RPS Cost Containment

Background

Senate Bill (SB) 1078 (Statues of 2002, Chapter 516, Sher) established the supplemental energy payments (SEPs) program to contain the total costs of the RPS program.  Under the SEPs program, renewable generators that had eligible above-market costs could request SEPs from the California Energy Commission (CEC), which held a limited amount of funds available for eligible above-MPR costs.   

SB 1036 (Statues of 2007, Chapter 685, Perata) modified the cost containment program.  Instead of generators requesting SEPs, electrical corporations are now required to seek approval of both the contract and cost recovery of any eligible above-market contract costs from the California Public Utilities Commission (CPUC) at the same time.  The total cost limitation was not modified; that is, the total amount of eligible above-market contract costs electrical corporations may request is equivalent to the funds that would have been available under the SEPs program.   

SB 2 (1X) (Statutes of 2011, Chapter 1), by contrast, contains a broad mandate for the Commission to “establish a limitation for each electrical corporation on the procurement expenditures for all eligible renewable energy resources used to comply with the renewables portfolio standard.” More recently, SB 350 (Statutes of 2015, Chapter 547) revised Public Utilities Code Section 399.15(c) such that the cost limitation “be set at a level that prevents disproportionate rate impacts.” 

Implementation

The procurement expenditure limit implementation is ongoing.  

RPS Cost Containment Documents

Rulings: 

• January 24, 2012: Administrative Law Judge’s Ruling Requesting Comments on Procurement Expenditure Limitations for the Renewables Portfolio Standard Program 
• July 23, 2013: Administrative Law Judge’s Ruling Requesting Comments on Staff Proposal for a Methodology to Implement Procurement Expenditure Limitations for the Renewables Portfolio Standard Program  
  • Proposed Procurement Expenditure Limit model (Excel file) 
  • Data set for Procurement Expenditure Limit proposals (Excel file)  
• February 28, 2014: Administrative Law Judge’s Ruling Revising Schedule for Filing and Service of Revised Staff Proposal and Alternative Proposals for a Methodology to Implement Procurement Expenditure Limitations for the Renewables Portfolio Standard  

Comments to Rulings: 

• Comments filed in response to Rulings may be found in the R.11-05-005 proceeding 

Workshop documents: 

• Staff presentation (11/20/2013): RPS Expenditure Limitation