In addition to extending California’s RPS program goal from 20% in 2010 to 33% in 2020 and each year thereafter, Senate Bill 2 (1X) (Simitian, 2011) made two significant changes to RPS procurement rules. Specifically, Senate Bill 2 (1X) mandated new RPS procurement requirements within multi-year compliance periods and established new portfolio content categories for RPS procurement and set minimum and maximum limits on certain procurement that can be used for compliance with the RPS program.
33% RPS Targets
In Decision (D.) 11-12-020, the Commission implemented the new RPS procurement quantities established in Pub. Util. Code § 399.15(b), for all retail sellers (investor-owned utilities, community choice aggregators, and electric service providers). Compliance with California’s RPS program will be determined by the amount of renewable energy credits (RECs) retired for compliance within three multi-year compliance periods though 2020. The methodology for calculating RPS procurement requirements through 2020 applies a linear trend between the compliance period targets defined in SB 2 (1X); 20% by December 31, 2013, 25% by December 31, 2016 and 33% by 2020. In 2021 and later years, all retail sellers must procure 33% of their retail sales from RPS-eligible resources.
Renewable generation facilities may be located anywhere within the WECC region and sell energy and /or renewable energy credits (RECs) to a California retail seller of electricity to meet its RPS obligation, provided the facility meets all RPS-eligibility criteria established by the California Energy Commission (CEC). The CEC’s RPS Eligibility Guidebook is available here.
California’s RPS program defines all renewable procurement acquired from contracts executed after June 1, 2010 into three portfolio content categories, commonly referred to as “buckets.” In D.11-12-052, the CPUC implemented the new portfolio content categories established in Public Utilities Code § 399.16 (b), pursuant to SB 2 (1X).
The table below includes the key definitional characteristics of the portfolio content categories. Refer to D.11-12-052 for complete rules governing the classification of RPS procurement. The determination of whether RECs fall into Category 1, 2 or 3 for the purposes of compliance with RPS program will be made at the end of each compliance period.
Portfolio Balance Requirements
In addition to having to meet procurement quantity requirements to be incompliance with the RPS program, most retail sellers have specified requirements for the level of procurement from contracts executed after June 1, 2010. Specifically, these retail sellers must procure a minimum level of Category 1 RECs; the minimum level increases over the three multi-year compliance periods (Public Utilities Code § 399.16(c)). Also, there is a maximum limit on the amount of Category 3 procurement that may be used in each compliance period, which decreases over the same time frame. The graph below depicts the portfolio category limits and how they adjust across the compliance periods.