Muni Wiggle Room Possible Under Air Board 33% Renewable Rule

The Renewable Energy Standard being developed by the California Air Resources Board would largely track the state’s 20 percent Renewable Portfolio Standards law’s parameters, but some public power agencies may get temporary exemptions. “If any changes are made to the [Renewable Portfolio Standard] we’ll try to capture it in the renewable energy standards,” said Gary Collard, air specialist with the Air Board’s energy division. He spoke during a February 2 Air Board workshop outlining approaches for carrying out economic, technical, and environmental analyses under the regulations setting a 33 percent renewable rule. Collard added, however, that the board may allow munis to continue counting towards their alternative power portfolio resources not categorized as renewable under state law. These so called “uncertified resources” include large hydropower, biomass generation backed by fossil-fueled power, and renewable energy credits, which represent the green attribute of power projects that are sold separately from generating capacity. The San Francisco Public Utilities Commission is one of the proponents of this approach. It wants power from its big dam project to count as green energy under the Air Board’s upcoming 33 percent renewable standard. Under current state renewable energy law, hydropower 30 MW or larger does not qualify as green power. “Substantially all” of the commission’s power comes from the greenhouse-gas-free Hetch Hetchy hydropower complex, the commission told the Air Board January. 29. The city should not be required “to displace” this low-cost energy with more expensive solar, wind, or geothermal power, the muni said, since it won’t result in any change in greenhouse gases. Air Board staff noted that munis could count carbon light power that doesn’t qualify under state law for a limited time. Counting would terminate, for example, with an expiration of a power contract or when an agency expands the resource at issue--such as augmenting large hydropower facilities. In flux is the Air Board’s exemption threshold for small utilities. Excluding utilities that provide 500 GWh or less would leave 31 of the state’s 72 utilities in the program, representing more than 98 percent of utility load, according to Collard. If the carve out were to apply to utilities providing less than 100 GWh, 99.7 percent of the utility load would be regulated. The carve-out aims to avoid unduly burdening small utilities with high administrative costs and higher bills for their ratepayers. The agency also has not decided whether to include the Department of Water Resources and the federal Western Area Power Administration among those regulated under its rules. If they are covered, the Air Board would have to develop an alternative regulatory approach, said Collard. Also undecided, said that board’s staff, is whether to measure estimated greenhouse gas savings from replacing fossil fuel fired generation with alternative resources via a MWh or greenhouse gas metric. Another key issue unresolved is how to handle renewable energy credits and whether the rules should include a deliverability requirement. Public and private utilities were expected to meet the state’s 20 percent renewable standard in 2010, but the deadline was pushed back to 2013, which is noted in the draft 33 percent standard proposal. After that, the renewable level in the Air Board’s draft rule for utilities ratchets up over the next seven years to meet the one-third target by 2020.

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Muni Wiggle Room Possible Under Air Board 33% Renewable Rule

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