California must put more effort behind state RPS
SACRAMENTO, California, US, July 13, 2005 (Refocus Weekly)
The California Energy Commission and California Public Utilities Commission should dedicate additional staff to process the state’s Renewable Portfolio Standard, according to a consultant who was asked to evaluate the RPS.
The RPS (Senate Bill 1078) took effect in 2003 and requires retailers to
increase their sourcing of renewables to reach 20% of retail sales from green
power by 2017. The state has since directed that 20% goal to be met by 2010, and
governor Arnold Schwarzenegger has set a goal of achieving 33% from renewables
by 2020.
“Much has already been accomplished under the state's RPS,” says ‘Preliminary
Stakeholder Evaluation of the California RPS’ prepared by the KEMA-XENERGY
consulting firm. San Diego Gas & Electric has raised its share of renewables
from 1% in 2002 to 4.5% last year, while Southern California Edison increased
its share from 17% to 18.2% and Pacific Gas & Electric increased from 10.4% to
11.7% over that period.
“Despite these successes, the state has also experienced implementation
challenges,” it notes. “Most of the initial utility renewable energy purchases
were with existing and already operating renewable energy generators, and only
recently has the RPS begun to stimulate renewable capacity additions.”
The first RPS solicitations were issued by PG&E and SDG&E in July 2004, and
contract announcements did not begin until April. Regulatory delays have slowed
the process, and “important elements of the state's policy remain unresolved”
such as the application of the RPS to energy service providers and community
choice aggregators.
The consultants interviewed utilities, renewable energy developers, the
California Wind Energy Association and Independent Energy Producers Association,
as well as the Center for Energy Efficiency & Renewable Technologies and the
Union of Concerned Scientist, to provide a preliminary assessment of early
experience with the RPS. It tries to “identify lessons learned with early
implementation of California's RPS and to highlight areas of policy improvement
that stakeholders believe are necessary for the state to achieve its aggressive
commitment to renewable energy.”
“California's RPS is unique in its design and complexity, requiring a great
number of regulatory implementation decisions,” the report concludes. “It should
come as little surprise that implementation of the law has taken time.”
“Much has been accomplished in implementing the RPS, and California may now be
poised to enter a period of rapidly growing renewable energy supply,” it adds.
“Our stakeholder interviews yielded widespread agreement on one point: that the
state's policy is not optimal and that numerous challenges remain.”
There was no consensus among stakeholders on changes to the design, but there
was general agreement that “no one wanted policy changes to invite a protracted
regulatory redesign of the RPS.”
In addition to dedicating more staff, the CPUC should increase focus and
leadership on the RPS and should enhance its expertise on transmission issues
and provide clearer prioritization of critical-path items. Delivery should be
relaxed for in-state and out-of-state generators, while there should be
resolution of deliverability issues and, in the longer term, consideration of
eliminating supplemental energy payments
and market price referents.
“The existence of supplemental energy payments makes the California RPS unique,”
it notes. “More troubling and less recognized, however, is that SEPs create
regulatory responsibilities and complexities that are caused by the perverse
incentives inherent in the separation of payment between retail suppliers and
the Energy Commission.”
Elimination of MPR and SEP payments “would not relieve the state's regulatory
bodies from oversight but may significantly simplify those oversight burdens,”
it explains. “The state's retail suppliers would still be required to meet the
RPS percentage targets but, like most other RPS policies, total costs would be
recovered directly in retail rates based on contract costs.”
Click here for more info...
Visit http://www.sparksdata.co.uk/refocus/ for your international energy focus!!
|
|