February 11, 2010

 

The Center for Resource Solutions ("CRS") and Green-e Energy urges renewable energy market participants to submit comments on the California Energy Commission's Renewables Portfolio Standard 2006 Procurement Verification Draft Staff Report¹ ("Draft Report")," which is currently available for review and comment. The deadline for submitting hard copy comments is February 16th.

Covering many issues of assessing California regulated entities' compliance with the mandates for a 20 percent Renewables Portfolio Standard ("RPS"), the Draft Report also proposes a critical determination on an issue of great importance to the voluntary markets for renewable energy. The California Energy Commission ("CEC") staff recommends that Southern California Edison should not be allowed to claim RECs generated during the 2004-06 period from Mountain View I & II wind facilities ("Mountain View") based on contracts that the utility assumed from the Department of Water Resources ("DWR"). The DWR contracts are ineligible for RPS compliance because the procurement did not include the RECs, and it would constitute double counting of the RECs as they have already been legitimately claimed by the actual purchasers of the RECs. The contracts were entered in 2001, as part of DWR's emergency procurement of power during the California energy crisis.

The members of the California Energy Commission will soon consider this report, which will serve as a basis for compliance actions against utilities and load-serving entities, if necessary, by the California Public Utilities Commission.

CRS and other parties participated in a March 2009 workshop on this matter, presenting documentation that the contracts at issue were for energy-only purchases and that the unbundled RECs were legitimately sold separately in the voluntary marketplace, thereby prohibiting the utility from making any claim against them for RPS compliance. CRS argued that allowing Edison's claim would severely disrupt the voluntary market, impacting financial agreements for over 1 million MWh of RECs among dozens of market participants and adversely affecting more than 71,000 residential and commercial customers of municipal utilities and REC markets.

In summary, the Energy Commission's Renewables Committee determined that claims from the Mountain View facilities under the 2001 DWR contract are ineligible for RPS compliance. The report states, "RPS claims from the Mountain View facilities are technically 'unbundled' energy-only products, signifying that the energy and the RECs are not bundled together in the contract (which is currently not allowed for RPS compliance)… Allowing energy-only procurement from Mountain View would violate RPS law as the procurement is not bundled; furthermore, it would result in double‐counting. Additionally, allowing the Mountain View generation to count for RPS compliance would disrupt the voluntary REC market, create regulatory uncertainty, and leave litigation as the only likely remedy."

The full report is found at: http://www.energy.ca.gov/2009publications/CEC-300-2009-006/CEC-300-2009-006-SD.PDF Appendix A is devoted to the Mountain View issue.

The CEC is accepting written comments on the 2006 RPS Verification Report by Feb. 16, 2010. One paper copy must be sent to the Energy Commission's Docket Unit. The CEC has indicated that paper copies must be received by the 16th. Formal comments, submitted in person or by mail, should be directed to:

California Energy Commission
Re: Docket No. 02-REN-1038
and Docket No. 03-RPS-1078
Docket Unit, MS-4
1516 Ninth Street
Sacramento, CA 95814-5504

Submitting paper copies is required. You may submit comments by email in addition to submitting your paper copy. Send comments to docket@energy.state.ca.us. Please include your organization's name in the name of the file. Direct email comments to docket@energy.state.ca.us.

CRS urges interested parties to review the document and submit comments of support for the recommended determination on this matter.

Please contact Green-e staff at 415-561-2100 or info [at] green-e [dot] org if you have any questions about this issue.

^1. Barkalow, Gina, Theresa Daniels, Lorraine Gonzales. 2010. Renewables Portfolio Standard 2006 Procurement Verification Draft Staff Report. California Energy Commission. CEC-300-2009-006-SD

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