III. Fundamental Aspects of RPS Applicable to All Entities

Given that we have determined above that the Legislature intended that ESPs and CCAs be subject to the RPS program requirements but that the Commission should determine the manner in which those entities participate, we conclude that we have discretion to make these determinations on a policy basis. Using this same logic, it is reasonable to conclude that the Legislature intended that the ESPs and CCAs meet the RPS program goals, but that the "manner" in which these entities meet the program goals is up to the Commission to determine.

In harmonizing the portions of Section 399.12, we conclude that there are certain fundamental aspects of the RPS program that should apply to all entities subject to the RPS, regardless of their characteristics. This is consistent with the argument that CCSF puts forward. The first fundamental aspect is the requirement that all entities, including ESPs, CCAs, and small and multi-jurisdictional utilities subject to the RPS, meet the RPS requirement of providing 20% of their retail sales from renewables. This is the RPS requirement at its most basic level.

Green Power also points out that SB 1078 requires every electrical corporation to "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 renewable energy resources no later than December 31, 2017." (Green Power Reply Brief, p. 3, emphasis in original, citing Section 399.15(b)(1).) Green Power argues that the addition of the phrases "at least an additional 1 percent" and "no later than December 31, 2017" would be rendered surplusage if the statute was interpreted to mean "only an additional 1 percent" and "by December 31, 2017."6

As we stated in Decision (D.) 03-06-071, SB 1078 sets an annual procurement target (APT) of 1% as the minimum requirement the Commission can impose, not the maximum. (Id., p. 46, footnote 38.) Green Power is correct that the Commission has the authority to set an APT for retail sellers "at greater than 1% per year and to direct retail sellers to meet the target by an earlier date than 2017." (Green Power Reply Brief, p. 3.) That is precisely what we have done in the Energy Action Plan, and today we merely confirm that this requirement applies to ESPs, CCAs, small and multi-jurisdictional utilities, as well as to large utilities.

Along with that, in order to determine these entities' progress in meeting these requirements, it follows logically that the Commission should have some authority to require reporting of renewable sales to retail customers by ESPs, CCAs, and small and multi-jurisdictional utilities. Thus, the Commission will exercise that authority and require that these entities report their RPS progress to the Commission.

The specifics of the reporting requirement will be established in a subsequent decision implementing ESP, CCA, and small and multi-jurisdictional participation in the RPS program. However, at this time we will request that ESPs, CCAs, and small and multi-jurisdictional utilities provide information about the current contents of their renewable portfolio, in a format and manner to be determined by the Assigned ALJ in coordination with Energy Division staff.

Finally, for policy and equity reasons, we also believe that all entities should be allowed the same flexible compliance mechanisms as the large utilities, as well as be subject to the same penalty structure and process. To the extent that these areas require further refinement or modification in their application to ESPs, CCAs, and/or small and multi-jurisdictional utilities, such issues will also be addressed in the decision implementing the participation of these entities in the RPS program.

In sum, we see that the Commission will be exercising its authority over ESPs, CCAs, and small and multi-jurisdictional utilities in five basic areas: 1) requiring meeting the 20% goal; 2) adding at least 1% of retail sales in renewable sales per year; 3) reporting progress toward these goals to the Commission; 4) utilizing flexible compliance mechanisms; and 5) being subject to penalties.

In the case of the first part, meeting the RPS requirement of 20% of retail sales from renewable sources, there is still the question of the deadline for that requirement. (See, e.g., AReM Opening Brief, pp. 9-10; CCSF Opening Brief, p. 6; PG&E Reply Brief, pp. 7-9.) In SB1078, the deadline for RPS full compliance is the end of 2017. In the first Energy Action Plan, adopted in 2003, the Commission and the California Energy Commission accelerated that deadline to 2010. Further, in the Order Instituting Rulemaking opening this proceeding, we made explicit the 2010 deadline for utilities. There is no explicit mention in the Energy Action Plan of 2003 or in this proceeding's OIR of the requirement for ESPs and CCAs, or for small and multi-jurisdictional utilities.

However, we clarify here that it is the Commission's intent that the 2010 deadline apply to all entities involved in RPS implementation. We believe that it is important to have a consistent deadline for RPS compliance for all entities in order not to create a competitive advantage or disadvantage of one retail provider over another in terms of the cost of electricity procured. Further, it is within the discretion the Legislature gave us in establishing RPS compliance rules for ESPs and CCAs to modify the deadline for meeting the 20% requirement.

6 This part of the argument probably should have been stated as "on December 31, 2017," rather than "by December 31, 2017."

Previous PageTop Of PageNext PageGo To First Page