3. Overview of RPS Program, 2008 Plans and Commission Duties
Pursuant to the RPS Program, each retail seller is required each calendar year to procure, with some exceptions, a minimum quantity of electricity from eligible renewable energy resources as a percentage of total retail sales.2 This is generally known as the annual procurement target, or APT. Each retail seller is also required, with some exceptions, to increase its total procurement from eligible renewable energy resources by at least 1% of retail sales per year until it reaches 20%. This is generally known as the incremental procurement target, or IPT, and results in annual incremental growth in the APT. (§ 399.15.)
To fulfill these requirements, each electrical corporation must prepare a Plan for the procurement of renewable energy. The Plan must include, but is not limited to (a) an assessment of demand and supply to determine the optimal mix of renewable resources, (b) use of compliance flexibility mechanisms established by the Commission, and (c) a bid solicitation. The Commission must review and accept, modify or reject each electrical corporation's Plan prior to the commencement of renewable resource procurement. (§ 399.14.) The Plans are summarized in Appendix C.
We have, in fulfilling our duties and allowing electrical corporations to fulfill theirs, followed an approach of "flexibility with accountability." That is, we have granted RPS-obligated electrical corporations considerable flexibility in the way they satisfy RPS Program goals. In exchange, each electric corporation must meet its RPS Program targets, within application of flexible compliance criteria. The Program includes penalties for unexcused failures to meet targets.
While we accept, reject or modify each procurement Plan before a particular solicitation, we neither write any Plan nor dictate with precise detail the specific language of any Plan. Rather, each electric corporation has considerable flexibility to develop and propose its own plan. Our review is at a reasonably high level.
Nor do we take over the procurement process. Procurement duties remain those of each IOU. Each IOU is ultimately responsible for achieving successful procurement using its Plan pursuant to, and consistent with, the RPS Program. Our responsibility involves reviewing the results of solicitations, and accepting or rejecting proposed contracts when submitted for approval, based on consistency with approved Plans. (§ 399.14(d).) The Plans accepted herein will be a fundamental, but not necessarily the only part of that review (as described in prior decisions, including Decision (D.) 06-05-039, D.07-02-011 and also below).
We have conditionally accepted prior Plans, provided guidance, taken steps to broaden and enhance the quantity and quality of RPS bids, and improved the contracting process.3 We continue to do so here, taking into account relatively limited comments from four parties. Finally, we do not repeat existing Commission directions, requirements and guidance. All existing directions and guidance remain unchanged unless specifically addressed otherwise herein.
2 Exceptions include, for example, flexible compliance provisions.
3 For example, we require IOU Plans to: (a) include consideration of proposals with delivery points anywhere in California, (b) incorporate reasonable margins of safety (e.g., allowing for some possible project delays or failures while still meeting Program targets), (c) include interest on deposits, and (d) clearly state the evaluation criteria used in the least cost-best fit (LCBF) selection process. We have also adopted revised STCs for model contracts which, as revised, provide increased contracting flexibility. (See, for example, D.06-05-039, D.07-02-011 and D.07-11-025.)
