2. Introduction
In Pub. Util. Code § 399.11,1 the Legislature set up the renewables portfolio standard (RPS) program
[i]n order to attain a target of generating 20 percent of total retail sales of electricity in California from eligible renewable energy resources by December 31, 2010, and for the purposes of increasing the diversity, reliability, public health and environmental benefits of the energy mix. . . (§ 399.11(a).)2
In Senate Bill (SB) 107 (Simitian), Stats. 2006, ch. 464, the Legislature gave this Commission express authority to allow the use of tradable renewable energy credit (TRECs) for RPS compliance. Section 399.16 provides both the authorization and several conditions on its exercise.3
This decision implements this authorization in light of the overarching purposes of the RPS program. It seeks to improve compliance opportunities for RPS-obligated load-serving entities (LSEs) and to provide incentives for the construction of new RPS-eligible generation. The decision builds on several years of experience with planning, procurement, reporting, and compliance in the use of bundled energy contracts (contracts for delivery of energy and renewable energy credits (RECs)) for RPS compliance. It relies on the tools provided by the Western Renewable Energy Generation Information System (WREGIS) for recording, tracking, and trading TRECs in order to develop the market rules and integrate the use of TRECs into the RPS compliance framework.
1 RPS legislation is codified at Pub. Util. Code §§ 399.11-399.20. Unless otherwise indicated, all subsequent citations to sections refer to the Public Utilities Code, and citations to rules refer to the Rules of Practice and Procedure, which are codified at Chapter 1, Division 1 of Title 20 of the California Code of Regulations.
2 The Legislature also described the benefits to be expected from the RPS program:
(b) Increasing California's reliance on eligible renewable energy resources may promote stable electricity prices, protect public health, improve environmental quality, stimulate sustainable economic development, create new employment opportunities, and reduce reliance on imported fuels.
(c) The development of eligible renewable energy resources and the delivery of the electricity generated by those resources to customers in California may ameliorate air quality problems throughout the state and improve public health by reducing the burning of fossil fuels and the associated environmental impacts and by reducing in-state fossil fuel consumption.
(d) The California Renewables Portfolio Standard Program is intended to complement the Renewable Energy Resources Program administered by the State Energy Resources Conservation and Development Commission and established pursuant to Chapter 8.6 (commencing with Section 25740) of Division 15 of the Public Resources Code.
3 For ease of reference, § 399.16 is reproduced as Appendix A.
