Regulators Move to Streamline Utilities’ Renewables

By Published On: November 20, 2014

The California Public Utilities Commission Nov. 20 approved 2014 renewable portfolio standard procurement plans under which the state’s two biggest utilities are to seek additional renewable energy. It does not extend to San Diego Gas & Electric. Commissioner Carla Peterman noted that SDG&E doesn’t need to enter into additional renewable contracts at this time to keep pace with the rising level of renewable energy required under the state mandate through 2020. Pacific Gas & Electric and Southern California Edison, however, are required to solicit more renewable power, noted Peterman. The state standard requires utilities to increase the amount of renewable energy they provide to their customers from 20 percent in 2010 to 33 percent in 2020. The complicated decision, said Peterman, is aimed at “streamlining” the renewable energy procurement process, plus making it more transparent. Peterman, who authored the decision, said it’s also aimed at better accounting for the cost of integrating renewable energy into the grid, plus aiming to reduce that cost. One area it targets, for instance, is to allow “economic curtailment” of wind and solar power production in order to reduce the cost to ratepayers. Under the new procurement plans, a utility can provide only the contracted price for surplus power generated by those utilities, but not additional payments to third-parties to take that power. “We have a situation where the price of electricity is negative, where we pay the contract cost, plus somebody else to take the electricity,” explained commissioner Mike Florio. He noted that situation has occurred particularly in the spring when renewable output can be relatively high compared to demand, resulting in surplus energy. The decision also calls for another procurement session through the commission’s renewable auction mechanism. That mechanism is aimed at getting power from small generating facilities—often consisting of solar panels on commercial buildings—under standard contracts. Peterman said the commission plans to merge the renewable auction mechanism program with the standard renewable portfolio procurement program beginning in 2015. The decision makes other procedural changes to the renewable portfolio standard procurement process, such as revising contract approval criteria. It further approves procurement plans filed by electricity service providers and small utilities in California.

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