CPUC Begins Looking at REC Trading

The California Public Utilities Commission (CPUC) has initiated proceedings to begin examining the potential use of renewable energy credits (REC) for compliance with California’s Renewables Portfolio Standard (RPS), which requires utilities to obtain 20 percent of their power from renewable resources by 2010.

The CPUC will hold a three-day conference on REC trading from September 5 through 7, 2007. The CPUC has also solicited pre-workshop comments to aid it in developing the agenda and guiding discussion at the workshop. The CPUC recently decided to limit the comments to a single round, due on August 17.

Section 399.16 of the California Public Utilities Code, as amended by SB 107 in 2006, gave the CPUC the discretion to authorize the use of RECs to meet the RPS, subject to certain conditions. One of those conditions was the establishment of a tracking system for credits in the service territory of the Western Electricity Coordinating Council (WECC).

On June 25, 2007, the Western Renewable Energy Generation Information System (WREGIS), a renewable energy registry and tracking system for the WECC, successfully went online, meeting the requirements of section 399.16.

In the past, the CPUC has explored the use of unbundled and tradeable RECs for compliance with the RPS, but has always postponed implementation. On April 20, 2006, the CPUC’s Division of Strategic Planning issued a staff white paper entitled “Renewable Energy Certificates and the California Renewables Portfolio Standard Program” that provided an extensive analysis of the potential use of RECs to meet the RPS.

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