- The Renewable Auction Mechanism, or RAM, is a simplified and market-based procurement mechanism for renewable distributed generation (DG) projects up to 20 MW on the system side of the meter. The Commission adopted RAM as the primary procurement tool for system-side renewable DG because it will promote competition, elicit the lowest costs for ratepayers, encourage the development of resources that can utilize existing transmission and distribution infrastructure, and contribute to RPS goals in the near term.
To begin the program, the Commission authorized the utilities to procure 1,000 megawatts through RAM. Going forward, the capacity authorization will reflect each utility’s need for system-side DG under 20 MW.
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- RAM is a unique program because it streamlines the procurement process for developers, utilities, and regulators. It allows bidders to set their own price, provides a simple standard contract for each utility, and allows all projects to be submitted to the CPUC through an expedited regulatory review process.
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A detailed summary of the program can be found in Appendix A of the RAM Decision (D.10-12-048).
Pursuant to the Decision, the investor-owned utilities (IOUs) created interconnection maps in order to help sellers identify interconnection sites.
IOU Interconnection Maps
Recent Developments
The IOUs will close the first auction on November 15, 2011. Please visit the IOUs’ websites if you would like more information or plan on participating in an auction.
Current Status
The Commission approved Resolution E-4414 on August 18, 2011. The resolution ordered the IOUs to submit compliance filings with their modified bidding protocols and contracts 30 days from the resolution’s approval. The resolution orders the IOUs to close the first auction by November 15, 2011, and the second auction by May 31, 2012.
RAM Compliance Advice Letters
Per a 10 day extension, the IOUs filed their advice letters on February 25th, 2011. The IOUs were required to propose the types and amounts of products to procure, the bid protocol, and a standard contract. The Commission will review each advice letter, and once approved, the utility will start the solicitation process.
On July 13, the Energy Division issued Draft Resolution E-4414, which approves with modifications the IOU RAM advice letters. Draft Resolution Comments
For questions, please contact Jaclyn Marks at jm3@cpuc.ca.gov or 415-703-2257.
Primary elements of the program
Standard Contract: Each utility will develop its own standard RAM contract. The contracts must contain a few standard terms and conditions, some of which include:
- Project must be online within 18 months of contract execution, with one allowable 6-month extension for regulatory delays.
- Development deposit for projects 5 MW and smaller = $20/kW. For projects 5-20 MW = $60/$90/kwW for intermittent and baseload resources, respectively.
- Performance deposit for projects < 5 MW: conversion of development deposit to performance deposit. For projects at least 5 MW: 5% of expected total project revenues.
Market-based Pricing:
- Sellers compete for a contract in a renewable auction mechanism.
- Bids are selected by least-cost price first until the auction capacity is reached.
- Price (and contract) is not negotiable and is paid as bid.
Auction Design:
- Program Capacity: 1,000 MW for the first 2 years, allocated to each utility:
| |
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|
UTILITY |
TOTAL PROGRAM (MW) |
PER AUCTION (MW) |
|
SCE |
498.4 |
124.6 |
|
PG&E |
420.9 |
105.2 |
|
SDG&E |
80.7 |
20.2 |
|
TOTAL |
1,000.0 |
250.0 |
- Frequency of Auctions: Each utility will hold two RAM auctions per year.
- Products: Projects will be compared against similar product type: baseload, peaking, intermittent.
Project Eligibility and Viability:
- Project Capacity: Up to 20 MW
- Project Location: In one of the utility’s service territories
- Site Control: 100% site control through (a) direct ownership, (b) lease or (c) an option to lease or purchase that may be exercised upon award of a RAM contract
- Development Experience: One member of the development team has (a) completed at least one project of similar technology and capacity or (b) begun construction of at least one other similar project
- Commercialized Technology: Project is based on commercialized technology
- Interconnection Application: Interconnection application has been filed