Yesterday marked the last day of the California legislative session, and while lawmakers rushed passage of a number of bills to beat the deadline, a measure to codify an increase in the State’s renewable portfolio standard (RPS) failed to gain passage.
SB 722, which was sponsored by Sen. Joe Simitian, D-Palo Alto, sought to increase California’s RPS target to 33% by 2020, up from the current level of 20% by 2010. The bill would also have created three buckets of transactions to be used by utilities to reach the new target. The final version of SB 722 would allow utilities to use an in-state renewable energy product for at least 50% of their obligation. In the early years of the program, the bill would also permit the use of a firmed and shaped renewable energy product from out-of-state intermittent sources for 25% of the obligation, as well as the use of a REC-only product for the remaining 25%.
SB 722 died on the Senate floor due to time constraints, but special interest groups have already begun to lobby Governor Schwarzenegger’s office, calling for a special session to provide Senators with an additional allotment of time to vote on the bill. There is no word yet on Governor Schwarzenegger’s interest in calling a special session.
If the special session is not granted, SB 722 is effectively dead for this legislative session and would have to be reintroduced in the next session, which begins in early 2011.
Attention now turns to the California Public Utilities Commission (CPUC), which currently administers the RPS and has been considering changes to the program for more than two years. CPUC President Michael R. Peevey’s released on August 25 an amended
Proposed Decision (PD) on the use of Tradable Renewable Energy Credits (TRECs) under the RPS. The new PD would enable Investor Owned Utilities to procure 40% of their annual RPS target from TRECs. The PD would also grandfather transactions from RPS bundled, executed, and approved contracts that would be re-categorized as TRECs. The PD is open for public comment, and the CPUC cannot review the issue until 30 days after its release.
We will continue to monitor the situation and will provide you with updates as they occur. If you have any questions regarding California renewable energy markets or wish to transact in these markets, please contact our San Francisco-based Western Renewable Energy Markets Group at: +1 415 963 9120 or
recdesk@evomarkets.com.
