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  • 1.  
  • 2. Presentation Overview
    • Renewables Portfolio Standard (RPS) program overview
    • Progress toward RPS targets
    • Project development barriers
    • Solutions for achieving RPS in a cost-effective and timely manner
  • 3. Overview of 20% RPS Program
    • All RPS-obligated retail sellers* must have procured an incremental 1% of retail sales (from baseline year) in renewable energy per year until 2010
    • 20% obligation starts in 2010 and continues indefinitely
    • California has a further goal of 33% by 2020
    • RPS satisfied by MWhs generated on system-side of meter and delivered to CA, when applicable
    • Bundled contracts only now, but potentially tradable RECs soon
    *RPS-obligated entities include: Investor owned utilities, energy service providers, small and multi-jurisdictional utilities, and community choice aggregators. Municipal utilities (not regulated by the CPUC) have a voluntary RPS obligation. All California retail energy sellers must procure 20% renewable energy by 2010
  • 4. RPS Program Goals
    • Statutory goals of the RPS include:
      • Diversifying California’s electricity supply for reliability, public health and environmental benefits
      • Promoting stable electricity prices by hedging against volatile natural gas prices
      • Stimulating sustainable economic development
      • Developing competitive procurement process to obtain least-cost, viable MWhs in a short time frame (“cost, risk, time”)
    RPS policy reflects statutory goals
  • 5. Status of RPS Procurement
    • CPUC has approved ~ 166 contracts for over ~ 13,000 MW of new and existing eligible renewable energy capacity
      • ~5,000 MW of long and short term contracts currently under review
    • ~1080 MW of projects under long-term contracts have come online since 2003, 50% out-of-state
    • ~1000 MW of projects under short-term contracts have come online since 2003; 99% out-of-state
    • Participation in RPS solicitations is increasing:
      • Greater participation from larger and more experienced developers
      • Dramatic increase in number of solar PV bids
      • 2009 RPS solicitation resulted in 100,000 GWh of bids
      • Shortlisted 2009 bids would meet half of IOUs’ 33% target
    Recent RPS solicitations have been robust
  • 6. RPS Procurement Process CPUC approves RPS procurement plans IOUs hold annual solicitation IOU rank bids pursuant to “least-cost, best-fit” methodology
    • Independent evaluator oversees solicitation, bid evaluation, and
    • negotiations
    • Utilities can also sign bilateral contracts
    IOUs negotiate bids, execute contracts Once the IOU executes contract, must submit to the CPUC for approval
  • 7. Utilities on Track for RPS Targets Almost at 33% on a contract basis – but some face risk
  • 8. Project Development Barriers
    • Of 140 approved contracts, 23 have been terminated and 10 are delayed (have missed commercial online date)
    • CPUC identifies and tracks the development barriers for each approved RPS project
    • Significant project development barriers:
    RPS solicitations attract larger projects, which face project development risk and take time to develop
    • Transmission
    • Permitting (CEC and County)
    • Site control (e.g., BLM application process)
    • Project financing
    • Developer experience
      • Technology maturity
      • Fuel supply
      • Equipment procurement
      • Military radar
  • 9. CPUC Working on Solutions
    • Tradable Renewable Energy Credits (TRECs)
      • Increases procurement options and increases competition
    • Renewable Energy Transmission Initiative (RETI)
      • Identifies most cost-effective renewable resource zones and transmission to access them
    • 33% Implementation Analysis
      • Analyses costs and tradeoffs between various 33% RPS scenarios
    • More robust long-term procurement planning methodology
      • Streamlining inputs and assumptions in utility procurement scenarios to understand their fossil needs in relation to all other demand and supply-side energy programs
    • Programs aimed at smaller system-side DG projects
      • To hedge against risk and timing of larger-scale RPS projects, programs for smaller RPS-eligible projects emerging
    CPUC is working to create multi-agency solutions to known barriers
  • 10. System-Side DG Programs SCE accepting bids in September 2010 N/A All technologies Up to 20 MW IPPs 250 SCE RSC Program At least 1 auction per year, implementation D.10-09-016 approved program, Staff to implement Solar PV Primarily ground-mount 1-5 MW 26 MW UOG 74 MW IPP 100 SDG&E Solar Program At least 1 auction per year, first in Q1 2011 Approved in D.10-04-052, Staff implementing Solar PV Primarily ground-mount 1-20 MW 250 MW UOG 250 MW IPP 500 PG&E Solar Program At least 1 auction per year, first in 4/2010 Fully Implemented (D.09-06-049) Solar PV Primarily rooftop 1-2 MW 250 MW UOG 250 MW IPP 500 SCE Solar PV Program (SPVP) Proposes 2 auctions per year Proposed Decision All technologies Up to 20 MW 3 large IOUs 1000 RAM Contracts accepted until cap reached CPUC working to implement for IOUs All technologies Up to 3 MW IOUs and municipal utilities 750 (incl. FIT) Senate Bill 32 Contracts accepted until cap reached Fully Implemented (D.07-07-027) All technologies Up to 1.5 MW All IOUs 500 Feed-In Tariff (AB 1969) Market Opportunity CPUC Status Eligible RPS Technologies and Project Size Participating Buyers and Sellers Program Size (MW)
  • 11. Renewable Auction Mechanism
    • Key program design elements of RAM include:
      • Standard Contract
        • Simple contract based on the IOUs’ existing feed-in tariff contract.
        • Terms and conditions are set before the auction and cannot be negotiated.
      • 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 cap is reached.
        • Price (and contract) is not negotiable and is paid as bid.
      • Project Viability
        • Minimum viability criteria to participate in the auction, e.g. 100% site control, developer experience constructing a project of similar technology and size.
        • Project development security, performance assurance (for >5 MW projects).
        • Project must be online within 18 months.
    CPUC may offer new simple, streamlined opportunity for system-side DG consistent with RPS goals
  • 12. Questions?
    • Sara Kamins
    • Senior Policy Analyst, RPS Team
    • California Public Utilities Commission
    • Phone: 415-703-1388
    • Email:
  • 13. RPS Solicitation Bids by Fuel Type Solar participation has increasing most dramatically
  • 14. Breakdown of Solar Bids by Technology