6. Enforcement

Parties' comments focus less on enforcement of the minimum quantity requirement than on other aspects of implementation of § 399.14(b)(2). CCSF specifically proposes that no penalties be imposed for failure to meet § 399.14(b)(2) requirements. Because these requirements are not a separate element of the RPS program, and do not add to the APT obligations of LSEs, we agree that penalties are not an appropriate enforcement tool.

Other parties commenting on enforcement tend to assume that the requirements would continue in force for a period of years, but do not address the consequences of failure to meet the requirements. We believe that the process we have outlined provides clear and direct enforcement of the § 399.14(b)(2) mandate, without burdening LSEs with deficits that carry over from year to year. If, in one calendar year, an LSE does not sign long-term contracts and /or contracts with new facilities for energy deliveries equivalent to 0.25% of its prior year's retail sales, no energy deliveries from any short-term contracts with existing facilities signed in that year may be counted toward the LSE's RPS obligations in any year. The next calendar year, however, the LSE starts fresh, unaffected by the previous year's failure to meet the minimum quantity.

We note that a failure to meet the minimum quantity requirement in one year will not necessarily expose an LSE to immediate penalties. If the LSE is unable to count energy deliveries from that year's short-term contracts with existing facilities for its RPS compliance, it may still avail itself of all existing flexible compliance mechanisms to defer compliance or excuse noncompliance. (See D.06-10-050.)