2. Background
2.1. Program Background
Within the larger obligation to provide safe and reliable electricity at just and reasonable rates, the RPS Program seeks to increase the amount of California's electricity generated from renewable resources. We do this to meet several purposes including, but are not limited to: increasing the diversity of generation resources, enhancing electric reliability, protecting public heath, improving environmental quality and benefits, promoting stable electricity prices, stimulating economic development, creating new employment opportunities, and reducing reliance on foreign fuels. (§ 399.11.)
To achieve RPS Program objectives, each California retail seller is required to procure a minimum quantity of electricity from eligible renewable energy resources as a specific percentage of total retail energy sales. Each retail seller is also required to increase its total procurement of electricity from eligible renewable resources each year by 1% of total sales, reaching 20% by 2010. The Governor, Commission, and California Energy Commission (CEC) have each endorsed a further goal of reaching 33% by 2020.
Eligible renewable resources are determined by the CEC, and may include some or all of the following: photovoltaic, wind, geothermal, solar thermal, biomass, digester gas, landfill gas, small hydroelectric, in-conduit hydroelectric, hydroelectric incremental generation from efficiency improvements, ocean wave, ocean thermal, tidal current, fuel cells using renewable fuels, and use of municipal solid waste. A retail seller is an entity engaged in the retail sale of electricity to an end-use customer located in California. Retail sellers include electrical corporations, community choice aggregators (CCAs) and electric service providers (ESPs).
In collaboration with the CEC, the Commission must implement and administer the RPS Program. We do so by requiring each retail seller to meet five minimum standards.3 We monitor RPS goals and results. This includes directing the calculation of annual procurement targets (APTs), and setting dates for periodic reports. We conduct compliance reviews and enforcement, as necessary. We also require a limited number of electrical corporations to prepare a comprehensive renewable energy procurement plan.4 We review these RPS plans; accept, modify or reject each plan; and oversee electrical corporation solicitations.
2.2. Procedural Background
On August 22, 2001, in anticipation of the passage of SB 1078, the Commission ordered the three major utilities to solicit electricity generated by renewable resources in an amount of at least an additional one percent of the utility's actual energy and capacity needs. (Decision (D.) 02-08-071.) We began specific implementation of the RPS legislation in R.01-10-024 upon SB 1078 becoming effective. As required by the Legislature, within six months we adopted the first of several decisions to set initial parameters and requirements.5 (D.03-06-071.)
In April 2004, we opened R.04-04-026 to continue implementation of the RPS program. We addressed many issues.6 We closed R.04-04-026 in May 2006. 7
In anticipation of closing R.04-04-026, we opened R.06-02-012 in February 2006. This permitted continuing work on specific RPS matters, such as implementation of the RPS Program for other retail sellers (e.g., SMJUs, ESPs and CCAs), exploration of the use of contracts of less than 10 years' duration, and examination of RECs.
We also needed a vehicle for more generalized ongoing implementation and administration. To do that, in May 2006, we opened R.06-05-027. We have addressed several matters in R.06-05-027.8 Today we close R.06-05-027 and open this proceeding as its successor. We transfer the record from R.06-05-027 to this new proceeding and bring forward limited remaining issues.
3 These include (a) increasing annual procurement by at least 1% each year, (b) achieving 20% by 2010, (c) reporting progress to the Commission, (d) utilizing flexible compliance mechanisms, and (e) being subject to uniform penalty procedures and potential penalties. (See, D.05-11-025, Ordering Paragraph 1.)
4 A procurement plan must be filed by Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E). An Integrated Resource Plan (IRP), or a Supplement to an IRP, must be filed by PacifiCorp and Sierra Pacific Power Company.
5 These included: (a) a process for determining the market price of electricity, (b) criteria for the rank ordering and selection of least cost-best fit (LCBF) renewable resources, (c) flexible compliance rules, and (d) an approach to forming standard contract terms and conditions.
6 These included: adoption of a market price referent (MPR) methodology; adoption of standard contract terms and conditions; adoption of criteria for selection of LCBF renewable resources; conditional approval of RPS plans and requests for offers for the 2005 solicitations; conditional approval of long-term RPS plans; establishing the basic parameters for participation by small and multi-jurisdictional utilities (SMJUs), ESPs and CCAs; adoption of the 2005 MPR methodology; and conditional approval of RPS plans for the 2006 solicitations.
7 R.04-04-026 was closed by D.06-05-039.
8 These have included: reporting and compliance methodology, conditional acceptance of 2007 and 2008 procurement plans, modifications to standard terms and conditions, plus granting and denial of various intervenor compensation requests.
