Renewable Auction Mechanism

Renewable Auction Mechanism Program

The Renewable Auction Mechanism (RAM) program is a procurement program the Investor-owned Utilities (IOUs) may use to procure RPS eligible generation. The IOUs may use RAM to satisfy authorized procurement needs, for example, system Resource Adequacy needs, local Resource Adequacy needs, RPS needs, reliability needs, Local Capacity Requirements, Green Tariff Shared Renewables needs, and any need arising from Commission or legislative mandates. 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.

RAM is designed to facilitate quick simple transactions where projects can come online relatively sooner. IOUs must explain in their annual RPS procurement plan filings, starting with the 2015 annual RPS procurement plans filings how any proposed RAM could satisfy an authorized procurement need. RAM procurement is characterized by a standard non-negotiable contract and a standardized valuation process. Projects must go through a Phase II Interconnection Study and must be online within 36 months with a six month extension for regulatory delay. RAM-eligible projects can be located within the CAISO control area or must be dynamically scheduled into the CAISO.

Procedural History

In 2010, the Commission adopted the Renewable Auction Mechanism (RAM) program through Decision (D.) 10-12-048 to create a simplified market based procurement process for smaller RPS generation projects. The RAM program started as 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. In D.10-12-048, the Commission initially authorized the utilities to procure 1,000 megawatts ( 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. On November 20, 2014, the Commission issued D.14-11-042 adopting one additional RAM auction, RAM 6 to close by June 30,2015.  Beyond RAM 6, the Decision adopted a revised RAM process characterized by the following:

  • The revised RAM program does not have mandated procurement targets but instead allows the IOUs to determine the need for a RAM solicitation to meet a Commission authorized need or any need arising from legislative mandates.
  • The revised RAM program does not cap projects at 20 MW but allows the IOUs to determine the optimal maximum project size for any procurement targeted through RAM.
  • The revised RAM does not limit the geographic location of projects to the service territory of the three IOUs but instead expands the geographic location to the entire CAISO control area and also includes resources that can be dynamically scheduled into the CAISO.

RAM Auctions

Sixth RAM Auction

On November 20, 2014, the Commission issued D.14-11-042 reforming the RAM program. The Decision adopted one additional RAM auction, RAM 6 with mandated procurement targets, under a structure similar to past RAM auctions, to close by August 21, 2015.

Fifth RAM Auction

The fifth RAM auction closed on June 27, 2015. The Commission approved 29 contracts for a total 417.7 MW resulting from approving the following advice letters:

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:

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.

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:

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:

Compliance Reports

Annual RAM Program Compliance Reports

First annual RAM Program Compliance Reports.

Second annual RAM Program Compliance Reports.

Third annual RAM Program Compliance Reports

Resolutions

Resolution E-4655: Approval of Solicitation Protocols for RAM V

The Commission adopted Resolution E-4655 on May 15, 2014 to modify the SCE’s, PG&E’s, and SDG&E’s RAM solicitation protocols and pro forma PPAs before the fifth RAM auction.

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.

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.

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.

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 ordered the IOUs to close the first auction by November 15, 2011, and the second auction by May 31, 2012.

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 36 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:

  • Frequency of Auctions: Each utility may hold as many as needed specified in RPS procurement plan
  • Products: Projects will be compared against similar product type: baseload, peaking, intermittent.

Project Eligibility and Viability:

  • Project Location: In the CAISO balancing area or dynamically scheduled into the CAISO
  • 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 file

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

To contact Commission Staff please go to the RPS Contact Us page.

For specific utility information: