CPUC Seeks Comments on Achieving 33 percent Renewable Portfolio Standard

Update: December 15, 2005
At today's PUC meeting, the Commission directed the final version of the report "Achieving a 33% Renewable Energy Target", as well as a summary of comments [see complete listing of comments] received on the report, to the Governor's Climate Action Team. The final report is materially identical to the draft report that was issued in early November, with only minor changes to correct for typos, footnote omissions, etc. Alternatively, you can download them from the CPUC website through the link http://www.cpuc.ca.gov/_spotlight/051102_renewableenergy.htm. You can also access the complete set of comments that were submitted through this page.

The California Public Utilities Commission held a workshop on November 17, 2005, to provide a summary of the "Achieving a 33 Percent Renewable Energy Target" draft report issued earlier this month. The CPUC is now seeking comments on the plan from interested parties.

Although the report is not part of a formal regulatory proceeding, the Commission is interested in getting feedback. Comments should be submitted directly to Andrew Schwartz via email (as2@cpuc.ca.gov) no later than December 1st. After receiving comments, they will be compiled into a summary report that will be included as an attachment to the final report itself.

The guidelines for the comments are as follows:

1.) Comments should be no more than 20 pages in length.

2.) They should be organized in a manner that makes it clear which section of the report is being addressed. It is recommended that draft report's table of contents is used as the organizing framework for comments.

The authors of the report offer the following general conclusions. "It is economically and technologically feasible to achieve a 33% RPS in California by 2020. Moreover, a 33% RPS is likely to result in net savings to California�s electricity customers over a twenty year period. Using the best information available at this time, a 33 percent RPS would result in a small negative ratepayer impact in the first decade (2011-2020). This is more than offset by longer term ratepayer benefits over ten years in the 2021 to 2030 timeframe. These estimates are meant to be indicative rather than absolute since, as this analysis demonstrates, there is considerable uncertainty surrounding future rate projections and RPS costs."

More

Legislation Would Require All Vehicles to Be Flexible Fueled

On November 10th, several Senators from midwestern states introduced the Fuel Security and Consumer Choice Act. The bill would require all U.S. marketed vehicles to be manufactured as Flexible Fuel Vehicles (FFVs) within ten years. FFVs can use both regular gasoline and varying blends of renewable fuels like E-85 (motor fuel with 85 percent ethanol content).

The bill would require 10 percent of vehicles sold in the U.S. to be FFVs within 18 months of passage, increasing by 10 percent for each subsequent model year. A vehicle credit trading program is also established that will allow companies that manufacture more FFVs than required to sell credits to companies that have manufactured less than required.

In addition to advancing higher percentages of renewable fuel usage, enacting this legislation could be an important development for hybrid electric vehicles (HEVs) marriage with the biofuels market.

Renewable biofuels can't meet today's overall fuel demands but they could meet the demand of a transportation system fueled primarily from electricity. By expanding the on-board battery capacity of HEVs and/or allowing HEVs to charge from the power grid would mean that overall fuel requirements would drop to a level where biofuels could supply most if not all of our transportation fuels.

More

Roseville, CA, Initiates Policy to Expand On-Site Generation in New Homes

Many future customers of the municipally-owned utility in Roseville, CA, will have super efficient homes and on-site photovoltaic systems installed on their roofs under a proposal approved recently by the Roseville City Council. The program could result in up to 4,000 new solar-powered homes built in Roseville over the next ten years. The nuts and bolts details of the utility's Blueprint for Energy Efficiency and Solar Technology or BEST Homes proposal will be developed over the next six months with program implementation on July 1, 2006.

BEST Homes is more than a solar energy program. The goal of the program is to ensure that up to 20 percent of all new homes built in Roseville utilize design criteria that "substantially reduces, if not eliminates the home's electricity bill." Efficiency and sustainable design principles will also play a role.

In a related development, Roseville will also be bringing online its own power plant in 2007 to supply about 50 percent of the electric consumption within the city. The Roseville Energy Park will have an electric generating capacity of 160MW. At the moment, Roseville's municipal electric utility must purchase all of its electricity needs from sources outside of the city. Roseville is a fast growing city with a current population of about 96,000 that is expected to increase to 133,000 by 2015.

More

Clean Renewable Energy Bonding Program - Briefing Summary

Held on November 2nd, a national call-in briefing provided information on the new Clean Renewable Energy Bond (CREB) program that was included in the recently enacted Federal energy bill. The program allows eligible nonprofit entities to issue bonds to finance renewable energy projects.

The call-in was hosted by the Environmental Law and Policy Center of the Midwest (Chicago). The briefing drew more than 200 attendees, indicating the enormous interest in the program. The CREB program allows municipally and cooperatively-owned utilities and other nonprofit entities to issue "no interest" bonds to finance renewable energy projects. Purchasers of the bonds are then eligible for federal tax credits rather than interest payments.

The program was deemed necessary because traditional renewable energy production tax incentives do not work for not-for-profit entities, as they have no federally taxable income to offset. Nonprofit revenues above cost of service are returned to customers, used to reduce rates or are reinvested in infrastructure improvements rather than paid to shareholders.

The CREB program authorizes up to $800 million in bonds to be issued over the next couple of years once the regulations are finalized. During the call, the speakers shed light on the purpose of the bonds, how the bonds are to be issued, who will purchase them and other topics. Some key points made by the various speakers on the call:

MN Cooperative Seeks Up to 120 MW of Community Based Energy Development (C-BED)

Great River Energy (GRE), a Minnesota-based generation and transmission electric cooperative, has issued a request for proposals (RFP) for a total of 120 megawatts (MW) of renewable energy resources. At least 20 MW and up to 120 MW may come from Community-Based Energy Development (C-BED) proposals if the cost of the C-BED projects are not more than 10 percent above the cost of non C-BED projects.

The term "C-BED" stems from legislation passed earlier in the year that requires the Minnesota Public Utilities to approve new tariffs for renewable energy projects meeting certain locational and ownership criteria. In general these projects will be eligible for higher payments during the initial 10 years of a 20-year power purchase agreement [for more see this previous story in Democratic Energy].

GRE's RFP outlines their commitment to support C-BED projects saying, "Of this 120 MW, 100 MW is nominally intended to be from a large project and 20 MW reserved for qualified CBED project(s). A competitive large project may be CBED as well. However, GRE will not accept any small C-BED proposals with an evaluated price greater than 110 percent of the lowest evaluated price large project."

Great River has encouraged creative pricing proposals but at a minimum, all bids must offer a flat/levelized price. Projects eligible for a C-BED type pricing structure should indicate their price in terms of net present value (NPV) while using GRE's discount rate of 5.25 percent.

Also of note in the RFP is that GRE expresses an interest in possibly taking an ownership interest in a wind energy project. Citing the recently enacted Clean Renewable Energy Bonds program in the Federal energy bill, GRE will "evaluate partial ownership as well as turnkey proposals."

Responses to the RFP are due Friday, December 9, 2005. A nonbinding Notice of Intent to Respond is due on Friday, November 11, 2005

Great River Energy announced its intent back in July 2005 to meet the non-binding requirements of the 10 percent Minnesota Renewable Energy Objective (REO) by 2015. To meet the goal will require the mostly coal-based utility to acquire about 500 MW of renewable energy resources. GRE expects to regularly issue similar RFPs in the coming years in order to meet the REO.

More