SDG&E Renewables Shortfall Blamed on Transmission Constraints

San Diego Gas & Electric?s failure to meet its target this year of delivering 7 percent renewable energy to its customers underscores the challenges the utility faces in reaching the 20 percent green supply mandated by the state?s renewables portfolio standard (RPS). Green resources currently provide just 4.4 percent of SDG&E?s power because several wind producers failed to deliver power they had committed to the utility for this year, said Ed Van Herik, utility spokesperson. SDG&E raised some eyebrows by claiming in its recent quarterly power content update mailed to customers that renewables account for 8 percent of the utility?s electricity supply. That figure derived from the net system power figure calculated by the California Energy Commission. The 8 percent amount represents the amount of off-grid renewable energy in California available for retail purchase, explained Greg Johnson, the CEC?s power content supervisor. SDG&E is legally complying with the requirements of the power source labeling law, enacted at the outset of deregulation to protect consumers. It requires all electricity providers to disclose the amount of their renewable supplies but gives them the option of using either the net system power figure or disclosing how much renewable energy they generate or purchase. The CEC has unsuccessfully lobbied state lawmakers to overturn the statute as a burdensome artifact because residential and small business customers can no longer choose their electricity suppliers, Johnson said. SDG&E has identified transmission upgrades as critical to meeting the 20 percent renewables goal by 2010, instead of 2017, as urged by the state energy agencies. SDG&E?s transmission constraints could be rectified if the utility were allowed to trade renewable energy credits, said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies. Senate Bill 1478 by Senator Byron Sher (D-Palo Alto)?which Governor Arnold Schwarzenegger vetoed?would have permitted limited use of renewable energy credits. ?That flexibility is especially important to SDG&E, given their transmission constraints and the amount of renewables they need to buy to come into compliance with the law,? White said. Transmission constraints interfered with SDG&E securing geothermal, biomass, and wind energy resources in Southern California located outside the utility?s service area, agreed Michael Shames, executive director of the Utility Consumers? Action Network. ?System design may be our worst enemy,? he said. However, Shames contended that SDG&E also has been ineffective in securing renewables contracts. ?Can they reach the accelerated RPS targets? Probably, but it?s going to take some work.? SDG&E has been more aggressive than Southern California Edison and Pacific Gas & Electric in soliciting renewables contracts, said Steven Kelly, Independent Energy Producers policy director. The California Public Utilities Commission has authority to permit utilities to trade renewable energy credits to meet their compliance with the renewables standard, Kelly argued. The Utility Reform Network has raised the issue of trading renewable energy credits as part of phase 2 of the CPUC?s renewables portfolio proceeding, which began this week. Hopefully, phase 2 will create greater transparency about the amount of green power for sale in California and provide an incentive for contracts that will benefit consumers, Kelly said. Renewables credits are in fact being bought and sold in California because in-state generators are selling the environmental components of their energy, according to Kelly. ?The PUC just needs to determine whether the product that?s being bought and sold meets [its] requirements,? he said.

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SDG&E Renewables Shortfall Blamed on Transmission Constraints

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