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Compliance, Penalties, and Flexibility

What is the RPS requirement?

California's RPS program requires electric corporations to increase procurement from eligible renewable energy resources by at least 1% of their retail sales annually, until they reach 20% by 2010.

Who is obligated to meet the RPS requirement?

All retail energy sellers in California are subject to the RPS, including investor owned utilities, energy service providers, community choice aggregators, and small and multi-jurisdictional utilities. Municipal utilities are not regulated by the CPUC but are directed by SB 1078 and SB 107, respectively, to design programs with similar goals and report annually to the Energy Commission on their progress.

For more information about publicly owned utilities and the RPS, please see Section V of the CEC's RPS Eligibility Guidebook.

Does the RPS program require procurement of renewable energy (kWh/year) or capacity (MW)?

California's RPS is based on procurement of renewable energy and does not set capacity targets. A load-serving entity satisfies its RPS obligation when eligible renewable energy is generated and delivered to its customers.

What flexibility is allowed for compliance?

Without CPUC approval, load-serving entities (LSEs) are allowed to carry, for up to three years, procurement deficits less than 25% of that year's incremental procurement target (the difference between the LSE's current and prior year annual procurement targets). Deficits greater than 25% of that year's incremental procurement target may be carried forward without penalty if the LSE demonstrates to the CPUC an allowable reason for non-compliance, four of which are:

  1. Insufficient response to the RPS solicitation.
  2. Contracts already executed will provide future deliveries sufficient to satisfy current year deficits.
  3. Inadequate public goods funds to cover above-market renewable contract costs.
  4. Seller non-performance.
  5. Inadequate transmission.

Shortfalls in excess of 25% of the incremental procurement target are also permitted upon a persuasive showing of lack of effective competition; that a deferral would promote ratepayer interests and the overall procurement objectives of the RPS program; or upon showing of good cause.

For more information, see the Compliance & Reporting section.

What is the penalty for non-compliance?

The penalty for an RPS procurement deficit is 5 cents per kWh , up to $25 million per year.


Last Modified: 11/25/2009

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