Yesterday, the California State Assembly passed SB X1-2, which increases the California renewable portfolio standard (RPS) to a 33% target by 2020. The bill has now passed both houses of the State Legislature and sits before Governor Brown awaiting his review.
The Governor may sign, veto, or take no action on the bill. If the Governor signs the bill, it would become effective 90 days from execution. Additional legislative action clarifying the further implementation of the 33% target is expected. Rulemaking from regulators (both the California Energy Commission as well as the California Public Utility Commission) is also required under SBX1-2 to complete the guidelines and standards of the program.
Under SB X1-2, the California RPS extends from the current 2010 target of 20% out to 2013. It then ramps the target up to 25% by 2016, and 33% by 2020. Details regarding other relevant structural elements of the law can be found below.
Given the complex and shifting nature of the current RPS regime (20% by 2010, Senate Bill 107), the compliance portfolios of California load serving entities have been in flux. In the event the bill is signed by the Governor, Buyers will likely have to re-evaluate their existing contracts within the context of the new regime. As such, the immediate effect on the market is uncertain.
For more information on SB x1-2 and its impact on the California green power market, or to transact in the market, please contact our San Francisco-based Renewable Energy Market team at: +1 415.963.9120.
SB X1-2 OVERVIEW
20% by Dec 31 2013
- 50% must come from In-State or Dynamically Scheduled
- No more than 25% can come from TRECs
- Up to 50% can come from Shaped and Firmed
25% by Dec 31 2016
- 65% must come from In-State or Dynamically Scheduled
- No more than 15% can come from TRECs
- Up to 35% can come from Shaped and Firmed
33% by Dec 31 2020
- 75% must come from In-State or Dynamically Scheduled
- No more than 10% can come from TRECs
- Up to 25% can come from Shaped and Firmed
- TRECs must be traded within 3 years of the year in which they were generated
- TRECs once retired, can be applied to compliance requirements for any Year.
- Any CEC Certified WECC RECs generated on or after January 1st, 2008 are eligible (subject to limitations above re; tradability)
- Investor Owned Utilities, Publicly Owned Utilities, Electricity Service Providers