60% RPS Procurement Rules

The California RPS Program was established in 2002 by Senate Bill (SB) 1078 (Sher, 2002) with initial requirement that 20 percent of electricity retail sales must be served by renewable resources by 2017. The program was accelerated in 2006 under SB 107 (Simitian, 2006) which required that the 20 percent mandate be met by 2010. In April 2011, SB 2 (1X) (Simitian, 2011) increased the mandate to 33 percent RPS by 2020. In 2015, SB 350 (de León, 2015) mandated a 50 percent RPS by December 31, 2030. SB 350 also includes interim annual RPS targets with multi-year compliance periods and requires that 65 percent of RPS procurement must be derived from long-term contracts of 10 or more years. In 2018, SB 100 (de León, 2018) increased the RPS to 60 percent by 2030 and established a goal for 100 percent of the State's electricity to come from renewable and carbon-free resources by 2045.

The Role of the CPUC

The CPUC is responsible for establishing RPS requirements for retail sellers (investor-owned) utilities, community choice aggregators, and electric service providers). The CPUC determines compliance based on each retail seller's procured renewable energy credits (RECs), as verified by the California Energy Commission (CEC). Lastly, the CPUC is responsible for establishing RPS enforcement procedures and imposing non-compliance penalties for retail sellers.

60% RPS Procurement Requirement

Compliance with California's RPS program is determined by the amount of renewable energy credits (RECs) retired for compliance within multi-year compliance periods. In Decision (D.) 11-12-020, the Commission implemented the new RPS procurement quantities established in Pub. Util. Code § 399.15(b), for all retail sellers (investor-owned utilities, community choice aggregators, and electric service providers). Compliance with California’s RPS program will be determined by the amount of renewable energy credits (RECs) retired for compliance within the multi-year compliance periods. The methodology for calculating RPS procurement requirements through 2030 applies a linear trend between the compliance period targets defined in SB 100 (40% by December 31, 2024; 52% by December 31, 2027 and 60% by December 31, 2030).  In all later three-year compliance periods, retail sellers must procure at least 60% of their retail sales from RPS-eligible resources.

60% RPS Portfolio Content Categories

DEFINITION OF THREE PORTFOLIO CONTENT CATEGORIES

Renewable generation facilities may be located anywhere within the WECC region and sell energy and /or renewable energy credits (RECs) to a California retail seller of electricity to meet its RPS obligation, provided the facility meets all RPS-eligibility criteria established by the California Energy Commission (CEC). The CEC’s RPS Eligibility Guidebook is available here.

California’s RPS program defines all renewable procurement acquired from contracts executed after June 1, 2010 into three portfolio content categories, (PCC). In D.11-12-052, the CPUC implemented the new portfolio content categories established in Public Utilities Code § 399.16 (b), pursuant to SB 2 (1X) and continued in SB 350.

Refer to D.11-12-052 and D.16-12-040 for complete rules governing the classification of RPS procurement. The determination of whether RECs fall into Category 1, 2 or 3 for the purposes of compliance with RPS program will be made at the end of each compliance period.

• Category 1: Renewable energy and renewable energy credits (RECs) from the facilities with a first point of interconnection within a California Balancing Authority (CBA), or facilities that schedule electricity into a CBA on a hourly or sub-hourly basis.


• Category 2: Renewable energy and RECs with incremental electricity, and/or substitute energy, from outside a CBA. Generally, Category 2 RECs are generated from out-of-state renewable facilities and require a Substitute Energy Agreement that details the simultaneous purchase of energy and RECs from a RPS eligible facility.


• Category 3: RECs that do not include the physical delivery of the energy that generated the REC. Generally, Category 3 RECs are associated with the sale and purchase of the RECs themselves, not the energy.

PORTFOLIO BALANCE REQUIREMENTS

In addition to complying with RPS procurement requirements and PCC classifications, most retail sellers have specific requirements for the balance or mix of procurement from contracts that are executed after June 1, 2010. Specifically, these retail sellers must procure a minimum level of Category 1 RECs, which increases over the initial three multi-year compliance periods. There is a maximum limit on the amount of Category 3 procurement that may be used in each compliance period, which decreases over the same time frame. 

The figure below depicts the PCC limits and how they adjust across the compliance periods until 2020, at which point they remain at those limits for each successive compliance period.