By: Adam Gerza, 10/20/11

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On October 7th California Public Utilities Commission (CPUC), Administrative Law Judge (ALJ) Anne Simon issued a Proposed Decision (PD) on Portfolio Content Categories for the California RPS Program.  This is the highly anticipated ‘bucket status’ issue.

We discussed this issue in a previous blog.  As a reminder there are three portfolio content categories (or buckets) that California utilities can use to satisfy their RPS.

1. The first category is a legal minimum requiring that at least 50% of renewables come from within California, or have a first point of interconnection to a California Balancing Authority, or are dynamically transferred into the CA grid.
2. The second bucket is for renewable energy supply that is outside of California, but still supplies the California grid. These are “firmed and shaped products that provide incremental power”, of which SB 2X allows utilities to fill up to 50% of their RPS requirement.
3. The last bucket is for Tradable Renewable Energy Credits (TRECs), for which the law imposes a 25% cap that reduces to 10% by 2020.

The critical issue that we have been waiting on is how unbundled RECs produced from in-state facilities will be classified.  A number of parties, including: PG&E, SDG&E, SoCal Edison, Calpine, Sanitation Districts, Duke Energy, LADWP, Noble Solutions, Sempra, Shell, and Solar Alliance have submitted written comment arguing in favor of inclusion into ‘bucket 1’.

Leaf Exchange is also in support of classifying in-state unbundled RECs into ‘bucket 1’.  It is very apparent from the structure of SB 2 (1X) that there is a strong preference for instate facilities, evidenced by the increasing requirement for instate or instate equivalent products.  In our view, unbundled RECs produced by in-state facilities (e.g. DG, rooftop solar) clearly falls into the definition of being located in California or having a first point of interconnection with a California Balancing Authority.  Furthermore in-state DG provides the same benefits as Bucket 1 transactions: it decreases the need for long-haul transmission, it leads to improved electricity reliability in local areas, and it creates local jobs.

Unfortunately ALJ Simon disagreed, and interpreted that unbundled RECs generated in the state of California belong in ‘bucket 3’.  Starting on page 33 of the Proposed Decision (PD) ALJ Simon lays out her argument.

This is not a done deal yet.  Parties now have until October 27th to submit comment.  The Commission will then act to adopt, amend, or modify the PD.

About Leaf Exchange:
Leaf Exchange is a Renewable Energy Credit brokerage & exchange service for California solar system owners. We provide REC market education, certification services, and a venue for system owners to sell their Certificates. Leaf Exchange registers systems into WREGIS for no cost, so system owners can start banking their RECs to sell at a later date.