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Renewable Auction Mechanism

The Renewable Auction Mechanism, or RAM, is a simplified market-based procurement mechanism for renewable distributed generation (DG) projects greater than 3 MW and up to 20 MW(see, D.12-05-035, implementing the revised Section 399.20 Feed-in-Tariff and changing the minimum project size for RAM to projects greater than 3 MW) on the system side of the meter. The Commission adopted RAM in Decision (D.) 10-12-048 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.

In D.10-12-048, the Commission initially authorized the utilities to procure 1,000 megawatts (recently expanded to 1,299 MW by D.12-02-035 and D.12-02-002) through RAM by holding four auctions over two years. A fifth auction was authorized by Resolution E-4582 to take place no later than a year after the close of the fourth RAM auction.

The First RAM auction closed on November 15, 2011, resulting in CPUC approval of 13 renewable DG contracts for 145 MW in April 2012. The second RAM auction closed on May 31, 2012, resulting in CPUC approval of 17 contracts for 255 MW in Q4 2012. The third RAM auction closed on December 21, 2012, resulting in CPUC approval of 21 contracts for 337 MW in Q2 2013.

The fourth RAM auction closed on June 28, 2013.

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.

A detailed summary of the current program rules can be found in Appendix B (p. 27) of the most recent RAM Modification Resolution (Resolution E-4489).

Pursuant to D.10-12-048, the IOUs created interconnection maps in order to help sellers identify interconnection sites. Those maps are available at the links below:IOU Interconnection Maps

For questions about the RAM program, contact Shannon O'Rourke at shannon.o'rourke@cpuc.ca.gov or 415-703-5574.

 

Recent Developments

Annual RAM Program Compliance Reports
On January 17, 2014, PG&E, SCE and SDG&E filed their annual RAM Program Compliance Reports.

Results of the Fourth RAM Auction
The fourth RAM auction closed on June 28, 2013. The Commission approved 17 contracts for 239 MW resulting from this auction by approving the following advice letters:

 

Resolution E-4609: Improving the RAM Program

The Commission adopted Resolution E-4609 on September 19, 2013 to authorize PG&E, SCE and SDG&E to offer an amendment to RAM PPAs that were executed as a result of the first three RAM auctions.

 

Resolution E-4582: Improving the RAM Program

The Commission adopted Resolution E-4582 on May 9, 2013 to modify the capacity allocation targets for the fourth RAM auction and to authorize a fifth RAM auction.

 

Results of the Third RAM Auction
The third RAM auction closed on December 21, 2012. The Commission approved 21 contracts for 337 MW resulting from this auction by approving the following advice letters.

Resolution E-4546: Improving the RAM Program

The Commission adopted Resolution E-4546 on November 8, 2012 to modify the RAM program rules before the third RAM auction.

 

Results of the Second RAM Auction

The second RAM auction closed on May 31, 2012. The Commission approved 17 contracts for 255 MW resulting from this auction by approving the following advice letters: 

Resolution E-4489: Improving the RAM Program

The Commission adopted Resolution E-4489 on April 19, 2012 to modify the RAM program rules before the second RAM auction. Among other changes, this resolution made the following changes:

  • Extended the deadline for RAM projects to achieve commercial operation from 18 months after CPUC approval to 24 months after CPUC approval.
  • Created a new opportunity for developers bidding into future RAM auctions to have the option of bidding their project as either energy-only or as fully deliverable.

Results of the First RAM Auction

The first RAM auction closed on November 15, 2011. The Commission approved 13 contracts for 140 MW resulting from this auction by approving the following advice letters:

Resolution E-4414: Implementation of RAM

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  

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 24 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:

  • Current Program Capacity: 1,299 MW for the first 2 years, allocated to each utility:

Column 1 Column 2 Column 3

UTILITY

TOTAL PROGRAM (MW)

PER AUCTION (MW)

SCE

723.4

180.9

PG&E

420.9

105.2

SDG&E

154.7

38.7

TOTAL

1,299.0

324.8

  • 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




Last Modified: 2/28/2014



 
 
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