The question of the precise scope of those obligations remains open, however, as the statute does not provide additional guidance on this point. There are several options. TURN proffers a variety of ways in which the Commission could compel or encourage PG&E to procure renewable power, based in part on other statutory authorities. (See TURN Opening Brief, pp. 11-15.) While this would be the most consistent with the statute's overall policy goal of increasing procurement of renewable resources, it appears to conflict with the language of the statute. Since the Commission "shall not require an electrical corporation to conduct procurement to fulfill the renewables portfolio standard" until it is creditworthy, we will not require an electrical corporation to conduct that same procurement under a different guise.

Alternatively, the Commission could find that, in the absence of an investment-grade credit rating, no annual procurement target (APT) should be set for a given year.⁴ This is a more-plausible subset of PG&E's broader argument (PG&E Reply Brief, p. 12). This alternative can best be examined in relation to our other main choice: an APT that is set each year, regardless of a utility's credit status, but without associated procurement being required. CalWEA advocates this position, arguing that APT obligations are not extinguished by lack of creditworthiness, but are only deferred. (CalWEA Reply Brief, pp. 12-13.) With deferral of APT obligations, the compliance mechanism would need to be adjusted to compensate for the fact that no procurement would be made until the utility was deemed creditworthy.

The "no APT" option is easiest on the utility. Once it became creditworthy, it would then begin to procure renewable generation at a 1% percent per year clip, just like other creditworthy utilities. If the utility had an APT set (and deferred) prior to becoming creditworthy, once it became creditworthy it would be behind, and would have to play catch-up to make up the APT that accrued when it was not creditworthy. This could make procurement more difficult, and could give bargaining leverage to renewable generators at the utility's expense.

However, setting an APT for each utility in each year, regardless of the utility's credit rating, is more consistent with the statute's goal of reaching 20% renewable procurement. In addition, both PG&E and SCE have stated that they expect to be creditworthy very soon. Accordingly, very little catch-up would be necessary, so the burden on the utilities is minimal. In addition, we are only requiring the statutory minimum 1% per year annual procurement.⁵ The plain language of the statute, which requires an increase in procurement of renewable energy by at least an additional one percent each year, allows us to require even greater quantities. (§ 399.15(b)(1).) The fact that the utilities might have to procure more than 1% for a limited period of time is fully consistent with the statute.

However, just because a utility may have an APT before it becomes creditworthy does not mean that a utility should be penalized (or even considered out of compliance) for not procuring renewable energy prior to becoming creditworthy. The potential bargaining leverage gained by renewable generators is reduced if the utility does not risk penalties or a finding of non-compliance if it does not procure renewable energy. Accordingly, a utility's credit rating shall be taken into consideration under the topic of flexible rules for compliance, which is discussed in more detail below.

³ SCE, the other non-creditworthy utility, takes a less aggressive position than PG&E, and refers to "PG&E's unique position with respect to its creditworthiness in light of its bankruptcy." (SCE Reply Brief, p. 8.)