One of the topics I've had to follow is climate change regulations. Since Congress has dropped the topic of climate policy--well, they have not dropped but it certainly has fallen lower on the ladder after the 2011 fiscal budget--states such as California have had to move ahead with their own programs. Last week, California signed into law a billed called SB1x2 (Senate Bill 2x) which extends their state renewable portfolio standard (RPS). An RPS is a states requirement to have a portion of their state's electricity come from renewable sources by a certain year. California, under Gov. Schwarzenegger, already implemented a 20% RPS by 2010. The most recent CPUC report mentions they achieved about 17-18%. SB1x2 gives the state the ability to extend this RPS in years come to achieve 33% renewable energy by 2020. On September 23, 2010, the California EPA also passed an RES (renewable energy standard) to achieve 33% by 2020. What is the difference between the RES vs RPS?
Does the difference have to deal with who has authority to regulate the rule? The PUC (public utility commission) overseas the achievement and the progress of the RPS. CA EPA (California Air Resources Board) has the authority to implement the RES (see CARB's RES website). It was a directive under Governor Schwarzenegger's Executive Order S-14-08 to establish a 33% renewable energy target by 2020. Now that it's a new Democratic administration under Governor Brown, is this Executive Order moot?
According to the PUC's June 2009 report, the RPS is a legislative action, meaning it is a different agency under the CA government that oversees the RPS. It's the CA Congress vs. ARB (CA EPA) that implements the RES. A summary explains that the RES is independent from the RPS. The "RES also applies to a broader range of regulated entities than the RPS such as the Publically Owned Utilities." In reading this summary, I would like to highlight the differences:
- Applicability- "Senate Bill 2X applies to all electricity retailers in the state – investor-owned utilities (IOUs), municipal utilities, and independent sellers. The current 20% standard applies only to investor-owned utilities and independent sellers." (Simitian website). It makes sense that the PUC would oversee the RPS if only IOUs are regulated. THis begs the question, what is the difference amount POUs, IOUs, and municipal utilities? I know IOUs are the big regulated utilities like SDGE, PG&E, and SCE. POUs are like LADWP. "The PUC would handle oversight of the state's investor-owned utilities, with the air board retaining the authority (under the state's climate change law) to loosely oversee and, if need be, punish public utilities" (E&E)
- Coverage-The RES and RPS also differ in terms of coverage. The RPS looks at the state and how much of the state shoudl come from renewables, but it also dicates the IOUs to set targes to achieve the renewable objective. The RES regulates all utilities.
- Treatment of in-state vs out-of-state electricity- "RES Allows Unlimited Unbundled/Tradable RECs. The RES allows an unlimited use of “unbundled” or “tradable” RECs (TRECs) for compliance purposes. In contrast, the CPUC has limited the use of TRECs under the RPS, at least temporarily. TRECs allow the environmental benefits associated with renewable electricity to be sold or traded separately from the underlying electricity." (Summary). The PUC limited the use of TRECs, I assume, because they wanted to ensure that a certain % of in-state generation came from renewables. I don't remember the exact % but a large portion of CA's energy comes from out-of-state cheap coal. So the RES increased the flexiblity to use TRECs to comply and unbundled RECs, which means that you can use credits to comply. A credit can equal to 1KW of renewable energy that could ahve been produced outside CA. You are using out-of-state renewable power to comply with a state requirement.
- Means to comply- "Senate Bill 2X does not require utilities to reach the goal at any cost. The PUC must approve renewable energy contracts, and utilities may be granted exemptions if the price of energy, or the difficulty of moving it into the state’s grid, make the cost excessive" (Simitian website)
- Statute vs Regulation- "Unlike the RPS, which is a codified statute, the RES remains a CARB regulation. A new Governor could order CARB to revise the RES, similar to Governor Schwarzenegger’s Executive Order S-21-09, which prompted the RES in the first instance." (Latham and Watkins summary)
- Targets- "Under the new law, all load-serving entities need to satisfy a 20% by December 31, 2013, renewable procurement target, a 25% target by year-end 2016, and a 33% target by December 31, 2020." (platts)
| Year | Renewable Electricity Standard3 | SB 1x2 |
| 2012 through 2014 | 20 percent | 20% by 12/31/2013 |
| 2015 through 2017 | 24 percent | 25% by 12/31/2016 |
| 2018 through 2019 | 28 percent | n/a |
| 2020 and annuallythereafter | 33 percent | 33% by 12/31/2020 |
Helpful websites:
RPS update
http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CA25R
LTPP http://www.cpuc.ca.gov/PUC/energy/Procurement/LTPP/ltpp_history.htm
