CPUC Regulator Proposes Tighter Restrictions on Use of TRECs for RPS Compliance
Stoel Rives attorney Seth Hilton discussed in Global Power Report the proposal by California Public Utilities Commissioner Dian Grueneich to tighten restrictions on the amount of tradable renewable energy credits ("TRECs") that can be used to satisfy California's renewable energy requirements (renewable portfolio standard or "RPS"). In August, CPUC President Michael Peevey issued a proposed decision that would end the CPUC's moratorium on approval of TRECs and increase the cap on such transactions for large investor-owned utilities to 40%, later revised to 30%. Under Grueneich's proposal the cap would be restricted to 25%. Another difference is that Grueneich wants the TREC cap to continue indefinitely, while under Peevey's rule the ceiling would expire in 2013.
Hilton noted that "one of the more significant" divergences between the two proposals is that Grueneich's does not offer a grandfather clause. Peevey's rule would allow contracts approved before March 11, 2010, to still be treated as "bundled," even if the electricity delivered requires firming and shaping. That means that under Grueneich's proposal any future deliveries of electricity generated from renewable facilities outside of California, where the first point of interconnection is not a California balancing authority, must be dynamically scheduled, or else they would be subject to the TREC cap.
For more background on California TRECs, visit our Renewable + Law Blog.
"California regulator's proposal would tighten state's rules on renewable energy credits" was published by Global Power Report, October 28, 2010.