ALJ/AES/avs Date of Issuance 6/27/2012

Decision 12-06-038 June 21, 2012

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Continue Implementation and Administration of California Renewables Portfolio Standard Program.

Rulemaking 11-05-005
(Filed May 5, 2011)

DECISION SETTING COMPLIANCE RULES FOR THE
RENEWABLES PORTFOLIO STANDARD PROGRAM

TABLE OF CONTENTS

Title Page

DECISION SETTING COMPLIANCE RULES FOR THE RENEWABLES PORTFOLIO STANDARD PROGRAM 2 2

1. Summary 2 2

2. Procedural History 3 3

3. Discussion 6 6

3.1. Legislative Background 6 6

3.2. Plan of this Decision 7 7

3.3. Treatment of Prior Procurement 9 9

3.3.1. Section 399.15(a): Prior Deficits 10 10

3.3.1.1. Deficits for Years Prior to 2011 12 12

3.3.1.1.1. Prior Compliance Process 12 12

3.3.1.1.2. Determining "Deficit Associated With Any Previous Renewables Portfolio Standard" 15 15

3.3.1.2. Safe Harbor of 14% of 2010 Retail Sales 21 21

3.3.1.3. Satisfying Prior Deficits 25 25

3.3.2 Section 399.16(d): Contracts Signed Prior to June 1, 2010 28 28

3.3.2.1. Scope of Provision 28 28

3.3.2.2. Portfolio Content Categories 29 29

3.3.2.3. Other Statutory Provisions 30 30

3.3.2.3.1. Short Term Contracts 31 31

3.3.2.3.2. Excess Procurement That May
Be Carried Forward 32 32

3.3.2.3.3. Prior Banked Procurement
In Excess of APT 32 32

3.3.2.3.4. Amendments and Modifications 33 33

3.4. Authorization to Use Short Term Contracts 34 34

3.4.1. Long Term Contracting Requirement 36 36

3.4.2. Quantity of Long Term Contracting Requirement 38 38

3.4.3. Carry Over of Long Term Contracts 41 41

3.4.4. Duration of Long Term Contracting Requirement 42 42

3.4.5. Repackaged Contracts and Procurement Entities 44 44

3.4.6. Small and Multi-Jurisdictional Utilities 45 45

3.4.7. New Retail Sellers 46 46

3.4.8. Previous Short Term Contracts 47 47

3.5. Retirement of RECS 48 48

3.6. Quantitative Procurement Requirements 51 51

Title Page

3.6.1. Procurement Quantity Requirements 51 51

3.6.2. Portfolio Balance Requirements 52 52

3.6.2.1. Section 399.16(c)(2) 54 54

3.6.2.2. Section 399.16(c)(1) 55 55

3.7. Excess Procurement 61 61

3.7.1. Exclusions from Excess Procurement Calculation 62 62

3.7.2. Application of Excess Procurement 67 67

3.7.3. Small and Multi-Jurisdictional Utilities 69 69

3.8. Reporting 75 75

3.8.1. Compliance Reports 75 75

3.8.2. Special Transitional Reporting 78 78

3.9. Enforcement 79 79

3.9.1. Waiver of Enforcement of Procurement
Quantity Requirement 79 79

3.9.2. Reduction of Portfolio Balance Requirements 82 82

3.10. Bear Valley Electric Service RPS Procurement Contracts 83 83

3.11. Next Steps 84 84

4. Categorization and Need for Hearing 84 84

5. Comments on Proposed Decision 84 84

6. Assignment of Proceeding 85 85

Findings of Fact 85 85

Conclusions of Law 86 86

ORDER 95 95

APPENDIX A - Selected RPS Statutory Sections

APPENDIX B - Sample Closing Calculations

APPENDIX C - Flow Chart of Excess Procurement Methodology
for Compliance Period 1, 2 and 3

DECISION SETTING COMPLIANCE RULES FOR THE
RENEWABLES PORTFOLIO STANDARD PROGRAM

1. Summary

This decision implements changes to the rules for retail sellers' compliance with the renewables portfolio standard (RPS) program made by Senate Bill (SB) 2 (1X) (Simitian), Stats. 2011, ch. 1. This decision also sets the parameters for retail sellers to report to the Commission on their compliance with RPS requirements. This decision provides rules for retail sellers to:

· Calculate and resolve any net deficits in meeting their RPS annual procurement target (APT) obligations in 2010 and earlier years;

· Make use of the statutory "safe harbor" created by SB 2 (1X) to excuse certain prior APT deficits;

· Apply procurement from RPS procurement contracts or ownership agreements signed prior to June 1, 2010 to RPS procurement obligations in 2011 and later years;

· Carry forward banked procurement from contracts or ownership agreements signed prior to June 1, 2010, subject to certain limitations;

· Use procurement from contracts of less than 10 years' duration to meet RPS procurement requirements;

· Meet the procurement quantity requirements set in Decision 11-12-020;

· Apply excess procurement in one compliance period to future compliance periods, subject to certain limitations;

· Meet the portfolio balance requirements set forth in Pub. Util. Code § 399.16(c);

· Report annually to the Commission on RPS procurement and compliance and provide any additional information requested by the Director of Energy Division;

· Request a reduction of the portfolio balance requirements and/or a waiver of the procurement quantity requirements at the end of a compliance period.

· Report to the Commission within 60 days of the effective date of this decision on any net deficits in meeting APT for 2010 and prior years and on meeting the statutory safe harbor requirements.

This decision also authorizes the Director of Energy Division to develop any forms and information requirements necessary for retail sellers to submit the reports required by this decision.

This decision addresses the most immediate compliance requirements, but it does not complete implementation of rules for the enforcement of RPS obligations under SB 2 (1X). In subsequent decisions, the Commission will complete the enforcement rules, including details of the process for seeking reduction or waiver of RPS compliance obligations and the potential imposition of penalties for noncompliance with RPS obligations.

This proceeding remains open.