renewable portfolio standard (RPS) implementation
Achieving California's Renewable Portfolio Standard (RPS) goals will require California's regulated public utilities to acquire 20% of their electricity supply from renewable resources by 2010. Our state's energy regulatory agencies have the task of enforcing this mandate in a way that is most likely to succeed and most beneficial to ratepayers. With the continuing support of the Energy Foundation and our new-technology affiliates, CEERT has been a leading public-interest intervener in the California Public Utilities Commission RPS implementation proceedings, which are writing the rules for utilities' future acquisition and system integration of clean and renewable power supplies.
Summary:
CEERT priorities for implementation of the 33% RPS (SB 2) are the implementation of SB 32 (expanded feed-in tariff), revisions to RPS-eligible “products” pursuant to SB 2, changes in compliance requirements resulting from SB 2, and re-examination of project viability criteria and application to RPS projects.
CEERT filed briefs on SB 32 implementation, arguing that its provisions were lawful, that they represented an expansion of an existing FIT, and that the changes it called for could be accomplished quickly.
CEERT continued our active participation on all three tracks of the CPUC’s LTPP rulemaking. CEERT filed an opening brief supporting full integration of renewables into long-term procurement plans.
CEERT filed comments on a CPUC Proposed Decision, seeking to avoid rules that unnecessarily limit customer or designated third-party access to the customer’s Smart Grid energy usage data.
CEERT filed comments challenging a reduction in incentives and changes to eligibility in the Self-Generation Incentive Program.
Recent Developments:
Renewable Portfolio Standard (RPS) Program Implementation
In the last quarter of 2010, the CPUC continued to struggle to resolve whether and Through April, RPS Program implementation continued to focus on issues or proposals specific or tied to existing law. The authorization of tradable renewable energy credits (TRECs) (D.11-01-025) and approval of the Renewable Auction Mechanism (RAM) (D.10-12-048; D.11-04-008 (allowing bilateral negotiations) are decisions based on the 20% RPS law, including restrictions on TRECs authorization and use of a market price referent (MPR) reasonableness benchmark.
To date, the RAM advice letters that the investor owned utilities (IOUs) filed in late February 2011 have still not been approved, a result of still-pending petitions for modification of the underlying order. In this same time period, the Commission also authorized the IOUs’ RPS Procurement Plans and Solicitations for 2011, based on plans filed and amended from December 2009 through much of 2010 (D.11-04-030).
With the Governor’s signing of the 33% RPS bill (SB 2) in April, the focus has turned to the implementation of this law. The CPUC issued a new RPS rulemaking (R.11-05-005), succeeding and replacing R.06-02-012, R.06-05-026, and R.08-08-009, to deal with remaining issues related to RPS generally and amended and new requirements of SB 2. New Commissioner Mark Ferron has been assigned to this new rulemaking, with Simon and Mattson continuing as assigned ALJs, joined by ALJ Regina DeAngelis.
R.11-05-005 commenced with a call for comments from the parties on their initial priorities for the proceeding. CEERT was among the parties for whom the highest priorities were the overdue implementation of SB 32 (expanded feed-in tariff (FIT)), revisions to RPS-eligible “products” pursuant to SB 2, changes in compliance requirements resulting from SB 2, and re-examination of project viability criteria and application to RPS projects.
A prehearing conference (PHC) was held on June 13. At that time, the assigned Commissioner and ALJs confirmed that the initial priorities would focus on SB 32 implementation, RPS product definitions, and new compliance targets. ALJ Simon advised that the rulemaking would require a lot of input from the parties, but no further ruling has been issued as of this date seeking comment, setting a schedule, or confirming the scope of the proceeding. CEERT plans to continue our active role on these issues.
Feed-In Tariffs (FITs)
As noted above, Assigned Commissioner Ferron and the Assigned ALJs have confirmed that implementation of SB 32 (expanded FIT) will be an initial priority for the new RPS rulemaking. At the June 13 PHC, ALJ Simon also stated that parties would not be asked to brief or comment on issues related to SB 32 implementation on which comment had already been provided. In March, parties, including CEERT, filed detailed briefs on the legality and manner in which this law should be implemented.
In our briefs, CEERT demonstrated again that the provisions of SB 32 are lawful; that these provisions represent an expansion of an existing FIT, with which the CPUC already had experience; and that such changes could, and should, be accomplished quickly and be consistent with the statute. While no schedule for a decision has been set, CEERT has some hope that an order will be issued by the end of the year.
Long-Term Procurement Plan Proceeding
CEERT has continued our active participation on all three tracks of the CPUC’s LTPP rulemaking (R.10-05-006): Track I (system planning), Track II (bundled procurement plans), and Track III (procurement rules, greenhouse gas (GHG) product procurement, and bid evaluation issues). In May, the focus has been on Track II, the IOUs’ AB 57 procurement plans—the ten-year plans, with pre-approval of energy products required to meet the needs of the IOUs’ “bundled” customers from 2012 to 2021.
On May 4, CEERT served our prepared testimony, sponsored by Dr. Rich Ferguson (witness), in Track II. In this testimony, Dr. Ferguson reviews and supports, with limited proposed modifications, a proposal SCE made in its Track II testimony to include a renewables product among its AB 57 pre-approved procurement authority.
CEERT has long believed that full integration of renewables into long-term procurement plans is a needed next step toward displacing fossil resources. Today, the rules and restrictions that apply to renewables procurement (including the IOUs’ review of every purchase) do not apply to fossil procurement, especially when pre-approved as part of an LTPP. The SCE proposal would permit renewables, like fossil resources, to be a pre-approved AB 57 product, a step that is more consistent with the CPUC’s loading order, in which the first and highest supply-side resource option is to be renewables generation.
On May 23, CEERT’s testimony, which was supported in SCE’s and PG&E’s reply testimony, but opposed by the Division of Ratepayer Advocates, was admitted into the record as Exhibit 1100. On June 17, CEERT filed an opening brief in support of our position. Reply briefs are due on June 30.
While Track I modeling and testimony by the California Independent System Operator (CAISO) and IOUs was scheduled originally to be served early in June, the CAISO and IOUs asked for an extension because of changes that both claimed the models required. At a May 24PHC, the ALJ expressed skepticism about certain of these changes being required or requiring a delay, but eventually did permit a later submission date. However, this has created a more compressed schedule for testimony by other parties. Currently, that testimony is due on August 4, with hearings to start August 11. CEERT, which has long been involved in reviewing the 33% renewables integration modeling at issue here, does plan to review the final CAISO and IOUs models and testimony carefully, and is likely to serve testimony in August.
Smart Grid Rulemaking
On May 6, Assigned Commissioner Peevey issued a Proposed Decision on privacy and security rules for customer energy usage data from Smart Meters in R.08-12-009 (Smart Grid). In collaboration with our affiliates Environmental Defense Fund and EnerNOC, CEERT reviewed and discussed this PD, with a particular focus on the PD’s overreaching on CPUC jurisdiction and IOU control over customer usage data at or beyond the customer side of the meter. Resulting restrictions or interference with a customer’s response to its own energy usage data, alone or with the assistance of designated third parties, would diminish the potential for change in usage habits.
On June 2, CEERT filed comments on the Proposed Decision, seeking changes to ensure a better demarcation between utility area of control and customer access, and avoid rules that unnecessarily prevent or limit customer (or its designated third party) access to the customer’s energy usage data. The PD was scheduled to be considered at the CPUC’s Business Meeting of June 23, but has been held to its July 14 meeting. However, the Assigned ALJ (Sullivan) has contacted CEERT to discuss our positions. CEERT believes that beneficial changes are likely to be made to the PD, which will make it more consistent with limits on the Commission’s jurisdiction and the Legislature’s express directions in SB 1476 (Padilla).
Self-Generation Incentive Program (SGIP) / Distributed Generation
CEERT staff engaged in a thorough review of the CPUC Energy Division’s Revised SGIP Report in R.10-05-004 and party comments on these revisions. On May 9, CEERT filed Reply Comments on the party comments and the Report, supporting those parties that challenged the Revised Report’s reduction in incentives and inappropriate changes to eligibility. CEERT also asked that a proposed “seller concentration” cap only be adopted on an interim basis. A PD has been anticipated, but not yet issued.
CEERT attended a Rule 21 Working Group CPUC meeting on April 29. Rule 21 governs interconnections with the IOUs at the distribution and transmission levels. The discussion focused on the dynamic nature of the distribution grid (always needing to change in response to continual change in loads) and the increased volatility resulting from customer interconnections at the distribution level (more customers than in remote transmission interconnections). The IOUs are particularly concerned with a few customer connections altering the whole system or requiring a costly upgrade. The next steps include an anticipated “White Paper/Straw Proposal” from CPUC staff on the scope and priorities for Rule 21 reform.
Energy Storage Rulemaking (R.10-12-007)
Following a PHC in R.10-12-007 (Energy Storage), the Commission issued a Scoping Ruling for the proceeding on May 31. The Scoping Memo establishes issue phases for the rulemaking, the first of which is consideration of applicable policies and guidelines for energy storage. This phase starts with a workshop to be held on June 28; comments will follow, with a decision expected in the first quarter of 2012.
