Renewable Portfolio Standard (California)
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| Renewable Portfolio Standard (California) | |
|---|---|
| Name | Renewable Portfolio Standard (California) |
| Other names | California RPS |
| Enacted by | California State Legislature |
| Signed by | Governor Arnold Schwarzenegger |
| Date signed | 2002 |
| Latest amendment | 2018 |
| Administered by | California Public Utilities Commission; California Energy Commission; California Air Resources Board |
| Targets | 33% by 2020; 50% by 2030; 60% / 100% policy debates |
| Scope | Investor-owned utilities; community choice aggregators; electric service providers |
| Mechanism | Renewable energy procurement; Renewable Energy Credits |
Renewable Portfolio Standard (California) The Renewable Portfolio Standard (RPS) in California is a statutory program that requires load-serving entities to procure a specified percentage of electricity from eligible renewable energy resources. Originating in 2002 and expanded through subsequent legislation and executive action, the RPS has driven deployment of large-scale and distributed renewable energy projects, stimulated investment by utility companies and independent power producers, and intersected with state climate goals administered by agencies such as the California Air Resources Board and the California Energy Commission.
Background and Legislative History
The RPS began with Assembly Bill 1078 (2002) enacted by the California State Legislature and signed into law by Governor Gray Davis, later expanded under Governor Arnold Schwarzenegger with Senate Bill 1078 (2002) and Senate Bill 107 (2006). Subsequent milestones include Senate Bill X1 2 (2011), pushed by coalition actors including Senator Fran Pavley and utilities such as Pacific Gas and Electric Company and Southern California Edison, and the major strengthening in Senate Bill 350 (2015) and Senate Bill 100 (2018), backed by legislators like Senator Kevin de León and executives from Governor Jerry Brown's administration. Policy debates involved stakeholders including The Utility Reform Network, California Independent System Operator, Los Angeles Department of Water and Power, San Diego Gas & Electric, and non-governmental organizations such as the Natural Resources Defense Council, Sierra Club, and Environmental Defense Fund.
Policy Design and Targets
California's RPS established progressive targets: initial goals culminating in 20% by 2017 and later 33% by 2020, then 50% by 2030 under Assembly Bill 327 and Senate Bill 350, with Senate Bill 100 codifying a 60% by 2030 goal in some formulations and steering toward a 100% clean energy policy. Eligible technologies are defined in statutes influenced by experts from National Renewable Energy Laboratory and developers like First Solar, SunPower Corporation, Vestas, and Siemens Gamesa. Procurement rules involve renewable energy credits tracked by entities such as the Western Renewable Energy Generation Information System and market participants including Shell Energy and Nextera Energy. The RPS differentiates between utility-scale solar, distributed generation, onshore wind, offshore wind proposals near California coast, geothermal projects in regions like The Geysers, biomass facilities in Sierra Nevada, and small hydroelectric resources. The policy also accounts for resource adequacy as managed by the California Public Utilities Commission and California Independent System Operator.
Compliance Mechanisms and Enforcement
Compliance is enforced via procurement plans reviewed by the California Public Utilities Commission and annual reports to the California Energy Commission, relying on Renewable Portfolio Standard Procurement Plans submitted by utilities including Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas & Electric. Enforcement tools include financial penalties, procurement orders, and clawbacks; past enforcement actions involved the California Public Utilities Commission imposing compliance requirements on companies like PG&E Corporation. The system uses Renewable Energy Credit trading monitored by the Western Renewable Energy Generation Information System and influenced by market actors such as ICE and North American Electric Reliability Corporation standards. Legal challenges have been brought before bodies including the California Supreme Court and federal courts with interventions by groups like The Utility Reform Network.
Impacts on Electricity Markets and Emissions
The RPS catalyzed significant capacity additions from firms such as Sunrun, Tesla Energy, EDF Renewables, and Pattern Energy, reshaping procurement by utilities like Los Angeles Department of Water and Power and Sacramento Municipal Utility District. Wholesale market dynamics in the California Independent System Operator footprint shifted with greater supply from solar photovoltaics, wind farms in Altamont Pass and Tehachapi, and geothermal in Imperial Valley, affecting prices and ancillary services markets overseen by entities like the Federal Energy Regulatory Commission. Emissions tracked by the California Air Resources Board show reductions in greenhouse gas emissions from the electricity sector, aligning with targets in Global Warming Solutions Act of 2006 (AB 32), and complementing programs like the Cap-and-Trade Program. Grid integration challenges prompted investments in energy storage from companies such as Fluence and LG Chem and demand-response programs administered by California Public Utilities Commission initiatives.
Economic and Equity Considerations
The RPS influenced investment flows involving firms like NextEra Energy Partners and Iberdrola Renewables, job creation tracked by California Employment Development Department, and local economic development in regions like the Central Valley. Workforce and equity concerns highlighted by Greenlining Institute and California Environmental Justice Alliance address distributional impacts on disadvantaged communities in areas such as Fresno County and Kern County. Energy cost effects for ratepayers prompted oversight from California Public Utilities Commission commissioners and interventions by advocacy groups like AARP and TURN. Community Choice Aggregators such as Marin Clean Energy and Clean Power Alliance leveraged the RPS to pursue locally tailored procurement, interacting with municipal utilities like Los Angeles Department of Water and Power.
Implementation Challenges and Criticisms
Critiques have focused on intermittency and integration raised by the California Independent System Operator, transmission constraints addressed by California Independent System Operator and California Public Utilities Commission joint planning, and land-use concerns voiced by Sierra Club and regional planners in San Bernardino County. Legal and regulatory disputes involved utilities including Pacific Gas and Electric Company and legislative scrutiny by committees of the California State Legislature. Additional criticisms concern resource eligibility definitions debated by academics from Stanford University, University of California, Berkeley, and UC Davis Energy Institute, and market impacts analyzed by Lawrence Berkeley National Laboratory and the National Bureau of Economic Research. Equity advocates such as Community Coalition and Greenlining Institute pressed for more inclusive siting and benefit-sharing, while industry groups like American Wind Energy Association and Solar Energy Industries Association lobbied for clearer interconnection and permitting processes.