5. Next Steps

Section 399.16 allows us to authorize the use of TRECs for RPS compliance, but does not require us to do so. We will examine the pros and cons in a forthcoming decision. If we allow the use of TRECS, we will also set rules for a TREC market and for integrating the use of TRECs into RPS compliance rules.

In addition, § 399.16(a)(1) requires that:

Prior to authorizing any renewable energy credit to be used toward satisfying annual procurement targets, the commission and the Energy Commission shall conclude that the tracking system established pursuant to subdivision (c) of Section 399.13, is operational, is capable of independently verifying the electricity generated by an eligible renewable energy resource and delivered to the retail seller, and can ensure that renewable energy credits shall not be double counted by any seller of electricity within the service territory of the Western Electricity Coordinating Council (WECC).

This Commission and the CEC decided to implement this statutory provision through a joint staff report evaluating the tracking system with respect to the statutory criteria. Both commissions released the Draft Joint Agency Staff Report in March 2008, proposing the criteria and the evaluation methods to be used in that determination. The CEC's Renewables Committee held a workshop on March 17, 2008 to receive public comment on the Draft Staff Report. Since that time, the two staffs have been collaboratively revising and developing final conclusions for the Report. Energy Division staff will issue the final Draft Report by means of a draft resolution. After public comment on the draft resolution and any necessary revisions to the Draft Report, both agencies will adopt the identical final Report. We will do so by resolution; the CEC will adopt the Report at one of its business meetings.

We will review STC 2 and other standard terms and conditions of bundled RPS contracts in the context of our examination of the use of TRECs for RPS compliance.

The assigned Commissioner and/or assigned ALJ may issue any rulings necessary for completion of these steps.

Outside of this proceeding, we intend to work with the WREGIS Committee and other stakeholders to clarify the definition of a REC in WREGIS to reduce confusion among WREGIS users about the value of the REC's attributes.

Further, we will continue to examine the GHG accounting implications of RPS procurement, especially with respect to RECs, in our work with the CEC advising ARB on AB 32 implementation issues.

Finally, we necessarily must consider the possibility that we will need to revisit some aspects of this decision. The landscape within which our RPS program functions is always changing, but a large number of changes may impact it in the near future. Our state may increase its RPS goals to 33% of retail sales by 2020. The full implementation of AB 32 may lead to other changes as well. In addition, the further development of regional GHG reduction strategies, expanded regional RPS goals, changes in WREGIS capabilities, and possible federal legislation may all lead us to review our RECs definition.