TODAY’S STUDY: CALIFORNIA’S NEW ENERGY AMBITIONS

This year’s Renewable Energy Policy Network for the 21st Century (REN21) report on the progress of renewables internationally attributed much of the sector’s growth to policies such as the renewable energy standard (RES), known in California and among policy wonks as the renewable portfolio standard (RPS).

“Renewable energy support policies continued to be a driving force behind the increasing shares of renewable energy,” REN21 noted. “National targets now exist in at least 98 countries…”

An RES/RPS requires electricity providers to obtain a specified portion of their power from New Energy sources by a specific year.

California’s RES/RPS certainly falls into the category of a policy successful at driving growth. As detailed in the quarterly progress report highlighted below, the California standard has driven and is driving one of the more successful renewables pushes in the U.S. and the world.

Though the state’s utilities fell short of the goal of obtaining 20 percent of their power from New Energy by the end of 2010, they are very close and expect to meet the goal sometime in 2011.

And it is just getting started. Note this paragraph, near the foot of the material below:

“On April 12, 2011, Governor Brown signed into law Senate Bill 2…SB 2 (1x) requires California energy providers to buy 33 percent of their energy from clean, renewable energy sources by 2020…provides a clear statutory directive for public utilities in addition to IOUs, ESPs, and CCAs to reach 33 percent renewable energy…[and] provides a clear signal to financial markets of the importance and need for renewable projects in the state...”

The push is on. Unfortunately, there is pushback.

Rural residents of the state’s most renewables-rich regions are asking why they should have to endure upheaval to their bucolic homes so Los Angeles and San Francisco can have more electricity?

The Owens Valley raised the same concerns after the budding LA megalopolis claimed its agricultural water supplies for its own consumption, as chronicled in the dark and infamous movie classic Chinatown.

Governor Brown recently told a conference of renewables developers, “some kinds of opposition you have to crush.” Promising support from his office, he added “you have to push” or “we’re not going to get to the goal.”

The goal is more New Energy in service to a greater good of moving away from the spew and toxic waste of the Old Energies.

Wind and solar projects also promise jobs and revenues. In pursuit of the state renewables standard and the economic benefits, builders dismiss opponents as NIMBYs and Luddites. In reply, locals protest that “green energy is destroying a green environment.”

Vandalism at some wind project sites looks a lot like eco-sabotage. Threats have been publicly voiced about comparable action against solar power plants whose developers fail to sufficiently consider local impacts.

Locals distant from centers of big power demand don't see the spew and toxic waste of the Old Energies and don’t see how the greater good does them any good. They also don’t believe many of the corporate promises of mitigations that come their way.

“NextEra has no intention of doing the right thing,” one said at a recent town council meeting of a wind project developer. “If you don’t believe in it, fight it.”

In response to the Town Council President’s warning that “there are forces out there more powerful than we can imagine,” the local replied, “I don’t bow to pressure.”

Yet the state’s RES promises much more pressure.

When the greater good collides with an adamant minority, it is always interesting. That's Chinatown.

Renewables Portfolio Standard Quarterly Report
2Q 2011 (California Public Utilities Commission)

Executive Summary

Status of RPS Procurement

• Collectively, the large IOUs reported in their August 2011 Compliance Filings that they served 17.0% of their electricity with RPS-eligible generation in 2010. PG&E served 15.9% of its 2010 load4with RPS-eligible renewable energy, SCE with 19.3%, and SDG&E with 11.9%. While the RPS target is 20% by 2010, the CPUC has implemented flexible compliance rules that allow load serving entities to defer deficits for up to three years when using an allowable excuse.

• Nearly 300 MW of new renewable capacity has achieved commercial operation in 2011, for a total of 2,001 MW of new renewable capacity since the program began in 2002. An additional 777 MW is forecasted to achieve commercial operation by the end of the year.

• The IOUs have submitted 36 contracts representing 2,100 MW of renewable generation in the first and second quarters of 2011. In the same time period, the CPUC approved seven contracts representing 800 MW of renewable generation.

click to enlarge

Highlights of Recent and Upcoming Events

• On April 12, 2011, Governor Brown signed into law Senate Bill 2 of the First Extraordinary Session (Simitian, SB 2 (1x)). SB 2 (1x) requires California energy providers to buy 33 percent of their energy from clean, renewable energy sources by 2020.

• On May 5, 2011, the CPUC opened Rulemaking (R.) 11-05-005, the successor proceeding to R.08-08-009. R.11-05-005 continues the implementation and administration of the California Renewables Portfolio Standard (RPS) Program.

• From May to June 2011, the IOUs held their 2011 RPS solicitations to procure renewable energy and tradable renewable energy credits.

• CPUC staff reconvened the Rule 21 Working Group on April 29, 2011 in order to ensure that the Rule 21 tariff contains the most up-to-date standards for operation of distributed generation within the utility-controlled distribution grid. The CPUC will continue to lead the Rule 21 Working Group as a consensus-building forum where utilities, generators, and other stakeholders can reach agreement on modifications to the technical standards embedded in Rule 21. The next workshop is scheduled for August 19, 2011.

• The IOUs, ESPs, and CCAs submitted RPS Compliance reports on August 1, 2011. In response to the CEC’s recent verification of 2007 RPS procurement, these reports include verified RPS procurement data through 2007. The reports also include unverified (self-reported) renewable procurement data for the years 2008 to 2010, and forecasted renewable procurement data out to 2020.

click to enlarge

PROGRESS TOWARDS A 20% RPS BY 2010

New Renewable Capacity Added in 2011

To date, 2,001 MW of new renewable capacity has achieved commercial operation under the RPS program. Almost 300 MW of new renewable capacity has come online in 2011, with an additional 777 MW forecast to come online by the end of the year.

Since 2002, the CPUC has approved 191 contracts for nearly 17,000 MW of renewable capacity. As Table 1 below shows, the CPUC approved seven contracts in the first and second quarters of 2011. A total of 36 contracts were submitted in the first and second quarters of 2011, consisting solely of solar PV and wind projects. Twenty of the 31 contracts submitted in the first quarter were from SCE’s Renewable Standard Contract program, totaling 263 MW.

click to enlarge

RPS Compliance

The CPUC requires two compliance filings per year. The March 1 compliance report is used to show compliance for the previous year(s). It includes historic performance in the RPS program, current year targets and procurement data, and forecasts targets and procurement data for at least three years. The August 1st report includes historic performance in the RPS program, current year targets and procurement data, and forecasts targets and procurement levels for each year forward through 2020. The August report may be used by the Commission to make a final determination of compliance for the prior year(s) when it includes verified data from the CEC.

The IOUs, ESPs, and CCAs submitted RPS compliance reports on August 1, 2011. In response to the CEC’s recent verification of 2007 RPS procurement, these reports include verified RPS procurement data through 2007. The reports also include unverified (self-reported) renewable procurement data for the years 2008 to 2010, and forecasted renewable procurement data out to 2020.

In the August 2011 compliance reports, the large IOUs reported that they served 17.0% of their electricity with RPS-eligible generation in 2010. PG&E served 15.9% of its 2010 load with RPS-eligible renewable energy, SCE with 19.3%, and SDG&E with 11.9%. While the RPS target is 20% by 2010, the CPUC has implemented flexible compliance rules that allow load serving entities to defer deficits for up to three years when using an allowable excuse.

The 1st Quarter 2011 RPS Report to the Legislature stated that the IOUs had served 17.9% of their electricity with RPS-eligible generation in 2010. This difference is explained by a change in PG&E’s compliance filings. In the March 2011 report, PG&E reported that it served 17.7% of its 2010 load with RPS-eligible renewable energy, which was contingent upon the CPUC approving several contracts. In the August 2011 report, PG&E reported that it served 15.9% of its 2010 load with RPS-eligible renewable energy, which does not include the pending contracts under CPUC review.

click to enlarge

PROGRAM UPDATE

Senate Bill 2 (1x): 33% RPS Legislation

On April 12, 2011, Governor Brown signed into law Senate Bill 2 in the First Extraordinary Session...SB 2 (1x) requires California energy providers to buy 33 percent of their energy from clean, renewable energy sources by 2020. SB 2 (1x) also provides a clear statutory directive for public utilities in addition to IOUs, ESPs, and CCAs to reach 33 percent renewable energy.8 Additionally, it provides a clear signal to financial markets of the importance and need for renewable projects in the state...The CPUC is currently implementing the legislation through Rulemaking (R.) 11-05-005.

New RPS Rulemaking

On May 5, 2011, the CPUC opened R.11-05-005, the successor proceeding to R.08-08-009. R.11-05-005 continues implementation and administration of the RPS Program, which includes program oversight, review of RPS procurement plans, and RPS compliance.

The RPS Rulemaking will address program modifications pursuant to SB 2 (1x). These changes, among other things, set an RPS procurement target of 33% of retail sales by 2020, and require establishment of cost containment limits.

Parties participating in the rulemaking have requested that the Commission address a limited number of critical issues in this proceeding first, recognizing that many important issues will not be in this highest priority group.

click to enlarge

The four highest priority items include:

1. Implementing the new portfolio content categories, set out in new § 399.16. Ruling mailed for party comment on July 12, 2011.

2. Setting new RPS procurement targets mandated by new § 399.15(b)(2)(A). Ruling mailed for party comment on July 15, 2011.

3. Implementing the most urgent new compliance rules and resolving initial “seams” issues between compliance rules for the 20% RPS program and new 33% RPS program compliance rules set by SB 2 (1x). Ruling mailed for party comment on July 15, 2011.

4. Implementing new § 399.20, expanding the prior feed-in tariff provisions for RPS-eligible generation. Ruling mailed for party comment on June 28, 2011.

In addition to these four highest priority items, the proceeding will also address the new cost limitation methodology for utilities mandated by new § 399.15(c) as soon as feasible. Table 2 below lists the proceeding milestones and timing.