HomeMy WebLinkAboutStaff Report 2225City of Palo Alto (ID # 2225)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 12/12/2011
December 12, 2011 Page 1 of 6
(ID # 2225)
Summary T itle: Renewable Energy Procurement & Enforcement Program
Title: Adoption of Two Resolutions Adopting a Program for Enforcement of the
City ’s Renewable Portfolio Standards Program and a Renewable Energy
Resources Procurement Plan
From:City Manager
Lead Department: Utilities
Recommendation
Staff recommends that Council:
1.Adopt a resolution approving the City of Palo Alto’s Program for Enforcement of the
Renewable Portfolio Standards Program; and
2.Adopt a resolution approving the City of Palo Alto Electric Utility’s Renewable Energy
Resources Procurement Plan
Executive Summary
Palo Alto has a Council-approved renewable energy goal to provide 33% of the City’s electricity
needs by 2015. The City’s goal exceeds California’s Renewable Portfolio Standard (RPS)
mandate of 33% by 2020. Despite having adopted a more stringent goal than required by the
state mandate, the state RPS law requires the City to formally adopt an RPS procurement plan
and enforcement language that recognizes certain elements of the new RPS law. Specifically,
local publicly owned electric utilities, such as the City of Palo Alto, are required to adopt a
program for enforcement of the State’s RPS by January 1, 2012. Staff requests that Council
approve the RPS Enforcement Program (Attachment C) that describes how the City will enforce
its RPS program in compliance with state law. Staff also requests the Council approve an RPS
Procurement Plan (Attachment D) to comply with state law. The proposed RPS Enforcement
Program and RPS Procurement Plan mirror the minimum requirements of California’s RPS law
to minimize the chance of state-imposed penalties. The proposed program and plan are for
compliance with state law and do not preclude the City’s adoption of more stringent RPS goals,
such as it currently has.
Background
California’s RPS Policy History
The State of California has an RPS program that is intended to increase the amount of electricity
generated each year from eligible renewable energy resources. In 2002, Senate Bill (SB) 1078
established California's first RPS, which set a requirement for investor owned utilities (IOUs)
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(ID # 2225)
that the amount of electricity generated by eligible renewable energy resources equal at least
20 percent of their electricity retail sales per year by 2017. This objective was accelerated in
2006 under SB 107, which required IOUs to achieve the 20% target by 2010. While both of
these laws applied specifically to IOUs, they directed local publicly owned utilities (POUs)—such
as Palo Alto—to implement and enforce an RPS that “recognizes the intent of the Legislature to
encourage renewable resources.” However, the POU governing boards—such the Council of
the City of Palo Alto—were granted significant discretion to establish the resource eligibility
criteria, target levels, and timeframes for their RPS programs.
In April 2011 California’s Governor Brown signed Senate Bill 2 of the First Extraordinary Session
(SBX1-2), known as the California Renewable Energy Resources Act into law, which extended
California’s RPS mandate to 33% by 2020. In addition, this new RPS measure expanded the RPS
mandate to include all electricity retailers (or load serving entities, LSEs) in the state—including
POUs such as Palo Alto. All LSEs in California are now required to meet the new state RPS goals
that electricity provided by eligible renewable energy resources equal at least 20 percent of
retail electricity sales by 2013, at least 25% by December 31, 2016, and at least 33% by
December 31, 2020 (and continuing every year thereafter). An extract of SBX1-2, with the
section applicable to Palo Alto is included as Attachment E.
Palo Alto’s Current RPS Policy
In March 2011, Council adopted Palo Alto’s current renewable resource portfolio standard as
part of the updated Long-term Electric Acquisition Plan (LEAP). The relevant portion of the
applicable LEAP Strategy #3 (Renewable Portfolio Standard) is as follows:
Reduce the carbon intensity of the electric portfolio by acquiring renewable
energy supplies by:
A.Pursuing a target level of renewable purchases of 33% by 2015 with the
following attributes:
·The contracts for investment in renewable resources shall not exceed 30
years in term.
·Pursue only renewable resources deemed to be eligible by the California
Energy Commission (CEC).1
·Evaluate use of Renewable Energy Certificates (RECs) to meet RPS.
B.Ensuring that the retail rate impact for renewable purchases does not exceed
0.5 ¢/kWh on average.
1 Consistent with state standards, staff uses California’s definition of qualifying renewable resources, which are
defined as electricity generating resources powered by energy sources limited to wind, solar, biomass, landfill gas,
geothermal, small hydroelectric (project capacity of less than 30 MW), ocean wave, tidal and thermal energy,
digester gas, municipal solid waste and fuel cells using renewable fuels. Projects located outside of California are
considered qualifying resources, provided that they are located in the Western Electricity Coordinating Council
region (i.e., in the western U.S.) and have an initial online date no earlier than January 1, 2005.
December 12, 2011 Page 3 of 6
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The City’s internal RPS is more stringent than that required by state law in that the target is to
achieve an RPS of 33% by 2015 instead of 2020.
Discussion
One of the key differences between SBX1-2 and the two previous state RPS laws is that the new
law explicitly gives state regulators the authority to enforce the mandate on POUs. Under SB
1078 and SB 107 the CEC was responsible only for certifying renewable facilities as eligible for
the RPS and for developing a tracking and verification system to prevent the double-counting of
renewable energy output. SBX1-2 increases the CEC’s role in RPS implementation, giving it the
authority to develop enforcement regulations for POUs. In this role, if the CEC determines that
a POU has failed to comply with RPS regulations, it must refer the case to the California Air
Resources Board (CARB), which has the authority to impose penalties on the POU.
SBX1-2 still allows the governing boards of POUs to establish certain rules and provisions for
their RPS, provided that these rules satisfy the general requirements of the law. With respect
to the enforcement of the law SBX1-2 states, “[t]he governing board of the local publicly owned
electric utility shall adopt a program for the enforcement of this article on or before January 1,
2012.” Staff proposes an RPS Enforcement Program (Attachment C) containing pro forma
enforcement language that mirrors the SBX1-2 requirements to minimize any chance of CARB
imposing penalties on the City for not meeting its own, more stringent, goals.
Other differences between Palo Alto’s current RPS policy and the state law require the City to
adopt a formal RPS Procurement Plan, which is separate and in addition to the RPS
Enforcement Program. Palo Alto’s current RPS portfolio and goals already meet and exceed
the state requirements, but the Council still needs to adopt a pro forma procurement plan that
recognizes the elements required by the new California code. Although SBX1-2 does not specify
a date for adoption of the RPS Procurement Plan, staff proposes adopting this pro forma
procurement plan along with the enforcement language.
Adoption of the RPS Procurement Plan and the RPS Enforcement Program do not prevent the
City from setting more aggressive internal goals to meet the City’s sustainability and
environmental priorities. The RPS Procurement Plan and the RPS Enforcement Program are to
comply with the new state law.
The Proposed RPS Enforcement Program
The City’s RPS Enforcement Program shall have an effective date of January 1, 2012. In
implementation of this program, the City Manager or his designee, the Director of Utilities, shall
annually determine the City’s compliance with California’s RPS program. If it is determined that
the City is not in compliance with California’s RPS program, then the Council shall require the
City Manager or his designee, the Director of Utilities, to:
(a)Review and ascertain what changes are necessary to ensure compliance in the
subsequent compliance periods;
(b)Report quarterly to the Council on the progress made in regard to ensuring
compliance in subsequent compliance periods; and
December 12, 2011 Page 4 of 6
(ID # 2225)
(c)Report to the Council on the status of meeting subsequent compliance targets and
all steps taken and to be taken to ensure that compliance obligations will be timely
met.
RPS Procurement Plan
The new state law—specifically California Public Utilities Code sections 399.13, 399.15, 399.16
and 399.30—includes new compliance period procurement requirements and the creation of
new resource eligibility categories. While Palo Alto’s current RPS target consists of a single
simple goal—33% by 2015—the state law establishes three separate multi-year compliance
periods. Furthermore, the compliance requirement for the first period sets a minimum average
RPS level over the whole three-year period (20% for 2011-2013), while the requirements for the
latter two compliance periods are that the regulated entities make “reasonable progress” to
ensure that a minimum level of renewable resources is procured by the end of each period
(25% by the end of 2016 and 33% by the end of 2020).
The law also establishes three different categories or “buckets” of renewable energy
products—and sets limits on the degree to which LSEs can rely on some categories to fulfill
their RPS requirements—whereas Palo Alto’s RPS policy does not make such a distinction. The
first product (Bucket 1), the preferred one, encompasses all renewable energy that is delivered
into the California grid as it is generated. LSEs are required to meet at least 50% of their RPS
requirement with Bucket 1 resources in the first compliance period, with this threshold rising to
75% by the third compliance period. All of Palo Alto’s currently operating or contracted
resources fall into the Bucket 1 category.
The second type of renewable resource (Bucket 2) consists of renewable energy generated out-
of-state that is used or exported by the out-of-state grid as it is generated, and over some other
time period—which may or may not correspond to the generation pattern—an equal amount
of energy is delivered into the California grid, along with the renewable energy attributes of the
original renewable resource. This type of arrangement is referred to as “firming and shaping”
of the resource’s output.2 As the minimum procurement requirement on Bucket 1 renewables
increases from 50% to 75% of the overall RPS requirement, the upper limit on usage of Bucket 2
renewable resources decreases from 50% to 25% of the overall requirement.
Both Bucket 1 and Bucket 2 resources are referred to as “bundled energy and REC” (Renewable
Energy Certificate) products because the “paper” RECs (the environmental attributes associated
with the energy that was generated) are packaged with an equivalent amount of physical
energy when they are sold.
The third type of renewable resource (Bucket 3) is the state’s least preferred one, and also the
least expensive to procure. Bucket 3 encompasses all sales of RECs without any associated
2 One example of this could be a wind resource that generates four megawatts for six hours (24 megawatt-hours)
into an out-of-state grid and the seller then transmits one megawatt for 24 hours to California from whatever
sources are available, along with the RECs from the original wind resource.
December 12, 2011 Page 5 of 6
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energy. In these “unbundled REC” transactions, the renewable energy is generated and
consumed out-of-state but the RECs are sold separately to a California utility. Utilities can rely
on Bucket 3 resources to satisfy up to 25% of their RPS procurement requirements in the first
compliance period (up to 5% of sales volume), but only 10% of their RPS requirements by the
third compliance period (up to 3.3% of sales volume).
The City may also adopt rules in its RPS Procurement Plan that permit its electric utility to apply
excess procurement in one compliance period to subsequent compliance periods, and may also
adopt rules specifying conditions to allow for the delay of timely compliance and cost
limitations. The proposed RPS Procurement Plan mirrors the minimum requirements of state
law. Adoption of the plan does not preclude the City’s adoption of more aggressive RPS
procurement goals, as it has already done.
Resource Impact
Adoption of the proposed RPS Enforcement Program and RPS Procurement Plan is not expected
to have a direct impact on resources. The City’s current RPS goal exceeds the State mandates
and so it is very unlikely the City will be out of compliance with California’s RPS program and
subject to fines imposed by CARB.
Policy Implications
Adoption of an RPS Enforcement Program and an RPS Procurement Plan is required under
California Public Utilities Code section 399.30. This does not prevent the City from setting more
aggressive RPS targets, as it has already done.
Environmental Review
Adoption of the RPS Enforcement Program and the RPS Procurement Plan does not meet the
definition of a project pursuant to Public Resources Code Section 21080, subdivision (b)(8), thus
no California Environmental Quality Act review is required.
Attachments:
·Attachment A: Resolution for City's RPS Enforcement Program (PDF)
·Attachment B: Draft Resolution for RPS Procurement Plan (PDF)
·Attachment C: City of Palo Alto's RPS Enforcement Program (PDF)
·Attachment D: Palo Alto Draft RPS Procurement Compliance Plan (PDF)
·Attachment E: Extract from SBX1-2, the California Renewable Energy Resources Act (PDF)
Prepared By:Debra Lloyd, Manager
Department Head:Valerie Fong, Director
December 12, 2011 Page 6 of 6
(ID # 2225)
City Manager Approval: James Keene, City Manager
*NOT YET APPROVED*
Resolution No.
Resolution of the Council of the City of Palo Alto
Approving the City of Palo Alto Renewables Portfolio
Standards Enforcement Program
A. Since 2002, California has adopted and implemented a California Renewables
Portfolio Standard ("RPS") program, requiring initially that the amount of electricity generated
by eligible renewable energy resources equal at least 20 percent of electricity retail sales per year
by the end of2017 and requiring now that those resources equal at least 33 percent of those sales
by the end of2020.
B. In April 2011, Governor Brown signed Senate Bill XI-2, introduced by Senators
Simitian, Kehoe and Steinberg, among others. SBXI-2, which will become effective in
December 2011, is applicable to local publicly owned utilities, including the City of Palo Alto
acting by its Utilities Department. The revised RPS goals require that the amount of electricity
generated by eligible renewable energy resources equal at least 20, 25 and 33 percent of
electricity retail sales by year-end 2013,2016, and 2020, respectively.
C. On March 7, 2011, the Council adopted Resolution Number 9152, approving the
Long-term Electric Acquisition Plan's ("LEAP") Objectives, Strategies, and Implementation
Plan. LEAP set an RPS goal that requires 33 percent of retail sales be served by eligible
renewable energy resources by year-end 2015.
D. Under SBXI-2, in partiCUlar, California Public Utilities Code sections 399.13,
399.15, 399.16 and 399.30, the City must modify its RPS procurement plan to conform to state
law and provide sufficient notice to the public regarding any proposed modifications to its RPS .
procurement plan. On or before January 1, 2012, the City must adopt a program for the
enforcement of the provisions of SBXI-2 that are applicable to local publicly owned utilities,
and provide at least 30 days' advance notice to the public regarding the proposed adoption of the
City's RPS enforcement program.
NOW, THEREFORE, the Council for the City of Palo Alto does hereby RESOLVE
as follows:
SECTION 1. The Council hereby finds and declares:
1. Since 2002, the California Legislature has enacted legislation that would cause
electrical corporations and local publicly owned utilities to increase the diversity, reliability,
public health and environmental benefits of their energy mixes in order to promote stable
electricity prices, protect the public health, safety and welfare, improve environmental quality,
stimulate sustainable economic development, create new employment opportunities, and reduce
reliance on imported fuels.
2. The development of renewable energy resources may ameliorate air quality
problems throughout California, including the Bay Area and Palo Alto, and improve public
health by reducing the burning of fossil fuels and associated environmental impacts.
111031 dm 0073648 I
*NOT YET APPROVED*
3. Changes in law, reflected in SBXI-2, require the City of Palo Alto to conform to
California's Renewable Energy Resources Program by increasing the amount of electricity
generated from eligible renewable energy resources per year, so that amount equals at least 33%
of total retail sales of electricity in California by year-end 2020. Though the requirements of the
State's RPS program is made applicable to local publicly owned utilities, the Council as the local
governing body is responsible for implementation of those requirements and the enforcement is
delegated to the California Energy Commission ("CEC") and the California Air Resources
Board.
4. Public Utilities Code section 399.30 requires local publicly owned utilities to
adopt and implement a renewable energy resources procurement plan. The plan would require
the procurement of a minimum quantity of electricity products from eligible renewable energy
resources, including renewable energy credits, as a specified percentage of total kilowatthours
sold to retail customers. Procurement targets for a minimum quality of eligible renewable energy
resources for the periods, January 1, 2011 to December 31, 2013 (20%), January 1, 2012 to
December 31, 2016 (25%), and January 1, 2017 to December 31, 2020 (33%), must be
implemented. The program for enforcement shall be adopted by January 1,2012. Notice of the
Council's deliberations on the City's renewable energy resources procurement plan must be
posted in compliance with the Brown Act, and notice of the meetings must be provided to the
CEC. The City must provide annually documentation regarding the eligible renewable energy
procurement contracts. The City must report to the City's utility customers regarding public
goods fund expenditures, the resource mix, and the progress made by the City in implementing
its RPS.
5. The City must adopt the procurement requirements set forth in Public Utilities
Code section 399.16.
6. The City may adopt rules permitting CP AU to apply excess procurement in one
compliance period to subsequent compliance periods according to the requirements set forth in
Public Utilities Code section 399.13.
7. The City may adopt rules regarding conditions that allow for the delaying of
timely compliance and cost limitations according to the requirements set forth in Public Utilities
Code section 399.15.
8. The City has provided at least thirty (30) days' advance notice to the public
regarding the proposed adoption of the City's RPS enforcement program and must provide at
least 10 days' advance notice of any meeting of the Council to consider any substantive change
to the enforcement program to be adopted by the City.
SECTION 2. The Council hereby approves the Program for Enforcement of the City
of Palo Alto Renewables Portfolio Standards (the "Program") and its effective date of January 1,
2012. In implementation of the Program, the City Manager or his designee, the Director of
Utilities, shall review the City'S renewables portfolio standards procurement plan (the "Plan")
annually in order to determine the City's compliance with California's RPS program.
111 031 dm 0073648 2
*NOT YET APPROVED*
SECTION 3. If the Council determines that the City is not in compliance with
elements of its plan that are required by California's RPS program, then the Council as the local
governing body charged with enforcement of the Program shall require the City Manager or his
designee, the Director of Utilities, to:
(a) Review and ascertain what changes are· necessary to ensure compliance in the
subsequent compliance periods;
(b) Report quarterly to the Council on the progress made in regard to ensuring
compliance in subsequent compliance periods;
(c) Report to the Council on the status of meeting subsequent compliance targets and
all steps taken and to be taken to ensure that compliance obligations will be timely
met.
SECTION 4. The Council finds that the adoption of this resolution does not
constitute a project under the California Environmental Quality Act, California Public Resources
Code section 21080, subdivision (b )(8).
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Senior Asst. City Attorney City Manager
Director of Utilities
Director of Administrative Services
111031 dm 0073648 3
*NOT YET APPROVED*
111121 dm 0073672 1
Resolution No. ______
Resolution of the Council of the City of Palo Alto Approving the
City of Palo Alto Renewable Energy Resources Procurement Plan
A. Since 2002, California has adopted and implemented a California Renewables
Portfolio Standard (“RPS”) program, requiring initially that the amount of electricity
generated by eligible renewable energy resources equal at least 20 percent of electricity
retail sales per year by the end of 2017 and requiring now that 33 percent of those
resources serve at least 33 percent of those sales by the end of 2020.
B. In April 2011, Governor Brown signed Senate Bill X1-2, introduced by
Senators Simitian, Kehoe and Steinberg, among others. SBX1-2, which will become
effective in December 2011, is applicable to local publicly owned utilities, including the
City of Palo Alto acting by its Utilities Department (“CPAU”). The revised RPS goals
require that the amount of electricity generated by eligible renewable energy resources
equal at least 20, 25 and 33 percent of electricity retail sales by year-end 2013, 2016, and
2020, respectively.
C. On March 7, 2011, the Council adopted Resolution Number 9152, approving
the Long-term Electric Acquisition Plan’s (“LEAP”) Objectives, Strategies, and
Implementation Plan. LEAP set an RPS goal that requires 33 percent of electricity retail
sales be served by eligible renewable energy resources by year-end 2015.
D. Under SBX1-2, in particular, California Public Utilities Code sections 399.13,
399.15, 399.16 and 399.30, the City must modify its RPS procurement plan to conform to
state law and provide notice to the public and California Energy Commission (“CEC”)
regarding any proposed modifications to its RPS procurement plan.
NOW, THEREFORE, the Council for the City of Palo Alto does hereby
RESOLVE as follows:
SECTION 1. The Council hereby finds and declares:
1. Since 2002, the California Legislature has enacted legislation that would
cause electrical corporations and local publicly owned utilities to increase the diversity,
reliability, public health and environmental benefits of their energy mixes in order to
promote stable electricity prices, protect the public health, safety and welfare, improve
environmental quality, stimulate sustainable economic development, create new
employment opportunities, and reduce reliance on imported fuels.
2. The development of renewable energy resources may ameliorate air quality
problems throughout California, including the Bay Area and Palo Alto, and improve
public health by reducing the burning of fossil fuels and associated environmental
impacts.
*NOT YET APPROVED*
111121 dm 0073672 2
3. Changes in law, reflected in SBX1-2, require the City of Palo Alto to conform
to California’s Renewable Energy Resources Program by increasing the amount of
electricity generated from eligible renewable energy resources per year, so that amount
equals at least 33% of total retail sales of electricity in California by year-end 2020.
Though the requirements of the State’s RPS program is made applicable to local publicly
owned utilities, the Council as the local governing body is responsible for
implementation of those requirements and the enforcement is delegated to the CEC and
the California Air Resources Board.
4. Public Utilities Code section 399.30 requires local publicly owned utilities to
adopt and implement a renewable energy resources procurement plan. The plan would
require the procurement of a minimum quantity of electricity products from eligible
renewable energy resources, including renewable energy credits, as a specified
percentage of total kilowatthours sold to retail customers. Procurement targets for a
minimum quality of eligible renewable energy resources for the periods, January 1, 2011
to December 31, 2013 (20%), January 1, 2012 to December 31, 2016 (25%), and January
1, 2017 to December 31, 2020 (33%), must be implemented. Notice of the Council’s
deliberations on the City’s renewable energy resources procurement plan must be posted
in compliance with the Brown Act, and notice of the meetings must be provided to the
CEC. The City must provide annually documentation regarding the eligible renewable
energy procurement contracts. The City must report to the City’s utility customers
regarding public goods fund expenditures, the resource mix, and the progress made by
the City in implementing its RPS.
5. The City must adopt the procurement requirements set forth in Public Utilities
Code section 399.16.
6. The City may adopt rules permitting CPAU to apply excess procurement in
one compliance period to subsequent compliance periods according to the requirements
set forth in Public Utilities Code section 399.13.
7. The City may adopt rules regarding conditions that allow for the delaying of
timely compliance and cost limitations according to the requirements set forth in Public
Utilities Code section 399.15.
8. The City has provided at least ten (10) days’ advance notice to the public and
the CEC regarding the proposed adoption of the City’s RPS Procurement Plan.
SECTION 2. The Council hereby approves the City of Palo Alto Renewable
Energy Resources Procurement Plan (the “Procurement Plan”), which shall be effective
as of January 1, 2012. The City Manager or his designee, the Director of Utilities, shall
review City’s Procurement Plan annually in order to determine the City’s compliance
with California’s RPS program.
*NOT YET APPROVED*
111121 dm 0073672 3
SECTION 3. The Council finds that the adoption of this resolution does not
constitute a project under the California Environmental Quality Act, California Public
Resources Code section 21080, subdivision (b)(8), therefore, no environmental review is
required.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
___________________________ ___________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ ___________________________
Senior Asst. City Attorney City Manager
___________________________
Director of Utilities
___________________________
Director of Administrative Services
ATTACHMENT C
PALO ALTO’S RPS ENFORCEMENT PROGRAM
CITY OF PALO ALTO’s
PROGRAM FOR ENFORCEMENT OF THE RENEWABLE PORTFOLIO STANDARDS
PROGRAM
PROVISIONS:
A. On April 12, 2011, the Governor of the State of California signed California Senate Bill
2 of the First Extraordinary Session (SBX1‐2, Chapter 1, Statutes of 2011, First
Extraordinary Session), known as the California Renewable Energy Resources Act.
B. SBX1‐2 states the intent of the Legislature that the amount of electricity generated per
year from eligible renewable energy resources be increased to an amount that equals at
least 33% of total retail sales of electricity in California per year by December 31, 2020.
C. Pursuant to the provisions of Public Utilities Code section 399.30(a), in order to fulfill
unmet long‐term generation resource needs, the City must adopt and implement a
renewable energy resources procurement plan (hereinafter referred to as the “RPS
Procurement Plan”) that requires the City to procure a minimum quantity of electricity
products from eligible renewable energy resources, including renewable energy credits, as
a specified percentage of the total kilowatt‐hours sold to the City’s retail end‐use
customers each compliance period, to achieve specified procurement targets.
D. On March 7, 2011 the City Council adopted Resolution No. 9152 approving the Long‐
term Electric Acquisition Plan (LEAP) Objectives, Strategies, and Implementation Plan,
which included a target level of renewable purchases of 33% by 2015 that are deemed to
be eligible by the California Energy Commission.
E. The aforementioned LEAP does not address the specific Procurement Plan provisions
required by Public Utilities Code section 399.30.
F. The City has adopted and implemented, or will adopt and implement an RPS
Procurement Plan that recognizes compliance periods (Compliance Periods) pursuant to
Public Utilities Code section 399.30(b). Such Compliance Periods shall be January 1, 2011
to December 31, 2013, inclusive (Compliance Period 1), January 1, 2014 to December 31,
2016, inclusive (Compliance Period 2), January 1, 2017 to December 31, 2020, inclusive
(Compliance Period 3), and each calendar year after 2020.
G. The City has adopted and implemented, or will adopt and implement an RPS
Procurement Plan that recognizes specified procurement targets (Procurement Targets)
of renewable energy resources for each Compliance Period pursuant to Public Utilities
Code section 399.30(c)(1) and (2). Procurement Targets must average twenty percent
(20%) of retail sales for the period January 1, 2011 to December 31, 2013, must meet
twenty‐five percent (25%) of retail sales by December 31, 2016, must meet thirty‐three
percent (33%) of retail sales by December 31, 2020, and must meet thirty‐three percent
(33%) of retail sales for all years thereafter.
Effective 1-1-12 Page 1 of 6
PALO ALTO’S RPS ENFORCEMENT PROGRAM
H. The City has adopted and implemented, or will adopt and implement an RPS
Procurement Plan that includes provisions that address a demonstration of reasonable
progress in 2014 and 2015 to ensure the twenty five percent (25%) RPS procurement
requirement by 2016, and reasonable progress in each of 2017, 2018, and 2019 to ensure
the thirty three percent (33%) RPS procurement requirement by 2020, pursuant to Public
Utilities Code section 399.30(c)(2).
I. The City has adopted and implemented, or will adopt and implement an RPS
Procurement Plan that includes definitions for three renewable product content
categories (Content Categories) pursuant to Public Utilities Code section 399.30(c)(3) and
consistent with Public Utilities Code section 399.16.
J. The City’s RPS Procurement Plan shall include three Content Categories defined as:
“Content Category 1” consistent with Public Utilities Code section § 399.16(b)(1) (A) and
(B), “Content Category 2” consistent with Public Utilities Code section 399.16(b)(2), and
“Content Category 3” consistent with Public Utilities Code § 399.16(b)(3).
K. The City has adopted and implemented, or will adopt and implement an RPS
Procurement Plan that recognizes the minimum procurement requirements (Procurement
Requirements) of eligible renewable energy resource electricity products associated with
contracts executed after June 1, 2010 for each Compliance Period, consistent with Public
Utilities Code section 399.30(c)(3) and section 399.16.
L. The City’s RPS Procurement Plan shall recognize Content Category 1 Procurement
Requirements of not less than fifty percent (50%) of the eligible renewable energy
resource electricity for Compliance Period 1, not less than sixty‐five percent (65%) of the
eligible renewable energy resource electricity for Compliance Period 2, and not less than
seventy‐five percent (75%) of the eligible renewable energy resource electricity for
Compliance Period 3 and every year thereafter, consistent with Public Utilities Code
section 399.16(c)(1).
M. The City’s RPS Procurement Plan shall recognize Content Category 3 Procurement
Requirements of not more than twenty‐five percent (25%) of the eligible renewable
energy resource electricity for Compliance Period 1, not more than fifteen percent (15%)
of the eligible renewable energy resource electricity for Compliance Period 2, and not
more than ten percent (10%) of the eligible renewable energy resource electricity for
Compliance Period 3, consistent with Public Utilities Code section 399.16(c)(2).
N. The City’s RPS Procurement Plan shall recognize Content Category 2 resources to meet
the remaining RSP obligation for any given Compliance Period.
O. The City has adopted and implemented, or will adopt and implement an RPS
Procurement Plan that provides a definition for contract or ownership agreements
originally executed prior to June 1, 2010 (Grandfathered Resources) consistent with Public
Utilities Code section 399.16(d). Grandfathered Resources shall include any contract or
ownership agreement originally executed prior to June 1, 2010 for resources that were
RPS eligible under the rules in place when the contract was executed, and for which any
Effective 1-1-12 Page 2 of 6
PALO ALTO’S RPS ENFORCEMENT PROGRAM
subsequent contract amendments or modifications occurring after June 1, 2010 do not
increase the nameplate capacity for the facility or expected quantities of annual
generation, or substitute a different renewable energy resource; the duration of the
contract may be extended if the original contract specified a procurement commitment of
fifteen (15) or more years.
P. The City has adopted and implemented, or will adopt and implement an RPS
Procurement Plan that includes rules for application of excess procurement (Excess
Procurement) of eligible renewable energy resource electricity from one Compliance
Period to a subsequent Compliance Period consistent with Public Utilities Code section
399.30(d)(1) and in the same manner as section 399.13(a)(4)(B). Beginning January 1,
2011, Excess Procurement from one Compliance Period may be applied to a subsequent
Compliance Period; to determine the quantity of Excess Procurement for the applicable
Compliance Period, the City shall deduct from actual procurement quantities, the total
amount of procurement associated with contracts of less than ten (10) years in duration,
and shall not include any resources designated as Content Category 3.
Q. The City has adopted and implemented, or will adopt and implement an RPS
Procurement Plan that includes conditions for delaying timely compliance consistent with
Public Utilities Code section 399.30(d)(2) and section 399.15(b). The City may approve a
waiver of timely compliance (Waiver of Timely Compliance) in the event that there is
inadequate transmission capacity (§ 399.15(b)(5)(A)), permitting, interconnection, or
other factors that delay procurement, or insufficient supply (§ 399.15(b)(5)(B)),
unanticipated curtailment are mandated to address needs of the balancing authority (§
399.15(b)(5)(C)), or related factors existed.
R. The City has adopted and implemented, or will adopt and implement an RPS
Procurement Plan that establishes procedures to employ in the event of an approval of a
Waiver of Timely Compliance, which provisions require the City to establish additional
reporting for intervening years to demonstrate that reasonable actions under the City’s
control are being taken (§ 399.15(b)(6)) and to demonstrate that all reasonable actions
within the City’s control have been taken to ensure compliance in the future (§
399.15(b)(7)); in no event shall the deficit from prior compliance periods be added to
subsequent compliance periods in the event of a Waiver of Timely Compliance (§
399.15(b)(9)).
S. The City has adopted and implemented, or will adopt and implement an RPS
Procurement Plan that establishes procedures that address cost limitations for
expenditures on renewable resources (Cost Limitations for Expenditures) consistent with
Public Utilities Code section 399.30(d)(3) and section 399.15(c). Cost Limitations for
Expenditures may be applicable to procurement expenditures for all eligible renewable
energy resources used to comply with the renewables portfolio standard, and may be
based on factors that include, but are not limited to, the most recent renewable energy
procurement plan, procurement expenditures that approximate the expected cost of
building, owning, and operating eligible renewable energy resources, and the potential
that some planned resource additions may be delayed or canceled.
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PALO ALTO’S RPS ENFORCEMENT PROGRAM
T. Pursuant to the provisions of Public Utilities Code section 399.30(m), the City shall
retain discretion over the mix of eligible renewable energy resources procured by the City
and those additional generation resources procured by the City for purposes of ensuring
resource adequacy and reliability, and the reasonable costs incurred by the City for
eligible renewable energy resources owned by it.
U. Pursuant to the provisions of Public Utilities Code section 399.30(e), the City is
required to adopt a program for the enforcement of the RPS program on or before
January 1, 2012.
V. The City Council, in compliance with Public Utilities Code section 399.30(e), has
provided not less than thirty days’ notice of the proposed adoption of the RPS
Enforcement Program.
CITY OF PALO ALTO’S RPS ENFORCEMENT PROGRAM
1. The City shall have a program for the enforcement of RPS program, which shall include
all of the provisions set forth herein and shall be known as the City’s “RPS Enforcement
Program”;
2. The RPS Enforcement Program shall be effective January 1, 2012;
3. Not less than ten (10) days’ advance notice shall be given to the public before any
meeting is held to make a substantive change to the RPS Enforcement Program;
4. Annually, the City Manager or his designee, the Director of Utilities shall cause to be
reviewed, the City’s RPS Procurement Plan to determine compliance the RPS program;
5. Annual review of the RPS Procurement Plan shall include consideration of each of the
following elements:
A. By December 31, 2013 (end of Compliance Period 1):
Verify that City has met an average of twenty percent (20%) of retail sales
with eligible renewable resources from the specified Content Categories
for the period January 1, 2011 to December 31, 2013.
If targets are not met, the City must:
o Ensure than any Waiver of Timely Compliance was compliant with
the provisions in the RPS Procurement Plan,
o Review the applicability and appropriateness of excusing
performance based on the Cost Limitations on Expenditures
provisions of the RPS Procurement Plan.
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PALO ALTO’S RPS ENFORCEMENT PROGRAM
B. By December 31, 2014:
Ensure that the City is making reasonable progress toward meeting
the December 31, 2016 compliance obligation of twenty‐five percent
(25%) of retail sales with eligible renewable resources, consistent
with the RPS Procurement Plan.
C. By December 31, 2015:
Ensure that the City is making reasonable progress toward meeting
the December 31, 2016 compliance obligation of twenty‐five percent
(25%) of retail sales with eligible renewable resources, consistent
with the RPS Procurement Plan.
D. December 31, 2016 (end of Compliance Period 2):
Verify that the City has met twenty‐five percent (25%) of retail sales with
eligible renewable resources from the specified Content Categories for
the period ending December 31, 2016;
If targets are not met, the City must:
o Review the applicability of applying Excess Procurement from
Compliance Period 1 consistent with the provisions of the RPS
Procurement Plan,
o Ensure than any Waiver of Timely Compliance was compliant with
the provisions in the RPS Procurement Plan,
o Review applicability and appropriateness of excusing performance
based on the Cost Limitations on Expenditures provisions of the
RPS Procurement Plan.
E. By December 31, 2017:
Ensure that the City is making reasonable progress toward meeting the
December 31, 2020 compliance obligation of thirty‐three percent (33%)
renewable resources electricity, consistent with the RPS Procurement
Plan.
F. By December 31, 2018:
Ensure that the City is making reasonable progress toward meeting the
December 31, 2020 compliance obligation of thirty‐three percent (33%)
renewable resources electricity, consistent with the RPS Procurement
Plan.
G. By December 31, 2019:
Ensure that the City is making reasonable progress toward meeting the
December 31, 2020 compliance obligation of thirty three percent (33%)
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PALO ALTO’S RPS ENFORCEMENT PROGRAM
Effective 1-1-12 Page 6 of 6
renewable resources electricity, consistent with the RPS Procurement
Plan.
H. December 31, 2020 (end of Compliance Period 3), and annually thereafter,
Verify that that the City met thirty‐three percent (33%) of retail sales with
eligible renewable resources from the specified Content Categories,
consistent with the RPS Procurement Plan;
If targets are not met, the City must:
o Review the applicability of applying Excess Procurement from a
previous Compliance Period consistent with the provisions of
the RPS Procurement Plan,
o Ensure than any Waiver of Timely Compliance was compliant
with the provisions in the RPS Procurement Plan,
o Review applicability and appropriateness of excusing
performance based on the Cost Limitations on Expenditures
provisions of the RPS Procurement Plan.
6. If it is determined that the City has failed to comply with the provisions of its RPS
Procurement Plan, the City Council shall take steps to correct any untimely compliance,
including requiring the City Manager or his designee, the Director of Utilities to:
a. review the City’s RPS Procurement Plan to determine what changes, if
any, are necessary to ensure compliance in the next Compliance Period;
b. report quarterly to the City Council regarding the progress being made
toward meeting the compliance obligation for the next Compliance
Period;
c. report to the City Council regarding the status of meeting subsequent
compliance targets, and all steps being taken to ensure that the
obligation is timely met.
7. Effective Date: This Resolution shall be effective on January 1, 2012.
APPROVED AND ADOPTED this _________ day of __________________, 2011.
ATTACHMENT D
PALO ALTO’S RPS PROCUREMENT PLAN
CITY OF PALO ALTO ELECTRIC UTILITY’S
RENEWABLE ENERGY RESOURCES PROCUREMENT PLAN
Per SENATE BILL X1 2
INTRODUCTION:
This document presents City of Palo Alto Utilities’ (CPAU) Renewable Energy Resources
Procurement Plan, as required for compliance with Senate Bill (SB) X1 2. This legislation, which
was enacted in the 2011‐2012 First Extraordinary Session of the Legislature, modifies the state’s
renewable portfolio standard (RPS) program and sets forth new RPS requirements applicable to
publicly owned utilities. CPAU, as a publicly owned utility, is covered under the new legislation.
Pursuant to Public Utility Code § 399.30(a) each publicly owned utility must adopt and
implement a renewable energy resources procurement plan (RPS Procurement Plan). In
addition to the development of an RPS Procurement Plan, SBX1 2 requires publicly owned
utilities to adopt and implement a separate program for the enforcement of the RPS
Procurement Plan by January 1, 2012.1 City of Palo Alto’s enforcement program is not
addressed in this document, but rather, in a separate report.
CPAU’s RPS Procurement Plan, as reflected in Sections 1‐13 below consists of: (1) plan elements
that are directly mandated by the legislation; (2) measures that address each of the optional
provisions set forth in §399.30(d); and (3) RPS reporting provisions. Where appropriate, this RPS
Procurement Plan includes section citations to the legislation.
1. Purpose (§ 399.30(a))
In order to fulfill unmet long‐term generation resource needs, CPAU shall adopt and
implement this RPS Procurement Plan that requires the utility to procure a minimum
quantity of electricity products from eligible renewable energy resources, including
renewable energy credits, as a specified percentage of CPAU’s total kilowatt hours sold
to its retail end‐use customers, each compliance period, to achieve the targets specified
in SBX1 2.
2. Compliance Periods (§ 399.30(b))
A. Compliance Period 1: January 1, 2011, to December 31, 2013, inclusive.
B. Compliance Period 2: January 1, 2014, to December 31, 2016, inclusive.
C. Compliance Period 3: January 1, 2017, to December 31, 2020, inclusive.
D. Annual Compliance Periods: Annually after 2020.
1 Pursuant to § 399.30(e), POUs must adopt a “program for enforcement” of the RPS Procurement Plan on or before
January 1, 2012, at a publicly noticed meeting with not less than 30 days prior notice given to the public.
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PALO ALTO’S RPS PROCUREMENT PLAN
3. Procurement Targets of Renewable Energy Resources for Each Compliance Period (§§
399.30(c)(1) and (2))
A. During Compliance Period 1, January 1, 2011 to December 31, 201, CPAU shall
procure renewable energy resources equivalent to an average of at least twenty
percent (20%) of retail sales.
B. By the end of Compliance Period 2, December 31, 2016, CPAU shall procure
renewable energy resources equivalent to at least twenty‐five percent (25%) of
retail sales.
C. By the end of Compliance Period 3, December 31, 2020, CPAU shall procure
renewable energy resources equivalent to at least thirty‐three percent (33%) of
retail sales.
D. Commencing on December 31, 2021, and annually thereafter, CPAU shall
procure renewable energy resources equivalent to at least thirty‐three percent
(33%) of retail sales.
4. Reasonable Progress Towards Meeting Compliance Period Targets During Intervening
Years (§§ 399.30(c)(1) and (2))
A. By December 31, 2014, CPAU shall demonstrate that it is making reasonable
progress towards ensuring that it shall meet the twenty‐five percent (25%) RPS
target by 2016.
B. By December 31, 2015, CPAU shall demonstrate that it is making reasonable
progress towards ensuring that it shall meet the twenty‐five percent (25%) RPS
target by 2016.
C. By December 31, 2017, CPAU shall demonstrate that it is making reasonable
progress towards ensuring that it shall meet the thirty‐three percent (33%) RPS
target by 2020.
D. By December 31, 2018, CPAU shall demonstrate that it is making reasonable
progress towards ensuring that it shall meet the thirty‐three percent (33%) RPS
target by 2020.
E. By December 31, 2019, CPAU shall demonstrate that it is making reasonable
progress towards ensuring that it shall meet the thirty‐three percent (33%) RPS
target by 2020.
5. Procurement Requirements – Definitions for Content Categories (§399.30(c)(3))
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PALO ALTO’S RPS PROCUREMENT PLAN
CPAU’s RPS Procurement Plan shall consist of procurement Content Categories that
meet the criteria for the following eligible renewable energy resource electricity
products:
A. Content Category 1 (consistent with § 399.16(b)(1): Resources in this category
shall either:
(A) Have a first point of interconnection with a California balancing
authority, have a first point of interconnection with distribution facilities used to
serve end users within a California balancing authority area, or are scheduled
from the eligible renewable energy resource into a California balancing authority
without substituting electricity from another source. The use of another source
to provide real‐time ancillary services required to maintain an hourly or
subhourly import schedule into a California balancing authority shall be
permitted, but only the fraction of the schedule actually generated by the
eligible renewable energy resource shall count toward this portfolio content
category.
(B) Have an agreement to dynamically transfer electricity to a California
balancing authority.
B. Content Category 2 (consistent with § 399.16(b)(2)): Resources in this category
shall include firmed and shaped eligible renewable energy resource electricity
products providing incremental electricity and scheduled into a California
balancing authority.
C. Content Category 3 (consistent with § 399.16(b)(3)): Resources in this category
shall include eligible renewable energy resource electricity products, or any
fraction of the electricity generated, including unbundled renewable energy
credits, that do not qualify under the criteria of Content Category 1 or Content
Category 2.
D. Grandfathered Resources (§ 399.16(d)): Any contract or ownership agreement
originally executed prior to June 1, 2010, shall count in full towards the
procurement requirements, if all of the following conditions are met:
(1) The renewable energy resource was eligible under the rules in place
as of the date when the contract was executed.
(2) Any contract amendments or modifications occurring after June 1,
2010, do not increase the nameplate capacity or expected quantities of
annual generation, or substitute a different renewable energy resource.
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PALO ALTO’S RPS PROCUREMENT PLAN
(3) The duration of the contract may be extended if the original contract
specified a procurement commitment of fifteen (15) or more years.
(4) “Eligible renewable energy resource” means an electrical generating
facility that meets the definition of a “renewable electrical generation
facility” in Section 25741 of the Public Resources Code, subject to the
following: . . . (C) A facility approved by the governing board of a local
publicly owned electric utility prior to June 1, 2010, for procurement to
satisfy renewable energy procurement obligations adopted pursuant to
former Section 387, shall be certified as an eligible renewable energy
resource by the Energy Commission pursuant to this article, if the facility
is a “renewable electrical generation facility” as defined in Section 25741
of the Public Resources Code. (§ 399.12(e)(1)(C).
Resources procured prior to June 1, 2010 shall be counted for RPS compliance
without regard to the limitations on the use of each portfolio Content Category
as described in Section 6.
6. Procurement Requirements – Quantity for Content Categories (§ 399.30(c)(3),
§ 399.16(c)(1) and (2))
A. Compliance Period 1 Procurement Requirements: For Compliance Period 1,
CPAU shall procure not less than fifty percent (50%) of the eligible renewable
energy resource electricity products associated with contracts executed after
June 1, 2010 from Content Category 1, and not more than twenty‐five percent
(25%) from Content Category 3.
B. Compliance Period 2 Procurement Requirements: For Compliance Period 2,
CPAU shall procure not less than sixty‐five percent (65%) of the eligible
renewable energy resource electricity products associated with contracts
executed after June 1, 2010 from Content Category 1, and not more than fifteen
percent (15%) from Content Category 3.
C. Compliance Period 3 Procurement Requirements: For Compliance Period 3,
CPAU shall procure not less than seventy‐five percent (75%) of the eligible
renewable energy resource electricity products associated with contracts
executed after June 1, 2010 from Content Category 1, and not more than ten
percent (10%) from Content Category 3.
D. Annual Procurement Requirements After 2020: Beginning in calendar year 2021
and annually thereafter, CPAU shall procure not less than seventy‐five percent
(75%) of the eligible renewable energy resource electricity products associated
with contracts executed after June 1, 2010 from Content Category 1, and not
more than ten percent (10%) from Content Category 3.
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PALO ALTO’S RPS PROCUREMENT PLAN
7. Excess Procurement (§ 399.30(d)(1), §399.13(a)(4)(B))
CPAU shall be allowed to apply excess procurement (Excess Procurement) from one
compliance period to subsequent compliance periods as long as the following conditions
are met:
A. CPAU may accumulate, beginning on January 1, 2011, Excess
Procurement from one Compliance Period to be applied in any
subsequent Compliance Period.
B. In calculating the quantity of Excess Procurement, CPAU shall deduct
from actual procurement quantities, the total amount of procurement
associated with contracts of less than ten (10) years in duration.
C. Eligible resources must be from Content Category 1 or Content Category
2 or Grandfathered Resources to be Excess Procurement.
8. Waiver of Timely Compliance (§ 399.30(d)(2), § 399.15(b)(5))
A. Waiver of Timely Compliance: Enforcement of timely compliance shall be
waived if CPAU demonstrates that any of the following conditions are beyond
CPAU’s control, and will prevent timely compliance:
1. Inadequate Transmission (§ 399.15(b)(5)(A)): There is inadequate
transmission capacity to allow for sufficient electricity to be delivered
from CPAU’s proposed eligible renewable energy resource projects using
the current operational protocols of the CAISO Balancing Authority Area.
In making its findings relative to the existence of this condition, CPAU’s
deliberations shall include, but not be limited to the following:
(i) Whether CPAU has undertaken, in a timely fashion, reasonable
measures under its control and consistent with its obligations under local,
state, and federal laws and regulations, to develop and construct new
transmission lines or upgrades to existing lines intended to transmit
electricity generated by eligible renewable energy resources. In
determining the reasonableness of a CPAU’s actions, CPAU shall consider
its expectations for full‐cost recovery for these transmission lines and
upgrades, and
(ii) Whether CPAU has taken all reasonable operational measures
to maximize cost‐effective deliveries of electricity from eligible renewable
energy resources in advance of transmission availability.
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PALO ALTO’S RPS PROCUREMENT PLAN
2. Permitting, interconnection, or other factors that delayed procurement or
insufficient supply (399.15(b)(5)(B)). In making its findings relative to the
existence of this condition, Council’s deliberations shall include, but not
be limited to the following:
(i) Whether CPAU prudently managed portfolio risks, including
relying on a sufficient number of viable projects;
(ii) Whether CPAU sought to develop one of the following: its own
eligible renewable energy resources, transmission to interconnect to
eligible renewable energy resources, or energy storage used to integrate
eligible renewable energy resources.
(iii) Whether CPAU procured an appropriate minimum margin of
procurement above the minimum procurement level necessary to comply
with the renewables portfolio standard to compensate for foreseeable
delays or insufficient supply;
(iv) Whether CPAU has taken reasonable measures, under its
control to procure cost‐effective distributed generation and allowable
unbundled renewable energy credits;
(v) Whether any of CPAU’s existing and operating renewable
energy resources suffers a force majeure event that causes the complete
or partial destruction of the generator resource or significant damage to
the generator resource thus necessitating an extended forced outage.
3. Unanticipated curtailment to address needs of the balancing authority
(§ 399.15(b)(5)(C)).
B. Procedures Upon Approving Waiver: In the event of a Waiver of Timely
Compliance due to any of the factors set forth above, CPAU shall implement the
following procedures:
1. Establish additional reporting for intervening years to demonstrate that
reasonable actions under the CPAU’s control are being taken
(§399.15(b)(6)).
2. Require a demonstration that all reasonable actions within the CPAU’s
control have been taken to ensure compliance in order to grant the
waiver (§ 399.15(b)(7)).
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PALO ALTO’S RPS PROCUREMENT PLAN
C. Prior Deficits: In no event shall deficits from prior compliance periods be added
to future compliance periods (§ 399.15(b)(9)).
9. Cost Limitations for Expenditures (§ 399.30(d)(3), § 399.15(c))
A. Cost Limitations for Expenditures: City of Palo Alto, at its sole discretion, may
elect to establish cost limitations for all eligible renewable energy resources used
to comply with the renewables portfolio standard. Any such cost limitations will
be developed consistent with §399.15(c). City of Palo Alto current RPS policy
requires that CPAU pursue a target level of renewable purchases of 33% while
“[e]nsuring that the retail rate impact for renewable purchases does not exceed
0.5 ¢/kWh on average”. City of Palo Alto shall review the need for cost
limitations as part of the annual review process described in Section 12.
10. Exclusive Control (§399.30(m)): In all matters regarding compliance with the RPS
Procurement Plan, CPAU shall retain exclusive control and discretion over the following:
A. The mix of eligible renewable energy resources procured by CPAU and those
additional generation resources procured by CPAU for purposes of ensuring
resource adequacy and reliability.
B. The reasonable costs incurred by CPAU for eligible renewable energy resources
owned by it.
11. Reporting (§ 399.30(f), § 399.30(g), § 399.30(l))
A. Deliberations on Procurement Plan (§399.30(f)):
1. Public Notice: Annually, CPAU shall post notice of meetings if the Council
of the City of Palo Alto (Council) will deliberate in public regarding this
RPS Procurement Plan.
2. Notice to the California Energy Commission (CEC): Contemporaneous
with the posting of a notice for such a meeting, CPAU shall notify the CEC
of the date, time and location of the meeting in order to enable the CEC
to post the information on its Internet website.
3. Documents and Materials Related to Procurement Status and Plans:
When CPAU provides information to the Council related to its renewable
energy resources procurement status and future plans, for the Council’s
consideration at a noticed public meeting, CPAU shall make that
information available to the public and shall provide the CEC with an
electronic copy of the documents for posting on the CEC’s Internet
website.
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PALO ALTO’S RPS PROCUREMENT PLAN
B. Annual Report to CEC regarding Contract Execution (§399.30(g))
1. Annually, CPAU shall submit a report to the CEC regarding procurement
contracts executed during the prior year.
2. CPAU’s annual report to the CEC regarding contract execution shall
include all of the following:
a. A description of the eligible renewable energy resource, including
the duration of the contract or electricity purchase agreement.
b. A description and identification of the electrical generating facility
providing the eligible renewable energy resource under the
contract.
c. An estimate of the percentage increase in CPAU’s total retail sales
of electricity from eligible renewable energy resources that will
result from the contract.
C. Report to CEC and Customers (§399.30(l))
1. Annually, CPAU shall provide a report to the CEC and customers
regarding renewable resources.
2. CPAU’s annual report to the CEC regarding renewable resources shall
include all of the following:
a. Expenditures of public goods funds collected pursuant to Section
385 for eligible renewable energy resource development,
including a description of programs, expenditures, and expected
or actual results.
b. The resource mix used to serve its customers by energy source.
c. CPAU’s status in implementing the renewables portfolio standard
pursuant to § 399.30(a) and CPAU’s progress toward attaining the
standard following implementation of the RPS Procurement Plan.
12. Annual Review
CPAU’s RPS Procurement Plan shall be reviewed annually by the Council in accordance with
CPAU’s “RPS Enforcement Program.”
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PALO ALTO’S RPS PROCUREMENT PLAN
Effective 1‐1‐12 Page 9 of 9
13. Plan Modifications/Amendments
This RPS Procurement Plan may be modified or amended by an affirmative vote of the Council
during a public meeting. Any Council action to modify or amend the plan must be publicly
noticed in accordance with Section 11.
Effective Date: This plan shall be effective on January 1, 2012.
APPROVED AND ADOPTED this _________ day of __________________, 2011.
integration of intermittent renewable electrical generation into the electrical
grid, by July 1, 2011, the commission shall determine the effective load
carrying capacity of wind and solar energy resources on the California
electrical grid. The commission shall use those effective load carrying
capacity values in establishing the contribution of wind and solar energy
resources toward meeting the resource adequacy requirements established
pursuant to Section 380.
SEC. 29. Section 399.30 is added to the Public Utilities Code, to read:
399.30. (a) In order to fulfill unmet long-term generation resource needs,
each local publicly owned electric utility shall adopt and implement a
renewable energy resources procurement plan that requires the utility to
procure a minimum quantity of electricity products from eligible renewable
energy resources, including renewable energy credits, as a specified
percentage of total kilowatthours sold to the utility’s retail end-use customers,
each compliance period, to achieve the targets of subdivision (c).
(b) The governing board shall implement procurement targets for a local
publicly owned electric utility that require the utility to procure a minimum
quantity of eligible renewable energy resources for each of the following
compliance periods:
(1) January 1, 2011, to December 31, 2013, inclusive.
(2) January 1, 2014, to December 31, 2016, inclusive.
(3) January 1, 2017, to December 31, 2020, inclusive.
(c) The governing board of a local publicly owned electric utility shall
ensure all of the following:
(1) The quantities of eligible renewable energy resources to be procured
for the compliance period from January 1, 2011, to December 31, 2013,
inclusive, are equal to an average of 20 percent of retail sales.
(2) The quantities of eligible renewable energy resources to be procured
for all other compliance periods reflect reasonable progress in each of the
intervening years sufficient to ensure that the procurement of electricity
products from eligible renewable energy resources achieves 25 percent of
retail sales by December 31, 2016, and 33 percent of retail sales by December
31, 2020. The local governing board shall require the local publicly owned
utilities to procure not less than 33 percent of retail sales of electricity
products from eligible renewable energy resources in all subsequent years.
(3) A local publicly owned electric utility shall adopt procurement
requirements consistent with Section 399.16.
(d) The governing board of a local publicly owned electric utility may
adopt the following measures:
(1) Rules permitting the utility to apply excess procurement in one
compliance period to subsequent compliance periods in the same manner
as allowed for retail sellers pursuant to Section 399.13.
(2) Conditions that allow for delaying timely compliance consistent with
subdivision (b) of Section 399.15.
(3) Cost limitations for procurement expenditures consistent with
subdivision (c) of Section 399.15.
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(e) The governing board of the local publicly owned electric utility shall
adopt a program for the enforcement of this article on or before January 1,
2012. The program shall be adopted at a publicly noticed meeting offering
all interested parties an opportunity to comment. Not less than 30 days’
notice shall be given to the public of any meeting held for purposes of
adopting the program. Not less than 10 days’ notice shall be given to the
public before any meeting is held to make a substantive change to the
program.
(f) (1) Each local publicly owned electric utility shall annually post
notice, in accordance with Chapter 9 (commencing with Section 54950) of
Part 1 of Division 2 of Title 5 of the Government Code, whenever its
governing body will deliberate in public on its renewable energy resources
procurement plan.
(2) Contemporaneous with the posting of the notice of a public meeting
to consider the renewable energy resources procurement plan, the local
publicly owned electric utility shall notify the Energy Commission of the
date, time, and location of the meeting in order to enable the Energy
Commission to post the information on its Internet Web site. This
requirement is satisfied if the local publicly owned electric utility provides
the uniform resource locator (URL) that links to this information.
(3) Upon distribution to its governing body of information related to its
renewable energy resources procurement status and future plans, for its
consideration at a noticed public meeting, the local publicly owned electric
utility shall make that information available to the public and shall provide
the Energy Commission with an electronic copy of the documents for posting
on the Energy Commission’s Internet Web site. This requirement is satisfied
if the local publicly owned electric utility provides the uniform resource
locator (URL) that links to the documents or information regarding other
manners of access to the documents.
(g) A local publicly owned electric utility shall annually submit to the
Energy Commission documentation regarding eligible renewable energy
resources procurement contracts that it executed during the prior year, as
follows:
(1) A description of the eligible renewable energy resource, including
the duration of the contract or electricity purchase agreement.
(2) A description and identification of the electrical generating facility
providing the eligible renewable energy resource under the contract.
(3) An estimate of the percentage increase in the utility’s total retail sales
of electricity from eligible renewable energy resources that will result from
the contract.
(h) A public utility district that receives all of its electricity pursuant to
a preference right adopted and authorized by the United States Congress
pursuant to Section 4 of the Trinity River Division Act of August 12, 1955
(Public Law 84-386) shall be in compliance with the renewable energy
procurement requirements of this article.
(i) For a local publicly owned electric utility that was in existence on or
before January 1, 2009, that provides retail electric service to 15,000 or
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Ch. 1— 35 —
fewer customer accounts in California, and is interconnected to a balancing
authority located outside this state but within the WECC, an eligible
renewable energy resource includes a facility that is located outside
California that is connected to the WECC transmission system, if all of the
following conditions are met:
(1) The electricity generated by the facility is procured by the local
publicly owned electric utility, is delivered to the balancing authority area
in which the local publicly owned electric utility is located, and is not used
to fulfill renewable energy procurement requirements of other states.
(2) The local publicly owned electric utility participates in, and complies
with, the accounting system administered by the Energy Commission
pursuant to this article.
(3) The Energy Commission verifies that the electricity generated by the
facility is eligible to meet the renewables portfolio standard procurement
requirements.
(j) Notwithstanding subdivision (a), for a local publicly owned electric
utility that is a joint powers authority of districts established pursuant to
state law on or before January 1, 2005, that furnish electric services other
than to residential customers, and is formed pursuant to the Irrigation District
Law (Division 11 (commencing with Section 20500) of the Water Code),
the percentage of total kilowatthours sold to the district’s retail end-use
customers, upon which the renewables portfolio standard procurement
requirements in subdivision (b) are calculated, shall be based on the
authority’s average retail sales over the previous seven years. If the authority
has not furnished electric service for seven years, then the calculation shall
be based on average retail sales over the number of completed years during
which the authority has provided electric service.
(k) A local publicly owned electric utility in a city and county that only
receives greater than 67 percent of its electricity sources from hydroelectric
generation located within the state that it owns and operates, and that does
not meet the definition of a “renewable electrical generation facility”
pursuant to Section 25741 of the Public Resources Code, shall be required
to procure eligible renewable energy resources, including renewable energy
credits, to meet only the electricity demands unsatisfied by its hydroelectric
generation in any given year, in order to satisfy its renewable energy
procurement requirements.
(l) Each local publicly owned electric utility shall report, on an annual
basis, to its customers and to the Energy Commission, all of the following:
(1) Expenditures of public goods funds collected pursuant to Section 385
for eligible renewable energy resource development. Reports shall contain
a description of programs, expenditures, and expected or actual results.
(2) The resource mix used to serve its customers by energy source.
(3) The utility’s status in implementing a renewables portfolio standard
pursuant to subdivision (a) and the utility’s progress toward attaining the
standard following implementation.
(m) A local publicly owned electric utility shall retain discretion over
both of the following:
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(1) The mix of eligible renewable energy resources procured by the utility
and those additional generation resources procured by the utility for purposes
of ensuring resource adequacy and reliability.
(2) The reasonable costs incurred by the utility for eligible renewable
energy resources owned by the utility.
(n) On or before July 1, 2011, the Energy Commission shall adopt
regulations specifying procedures for enforcement of this article. The
regulations shall include a public process under which the Energy
Commission may issue a notice of violation and correction against a local
publicly owned electric utility for failure to comply with this article, and
for referral of violations to the State Air Resources Board for penalties
pursuant to subdivision (o).
(o) (1) Upon a determination by the Energy Commission that a local
publicly owned electric utility has failed to comply with this article, the
Energy Commission shall refer the failure to comply with this article to the
State Air Resources Board, which may impose penalties to enforce this
article consistent with Part 6 (commencing with Section 38580) of Division
25.5 of the Health and Safety Code. Any penalties imposed shall be
comparable to those adopted by the commission for noncompliance by retail
sellers.
(2) If Division 25.5 (commencing with Section 38500) of the Health and
Safety Code is suspended or repealed, the State Air Resources Board may
take action to enforce this article on local publicly owned electric utilities
consistent with Section 41513 of the Health and Safety Code, and impose
penalties on a local publicly owned electric utility consistent with Article
3 (commencing with Section 42400) of Chapter 4 of Part 4 of, and Chapter
1.5 (commencing with Section 43025) of Part 5 of, Division 26 of the Health
and Safety Code.
(3) For the purpose of this subdivision, this section is an emissions
reduction measure pursuant to Section 38580 of the Health and Safety Code.
(4) If the State Air Resources Board has imposed a penalty upon a local
publicly owned electric utility for the utility’s failure to comply with this
article, the State Air Resources Board shall not impose an additional penalty
for the same infraction, or the same failure to comply, with any renewables
procurement requirement imposed upon the utility pursuant to the California
Global Warming Solutions Act of 2006 (Division 25.5 (commencing with
Section 38500) of the Health and Safety Code).
(5) Any penalties collected by the State Air Resources Board pursuant
to this article shall be deposited in the Air Pollution Control Fund and, upon
appropriation by the Legislature, shall be expended for reducing emissions
of air pollution or greenhouse gases within the same geographic area as the
local publicly owned electric utility.
(p) The commission has no authority or jurisdiction to enforce any of
the requirements of this article on a local publicly owned electric utility.
SEC. 30. Section 399.31 is added to the Public Utilities Code, to read:
399.31. A retail seller may procure renewable energy credits associated
with deliveries of electricity by an eligible renewable energy resource to a
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