CA RPS: Market Outlook Compliance Period 2

Karbone Market Research Briefs

January 1, 2014 saw the official kick-off of Compliance Period 2 (“CP2”, 2014-2016) in the California Renewable Portfolio Standard (RPS) market. As the market gears up for this latest program phase, some highlights (and lessons learned) from the first Compliance Period have helped set the stage.

California RPS Market Biomethane Electricity Generation Approval

Karbone Market Research Briefs

In April 2012, Karbone reported the suspension of biomethane injected into the natural gas pipeline system as an RPS resource. On September 27 2012, Governor Brown signed into law AB 1900 and AB 2196. Together, these bills fix liability concerns that previously inhibited landfill gas pipeline injection, while giving full RPS eligibility to electricity generation from pipeline injected biomethane, assuming several criteria metrics are met and CEC certification is obtained.

California RPS Market Suspension of Biomethane Eligibility

Karbone Market Research Briefs

On the back of significant bipartisan lobbying regarding the advantages and disadvantages of biomethane as an RPS resource under the new RPS Senate Bill SBX2, on March 28th 2012, the California Energy Commission held a workshop to consider the suspension of the RPS eligibility guidelines related to biomethane. The suspension would apply to power plants that are currently RPS certified or pre-certified to use biomethane and those that are not.

CPUC Approves Proposed Decision on Portfolio Content Categories

Karbone Market Research Briefs

On December 15th 2011, the CPUC unanimously approved the proposed decision implementing portfolio content categories for the renewables portfolio standard program. This much awaited decision is one of the critical components that will help shape the market for retail sellers mandated under SBX2 (1X) which became effective December 10, 2011.

California REC Market Update: Senate Bill 2

Karbone Market Research Briefs

With a new Governor in office, Senators Simitian, Kehoe and Steinberg are attempting to legislate the ARB’s executive order to extend the CA RPS, such that California utilities and retail electric sellers would need to provide 33% of electricity sales from renewable sources by 2020. The most recent attempt to undertake this (SB 722) narrowly missed getting passed in 2010. This new piece of legislation largely mirrors the previous bill’s parameters with portfolio content categories, also known as buckets, for classifying RPS renewable resources and limiting the quantities for each of the types.

California TREC Proposed Decision and Alternate Proposed Decision

Karbone Market Research Briefs

On March 11 2010, after much anticipation, the CPUC adopted decision 10-03-021 to allow for the use of tradable renewable energy certificates (TRECs) as a compliance commodity to help IOUs and ESPs meet their RPS mandated target. The decision, while enabling TRECs, limited their volumes to 25% of RPS and capped prices at $50 per TREC, until December 31, 2011.