From the Renewable Energy Desk
9.1.10
Upheaval in CA Legislature leads to the demise of SB 722
Last day of the California legislative session brings no new clarity to state RPS directives.
 
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.
Evolution Markets Inc. and its suppliers believe the information or data contained herein was obtained from reliable sources. Nevertheless, Evolution Markets Inc. does not guarantee the accuracy and/or the completeness of the information or data included herein, to you or to any other person or entity, and Evolution Markets Inc. shall have no liability for any errors or omissions with respect to such information or data. Evolution Markets Inc. makes no express or implied warranties to you, or to any other person or entity, and expressly disclaims all warranties or merchantability or fitness for a particular purpose or use, with respect to the information or data included herein. Without limiting any of the foregoing, in no event shall Evolution Markets Inc. have any liability for any special, punitive, indirect, or consequential damages (including lost profits), even if notified of the possibility of such damages. Prices and or bids/offers reflect (i) data from completed transactions, (ii) data from pending transactions, (iii) firm bids to buy and/or firm offers to sell, (iv) prices purchasers have expressed a willingness to pay, but for which we have not received, or are not aware of, a firm bid to buy or prices sellers have expressed a willingness to accept, but for which we have not received, or are not aware of, a firm offer to sell and/or (v) our judgment of the price(s) at which transactions could be concluded based on any combination of the above information. © Copyright 1999-2011, Evolution Markets Inc.