Recent Developments:
A. Renewable Portfolio Standard Implementation (R.06-02-012 and R.06-05-027)
There continues to be considerable activity at the CPUC on the following aspects of RPS Implementation:
- Review and revisions to the market price referent (MPR) methodology to be applied in 2008
- Use of renewable energy credits (RECs) for RPS compliance
- Consideration of changes to the standard term and condition defining a REC
- Implementation of Senate Bill (SB) 1036, which directed that the former supplemental energy payment funds be returned to investor owned utilities (IOUs) and made available as “above-market/MPR funds” (AMFs) to successful project bids priced above the MPR.
In addition, there has been an effort in recent months to resolve these critical issues through resolutions (usually resulting from IOU advice letters and not formal applications) rather than decisions issued in the RPS-specific rulemakings.
On these issues, CEERT has been taking the following actions:
- CEERT filed pre-workshop comments on MPR methodology and input issues, and attended the MPR workshop on March 27. Post-workshop comments on the MPR are being filed in June. A decision will likely not be issued until August.
- CEERT attended and participated in a PG&E conference on March 6 to discuss whether changes are needed to the RPS standard term defining a REC. This conference ended with general agreement that the current REC definition was consistent with applicable law and included all environmental attributes. However, in late May, the Center for Resource Solutions (CRS) filed comments questioning that conclusion and seeking to change the definition. Comments both supporting and opposing the CRS proposal have been filed; CEERT has taken a neutral position due to conflicting views among CEERT affiliates on the value of CRS’s proposal. A decision on whether a change to the REC standard term is necessary has yet to be issued.
- In coordination with the IOUs, CEERT actively participated in successful objections to the CPUC Energy Division’s attempt to decide all issues related to SB 1036 implementation (i.e., treatment of AMFs) by a Draft Resolution (E-4160) for which there had been no party input. CEERT joined with the IOUs in asking that the matter be bifurcated, with only basic ratemaking issues (where the funds are recorded) to be decided by resolution and all other issues (i.e., legal implications) to be the subject of a workshop and comment. The CPUC modified the final Resolution E-4160 to authorize this bifurcation.
On May 9, CEERT filed pre-workshop comments on SB 1036 implementation, and actively participated in the workshop held on May 29. Other parties, including some IOUs, shared CEERT’s concerns about the “reasonableness review” pricing standard that would appropriately reflect the value of renewable power and be applied equally to competitively solicited and bilaterally negotiated contracts, and about the impact on RPS procurement of the exhaustion of AMFs. The next step is to be a post-workshop ruling, which will call out issues addressed and encourage party collaboration or even settlement on the issues raised. CEERT will continue its active participation on this issue.
- In April, the CPUC Energy Division issued another Draft Resolution (E-4170), which sought to reject a PG&E RPS contract on the grounds that it was an “unauthorized REC transaction.” CEERT worked closely and collaboratively with CEERT affiliates HorizonWind (Brenda LeMay) and Iberdrola Renewables (Anders Glader) to oppose this resolution, which, in reaching its conclusion, completely misapplied the facts and law, and ignored important CEC guidelines that determine what power “deliveries” are RPS-eligible. CEERT wrote comments in opposition to the Draft Resolution and planned and attended meetings with all of the Commissioner offices to discuss its opposition; representatives of HorizonWind and Iberdrola joined CEERT at these meetings.
This successful collaborative advocacy resulted in the rewriting of the final Resolution E-4170 to confirm that the proposed project was not an unauthorized REC transaction and did in fact meet CEC delivery guidelines. These changes to the resolution were particularly important to avoid unnecessary uncertainty being created in the rules applicable to RPS procurement in California.
- CEERT continues its advocacy for the issuance now of a long-overdue CPUC decision authorizing the use of RECs for RPS compliance. CEERT has raised the issue in all of its recent pleadings and in ongoing communications with CPUC Commissioners, IOUs, consumer advocates, and CPUC and CEC staff.
- Finally, CEERT continues to actively discuss important RPS implementation issues with other key stakeholders. These efforts have included ongoing meetings with the IOUs and consumer advocates, including a meeting at the offices of The Utility Reform Network (TURN) on May 28, with representatives of TURN, Division of Ratepayer Advocates (DRA), and SCE.
B. Long-Term Procurement Plans (R.08-02-007)
In February, the Commission commenced its rulemaking on the IOUs’ 2008 long-term procurement plans (LTPPs). This proceeding represents an important continuation of CEERT’s success in having its recommendations for scenario planning for greenhouse-gas emissions reductions (i.e., through increased renewables procurement and other direct measures) adopted in the CPUC’s Decision 07-12-052 on the IOUs’ 2006 LTPPs for application to the 2008 LTPPs.
On April 2, CEERT participated in the first prehearing conference and workshop on the 2008 LTPPs. CEERT’s advocacy sought to ensure that its adopted planning recommendations will be incorporated in the 2008 IOU LTPPs.
On June 6, Administrative Law Judge Brown issued a ruling in R.08-02-007, setting a workshop for July 10 for the express purpose of considering greenhouse gas planning “uncertainty” and specifically targeting for comment and discussion CEERT’s recommended planning scenarios. Pre-workshop comments are due on June 30; post-workshop comments are due on August 8.
On June 9, Sean Baker of the CPUC Energy Division asked to discuss with CEERT the issues raised by the June 6 ruling. A conference call between CEERT and the Energy Division is scheduled for June 17.
C. California Solar Initiative (CSI), Self-Generation Incentive Program (SGIP), and
Distributed Generation (DG) (R.08-03-008)
In March, the CPUC issued its new rulemaking continuing its efforts relative to the CSI, SGIP, and DG (R.08-03-008). CEERT continues to track these important activities and attended the first prehearing conference in R.08-03-008 held on April 22.
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