Out-of-State Wind and Solar Generation Could Be Excluded from Participating in California's Renewable Portfolio Standard

The intent to prevent California's utilities from using out-of-state wind and solar generation to meet the new 33% RPS requirement is not obvious from the provisions of the bills. The exclusion results from a change in the requirements concerning the "delivery" of generation to California. Under California's current RPS legislation, in order to qualify as an eligible renewable energy resource such that California's utilities can count that generation against their RPS requirements, out-of-state generators are required to deliver the electricity to California simultaneous with its generation.

Under current law (California Public Resources Code § 25741(a)):

[E]lectricity shall be deemed delivered if it is either generated at a location within the state, or is scheduled for consumption by California end-use retail customers.... [E]lectricity generated by an eligible renewable energy resource may be considered "delivered" regardless of whether the electricity is generated at a different time from consumption by a California end-use customer [emphasis added].

Both SB 14 and AB 64, in their current forms, would change the definition of "delivery" in California Public Resources Code § 25741(a) to require simultaneous generation:

[E]lectricity shall be deemed delivered if it is either generated at a location within the state, or generated at a location outside the state and scheduled for simultaneous consumption by California end-use retail customers [emphasis added].

The requirement that out-of-state solar and wind generators deliver electricity to California simultaneously with its generation while removing the current provision that allows generators to deliver electricity at a different time from when it was generated effectively prohibits the "firming and shaping" arrangements that are necessary for out-of-state wind and solar generators to deliver electricity to California.

Wind and solar generation are "intermittent," meaning that these facilities generate electricity only when the wind blows or the sun shines. In order to deliver this intermittent generation to California, wind and solar generators will "firm and shape" that variable generation by backing it up or supplementing it with generation from another source. If wind or solar generation must be delivered "simultaneously," it could not be firmed or shaped. Transmission costs and constraints render it all but impossible to economically deliver into California wind or solar generation that is not firmed or shaped.

In addition to restricting the eligibility of out-of-state renewables and increasing the RPS requirement, both SB 14 and AB 64 make numerous changes to California's RPS program in an attempt to make it easier to develop in-state renewable generation, including provisions designed to streamline the siting of new transmission and renewable generation. On March 31, SB 14 passed the state Senate, and it has been sent to the state Assembly. AB 64 is still under consideration in the Assembly.

For more information, contact Ashley Henry, Energy Industry Liaison, 503-294-9506, ahenry@stoel.com