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California Renewable Goals on Track; IOUs Avoid Penalties

Although it missed its long-sought 20% renewable portfolio standard (RPS) goal last year, California is on track to hit it this year if projections by the investor-owned utilities (IOU) turn out to be correct and by 2013 if other forecasts turn out to be more accurate. This was the essence of a quarterly report released last Monday by the California Public Utilities Commission (CPUC).

Collectively, the state's three major private-sector utilities received 17.9% of their supplies from RPS-eligible sources last year, and they estimate that by the end of this year they will hit 20%, growing up to 26.7% in 2013. A more conservative long-term procurement plan forecast by the CPUC staff would have the utilities not collectively pass 20% until 2013, when their collective total would reach 23.1%.

As home to one of the first and most ambitious of the now-numerous state RPS goals, California reports quarterly on the progress of the three major IOUs, while noting that there are other statewide efforts to boost the amount of renewable-based power supplies, such as the 10-year distributed solar rooftop program, a self-generation incentive program, feed-in tariffs and a renewable auction mechanism (RAM) program among others.

California's report comes at a time when national wind energy reports indicated a slowing of growth last year in added capacity while the solar industry was reporting a "banner year" in a report released last month by the Solar Energy Industries Association and GTM Research. The report said the solar sector was the "bright spot" in the U.S. economy in 2010 as the fastest growing energy sector. Solar's total market value in the United States jumped to $6 billion last year, compared with $3.6 billion in 2009, the report said.

The CPUC's latest completed RPS verifications covering through 2006 indicated that the major utilities -- Pacific Gas and Electric Co. (PG&E), Southern California Edison Co. (SCE) and San Diego Gas and Electric Co. (SDG&E) -- were all in compliance with the phased RPS goals for the period of 2004-2006. The CPUC staff has not completed its compliance assessment for the four-year period ending last year (2007-2010) as the California Energy Commission still needs to verify the claims of the three IOUs.

With its latest report that went to the governor and state legislature, the CPUC said 2,000 MW of new renewable capacity has been established so far under the RPS mandate. Under the program 300 MW of that total came online in the first quarter this year, and an added 589 MW is forecast to come online by the end of this year.

So far this year the CPUC has moved forward in several areas related to the RPS goals, the latest quarterly report indicated, including IOU filings for the upcoming renewable auction, which is anticipated in the third or fourth quarter this year. CPUC staff also held a second renewable distributed energy collaborative workshop to educate stakeholders on the latest developments in grid interconnections for small generators.

The individual end-of-2010 RPS percentages for the utilities are SCE, 19.4%; PG&E, 17.7%; and SDG&E 11.9%.

In separate action, the independent consumer advocacy part of the CPUC, the Division of Ratepayer Advocates (DRA), in March praised the five-member regulatory commission for denying a PG&E application for the $911 million Manzana wind project in Kern County. The proposed 246 MW project was deemed to be too costly, and growing concerns about he economic viability of some IOU renewable contracts may impact the ability to meet future RPS goals.

"We're encouraged that the CPUC has set guidance for any future utility-owned renewable projects in its denial of the expensive Manzana project," said DRA Acting Director Joe Como.

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