Gino DiCaro

Renewable Power Catching On

By Gino DiCaro, VP, Communications

Capitol Update, April 8, 2005 Share this on FacebookTweet thisEmail this to a friend

Renewable power is catching on with state policymakers, both in Sacramento and at the California Public Utilities Commission (CPUC) and California Energy Commission (CEC).

The trend started in 2002, with the enactment of legislation establishing a Renewable Portfolio Standard (RPS).  SB 1078 (Byron Sher, D-Stanford) required investor-owned utilities (IOUs) and certain other retail sellers to increase their level of renewable resources by one percent a year until a 20 percent renewable portfolio is achieved.  The RPS requirement applies only to the extent that Public Goods Charge (PGC) funds are available to pay for costs exceeding a market benchmark price established by the CPUC.

"The Energy Action Plan", a joint agency policy document adopted by the CPUC, CEC, and the now-defunct California Power Authority, accelerated the RPS goals to 20 percent by 2010, instead of 2017.  Governor Schwarzenegger has voiced support for the accelerated RPS goals, and an administration-sponsored bill this year, AB 1585 (Sam Blakeslee, R-San Luis Obispo) would codify the 20 percent by 2010 goal.

The IOUs have conducted RPS solicitations and are well on their way to meeting the accelerated 2010 target.

CMTA supports the goal of ensuring that the state has a diverse portfolio of energy resources.  At the same time, all generation resources, including renewables, must be developed and brought online in a cost-effective manner.  This means a rigorous examination of the cost-effectiveness of resources, and a continuation of the present statutory cap on the PGC charge (which funds above-market RPS costs, and other renewable programs).
The recent utility solicitations indicate that prices for some renewable resources, including wind and biomass, have come down.  Only time will tell how cost-effective these and other renewable resources will prove to be in coming years.  In the meantime, it seems prudent to avoid codifying the accelerated RPS goals (20 percent by 2010, instead of 2017) so as to give the CPUC and utilities more flexibility should the goals prove more difficult to attain in the future.


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