Initially enacted in 2003, and accelerated by former Governor Arnold Schwarzenegger in 2006, California’s RPS requires state utilities to generate 20 percent of their electricity from renewable energy by 2010. Qualifying sources include biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, small hydroelectric, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, and tidal current.
In 2009 Schwarzenegger recognized that state utilities could not meet the 2010 deadline, and he increased the RPS to 33 percent by 2020. The 2009 mandate allows power generated out-of-state to count toward the goal. To help meet the new goal, California has adopted a feed-in tariff for renewables. Schwarzenegger’s executive order also shifts responsibility for compliance tracking from the California Public Utilities Commission and the California Energy Commission to the California Air Resources Board, to meet the state’s mandate of reducing greenhouse gas emissions to 80 percent of 1990 levels by 2050.
Utilities may buy and sell tradable renewable energy credits (TRECS). TRECS may account for only 25 percent of a utility’s annual renewable energy procurement requirement for the first two years. The price is also capped at $50 per credit. In 2013, the annual percentage limit and price cap are removed.
Utilities are charged five cents per kilowatt-hour for any shortfalls in meeting the mandate. The penalty is capped at $25 million per year.
Sources: SB 107, California’s utilities won’t be able to meet 2010 state RPS, California Energy Commission, Database for State Incentives for Renewables and Efficiency