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United States

Power struggles far from over -- California RPS

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California's recently approved Renewables Portfolio Standard (RPS) -- requiring the state's three largest investor-owned utilities to provide 20% of sales from renewable energy resources by 2017, coupled with a requirement to get a jump start on those purchases this year -- has renewables advocates battling with utilities to get the details right. While two of the utilities have submitted plans for meeting the mandate this year, the third, Southern California Edison (SCE), has failed to meet an order issued by the California Public Utilities Commission (CPUC) for presentation of planned purchases and signed contracts for renewable resources by January 2003.

San Diego Gas & Electric, the utility with the least amount of green power in California, has signed contracts for 326.7 MW of renewables, including 156.2 MW of new wind power projects (Windpower Monthly, December 2002). Pacific Gas & Electric also submitted a plan, although most of the energy will come from Calpine's Geysers geothermal facility, which PG&E once owned. But SCE has stalled contracts for wind resources.

The California Wind Energy Association (CalWEA) is now asking the CPUC for penalties against SCE. Ironically, SCE is the one California utility that supported the state's RPS legislation, also known as Senate Bill 1078, says CalWEA's Nancy Rader. "There seems to be two sides to Edison: the side that endorsed the legislation and the darker side," Rader says. "They could have used this interim procurement requirement to get a jump start on the SB 1078 requirements, but they didn't."

Undue barriers

CalWEA, The Utility Reform Network (TURN) and the California Energy Commission all filed protests with the utilities commission, which is largely taking their side. "This delay unfortunately lends credence to the concerns expressed by TURN and CalWEA that Edison is deliberately stalling the interim procurement process, either to test the Commission's...authority or to pre-judge the implementation efforts for the RPS program," says the CPUC. "Examples such as creation of undue barriers to participation by particular technologies, and of price benchmarks different from the Commission's $0.05.37/kWh target, are cited in support of these assertions."

CalWEA says that SCE's solicitation for renewables, along with bid protocols and contracts, are "fraught with problems," leading only a handful of companies to participate. SCE's own information shows a participation rate of only 15% among eligible bidders.

CalWEA also charges SCE with denying repowering requests. Rader says only 13 MW of repowering has occurred in California since 1999 when an amendment to the federal production tax credit -- known as the "California fix" -- placed limitations on repowering contracts. Before that repowering accounted for 244 MW in California.

One developer who did not want to be identified says the amendment was SCE's idea and that, among other provisions, it put a limit on capacity payments. In fact, he says, capacity payments at his projects would run out in June every year just when the payment becomes valuable under repowering rules.

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