificates (WREGIS
Certificates) based on verifiable, reliable meter-read data
– support market participants in their transactions involving
WREGIS Certificates
– support regulators and voluntary program administrators
by providing information to assist in verification
The Energy Commission estimates WREGIS will be
operational early 2007
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California Energy Commission
Attribute Tracking Systems
WECC
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California Energy Commission
Why is WREGIS Important?
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Establishes a Western regional system to
register electricity generating units, and issue
and track renewable energy certificates.
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Provides a tool to support verification of
compliance with regulatory and voluntary
programs.
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Develops standard definitions and operating
guidelines for WREGIS participants.
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California Energy Commission
Renewables Portfolio Standard
Additional Information

Renewables Portfolio Standard Eligibility Guidebook
describes the criteria and process for certifying renewables as
eligible for California’s RPS & SEPs (Publication #500-04-001F)

New Renewable Facilities Program Guidebook
describes the requirements applicants must satisfy to receive
SEPs (Publication #500-04-026)
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Overall Program Guidebook for the Renewable
Energy Program describes how the Renewable Energy
Program will be administered (Publication #500-04-026)
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Documents available at: www.energy.ca.gov/portfolio
-click “documents page”
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