Today, the California Public Utility Commission (CPUC) approved a decision implementing portfolio content categories for the renewable portfolio standard (RPS) program. This decision marks progress towards continued regulatory implementation of Senate Bill 2, California’s 33% Renewable Portfolio Standard. In addition, the CPUC decision frees up the California Energy Commission (CEC) to vote on rules for the implementation of the RPS, which will mirror today’s decision.

The primary importance of this decision, however, is to codify the portfolio content categories defined in the RPS law, Senate Bill 2. Below please find the portfolio content limits imposed by the Law:

20% average 2011- 2013

• 50% must come from In-State or Dynamically Scheduled (Bucket 1)
• Up to 50% can come from Shaped and Firmed (Bucket 2)
• No more than 25% can come from RECs (Bucket 3)

25% average 2014- 2016

• 65% must come from In-State or Dynamically Scheduled (Bucket 1)
• Up to 35% can come from Shaped and Firmed (Bucket 2)
• No more than 15% can come from RECs (Bucket 3)

33% average 2017- 2020

• 75% must come from In-State or Dynamically Scheduled (Bucket 1)
• Up to 25% can come from Shaped and Firmed (Bucket 2)
• No more than 10% can come from RECs (Bucket 3)

Today’s decision implements the following incremental procurement targets for each compliance period (2011 - 2013, 2014 - 2016, 2017 - 2020) as follows:

• 2014: 21.75%
• 2015: 23.30%
• 2016: 25.00%
• 2017: 27.00%
• 2018: 29.00%
• 2019: 31.00%
• 2020: 33.00%
• 2020+: 33.00%

At the CPUC meeting, there were no material changes made to the definitions of each portfolio content category. However, the CPUC is scheduled to vote on portfolio content category definitions on December 15, 2011. Please refer to the Evolution Markets Renewable Energy Markets team for any questions pertaining to product definitions for portfolio content categories.

The decision also provided regulatory certainty regarding the eligibility and category placement of transactions that were executed prior to this decision. In short, any contracts executed prior to June 1, 2010 are not subject to the definitions and limits imposed by Senate Bill 2 and this CPUC decision. All contracts executed after June 1, 2010, however, are subject to the portfolio content limitations imposed by Senate Bill 2 and this CPUC decision.

Please contact the Evolution Markets Renewable Energy Markets team at +1 415.963.9120 or +1 914.323.0257 for further information.