2. RPS Background
The California Renewables Portfolio Standard (RPS) Program was established by Senate Bill (SB) 10781 and codified by California Public Utilities Code Section 399.11, et seq. The statute required that a retail seller of electricity such as PG&E purchase a certain percentage of electricity generated by Eligible Renewable Energy Resources (ERR). Originally, each utility was required to increase its total procurement of ERRs by at least 1% of annual retail sales per year until 20% is reached, subject to the Commission's rules on flexible compliance, no later than 2017.
The State's Energy Action Plan I (EAP I) called for acceleration of this RPS goal to reach 20% by 2010.2 This was reiterated again in the Order Instituting Rulemaking (R.04-04-026) issued on April 28, 2004,3 which encouraged the utilities to procure cost-effective renewable generation in excess of their RPS annual procurement targets (APT),4 in order to make progress towards the goal expressed in the EAP. On September 26, 2006, Governor Schwarzenegger signed SB 107,5 which accelerates the State's RPS targets to 20% by 2010, subject to the Commission's rules on flexible compliance.6 During the past four years, California utilities including PG&E and San Diego Gas & Electric Company (SDG&E) have sought to increase the amount of eligible renewable energy procurement to meet RPS targets.
In addition to the 2010 mandate, in 2005 the EAP II set a more ambitious goal to reach 33% renewable energy by 2020.7 In 2005, the Governor called for an acceleration of the RPS to 33% by 2020. In 2008, the California Air Resources Board (CARB) adopted the Assembly Bill 32 (AB 32) Scoping Plan, which featured a 33% RPS as a central component of the state's greenhouse gas (GHG) abatement strategy.8
1 Chapter 516, statutes of 2002, effective January 1, 2003 (SB 1078).
2 The Energy Action Plan I was jointly adopted by the Commission, the California Energy Resources Conservation and Development Commission (CEC) and the California Power Authority. The Commission adopted the EAP I on May 8, 2003.
3 http://www.cpuc.ca.gov/Published/Final_decision/36206.htm.
4 A Load Serving Entity's (LSE) APT for a given year is the amount of renewable generation an LSE must procure in order to meet the statutory requirement that it increase its total eligible renewable procurement by at least 1% of retail sales per year.
5 Chapter 464, Statutes of 2006 (SB 107).
6 Public Utilities Code Section 399.14(a)(2)(C).
7 EAP II, released October 2005, supports and expands the commitment to cooperation among state agencies embodied in EAP I and reflected in the State's coordinated actions since adoption of EAP I.
8 Assembly Bill 32 (the Global Warming Solutions Act of 2006) led to a joint CPUC and California Energy Commission proceeding on regulatory strategies for reducing GHG emissions to 1990 levels by 2020. As a result of that proceeding, the Joint Commissions issued a Scoping Plan to the CARB, which included a recommendation of utilizing a 33% RPS mandate as one element of a diversified strategy for GHG emissions reductions in California.
