California Public Utilities Commission Rules on Renewable Portfolio Standard Transactions

Strategic Insights -

California's Public Utilities Commission has issued an update to the Renewables Portfolio Standard program, implementing changes to the administration and development of the program. However, the Commission also faced opposition from Small Business Utility Advocates (SBUA), an organization representing small businesses, over proposed changes to the program's pre-approval process for short-term renewable portfolio standard transactions. In their opening comments, SBUA argued that the Commission's decision ignored the history of investor-owned utilities seeking reduced upfront scrutiny and failed to provide sufficient factual support for the proposed changes.

Key Takeaways:

  • The California Public Utilities Commission has issued an update to the Renewables Portfolio Standard program, continuing implementation and administration of the program.
  • Small Business Utility Advocates (SBUA) submitted comments opposing the proposed changes to the program's pre-approval process for short-term renewable portfolio standard transactions.
  • SBUA argued that the Commission's decision ignored the history of investor-owned utilities seeking reduced upfront scrutiny and failed to provide sufficient factual support for the proposed changes.
  • SBUA notes that investor-owned utilities (IOUs) were on notice of the need for more robust proposal in the 2024 cycle, yet failed to provide factual evidence supporting their request.
  • SBUA requested that the Commission recognize the longer history of IOUs seeking reduced upfront scrutiny and acknowledge that it is appropriate to subject regulated IOUs to greater scrutiny than load-serving entities.
  • Public Utilities Code Section 451 places a statutory duty on the Commission to ensure that short-term RPS transactions are just, reasonable, and consistent with RPS policies.
  • IOUs are subject to greater Commission regulatory oversight compared with other market participants, such as load-serving entities.

Statistics:

  • Over the past 5 years, Pacific Gas & Electric did not track information regarding delayed deliveries due to Tier 1 Advice Letter protests or additional review periods.
  • Southern California Edison reported only one occurrence of a Commission-directed Tier 1 Advice Letter being protested or requiring additional review.
  • San Diego Gas & Electric was unaware of any Tier 1 advice letter approvals for solicited, non-modified transactions with counterparties being protested or requiring additional review.

Sources:

  • BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Rulemaking to Continue Implementation and Administration, and Consider Further Development of California Renewables Portfolio Standard Program. Rulemaking 24-01-017 (Filed January 25, 2024)
  • SMALL BUSINESS UTILITY ADVOCATES' OPENING COMMENTS ON THE PROPOSED DECISION DENYING REQUEST TO ADOPT A FRAMEWORK FOR PRE-APPROVAL OF INVESTOR-OWNED UTILITIES' SHORT-TERM RENEWABLE PORTFOLIO STANDARD TRANSACTIONS
  • Public Utilities Code section 451
  • California Public Utilities Commission Rules, Rule 14.3
  • California Public Utilities Commission Rules, Rule 13.1