renewable energy credits

By Joshua T. Bledsoe and Kimberly D. Farbota

On September 27, 2018, the California Air Resources Board (CARB) passed Resolution 18-34, extending the Low Carbon Fuel Standard (LCFS) Program to 2030 and making significant changes to the design and implementation of the Program. This blog outlines seven takeaways for market participants and stakeholders.

1. CARB Appears Committed to the LCFS

While California’s Cap-and-Trade Program attracts the lion’s share of attention in the trade press, CARB may view the LCFS as an equally important greenhouse gas (GHG) emissions reduction measure. According to CARB, the Cap-and-Trade Program’s traditional role in the state’s overarching scheme has been to backstop GHG reductions, not drive them. Under this interpretation, the Cap-and-Trade Program has acted as an insurance policy guaranteeing the state’s GHG emissions reduction trajectory via operation of the program’s hard cap in the event that other, more direct emissions reduction measures fail to achieve expected reductions (e.g., the Renewables Portfolio Standard, Advanced Clean Car Standards, Title 24 Energy Efficiency Standards, the LCFS, etc.).

By Marc T. Campopiano, Joshua T. Bledsoe, Douglas Porter, Danny AleshireJennifer Roy and Andrew Yancey

The end of the California State Legislature’s regular session for the year culminated in a frenzy of action, with Assembly members scrambling to pass dozens of bills before midnight on September 12, 2015. The California Legislature voted on a package of 12 bills addressing environmental and health concerns, such as off-shore drilling, divestment of investment funding from coal companies, water quality, energy efficiency in disadvantaged communities, and increased public transportation. This post analyzes three of the more significant and controversial bills proposed this year, including last minute changes to each during the final week of the session: SB 350; SB 32; and AB 1288.

SB 350 (De León): The Clean Energy and Pollution Reduction Act of 2015

The most far-reaching climate change goals of the climate bill package were enshrined in SB 350. The proposed bill, authored by Senate President Pro Tempore Kevin de León and Senator Mark Leno, originally called for a 50 percent reduction in petroleum use in cars and trucks, a 50 percent increase in energy efficiency in buildings, and for 50 percent of the state’s utility power to be derived from renewable energy, all by 2030; termed the “50-50-50” formula.

These standards paralleled Governor Jerry Brown’s climate change agenda for the year, which was first announced during his inaugural address in January. Last Wednesday, following a failure to garner the necessary votes amid resistance from moderate Democrats, state legislative leaders amended SB 350 to drop requirements for a 50 percent reduction in petroleum use for cars and trucks. As modified, the bill passed on a 52-27 vote.

By Marc Campopiano and Tim Henderson

On March 11, 2013, the California Energy Commission (CEC) released a proposed Seventh Edition of the Renewables Portfolio Standard (RPS) Eligibility Guidebook (proposed Guidebook).  As we discussed in a previous blog entry, on March 28, 2012, the CEC suspended the RPS eligibility of power plants generating electricity using biomethane. 

In response to the passage of AB 2196, which created a pathway for using biomethane to generate RPS-eligible electricity, the proposed Guidebook would lift

By Marc T. Campopiano and Tim B. Henderson

On August 9, 2012, the California Energy Commission (CEC) adopted a revised Sixth Edition of the Renewables Portfolio Standard Eligibility Guidebook (RPS Guidebook) to clarify changes to the RPS Guidebook Fifth Edition, which was recently adopted on May 9, 2012, as described in our prior blog discussion.  Highlights of the changes include the following:

  • The CEC clarified additional RPS requirements for generating facilities with a first point of interconnection to the

By Marc Campopiano and Tim Henderson

On May 9, 2012, the California Energy Commission (CEC) adopted a revised Renewables Portfolio Standard (RPS) Eligibility Guidebook.  The update implements several key modifications to the RPS eligibility criteria, including but not limited to:

  •  Incorporating changes required by Senate Bill X1-2, which raised the RPS to 33 percent by 2020.  Signed by Governor Brown on April 12, 2011, Senate Bill X1-2 made other significant revisions to the RPS, including covering publicly-owned utilities

By Michael Feeley and Aron Potash

A lawsuit which delayed and once threatened to dismantle California’s greenhouse gas (GHG) cap and trade scheme was largely resolved last week, removing one roadblock to California’s plan to be the first state to impose an economy-wide GHG trading program.  Under modified regulations adopted by the California Air Resources Board (CARB) on October 20, 2011, California will require certain emitters of GHGs to obtain allowances or offsets in amounts commensurate to their respective emissions

By David B. Amerikaner, Marc T. Campopiano, Michael J. Gergen, Laura Godfrey, David A. Goldberg and Jared W. Johnson

On April 12, 2011, Governor Jerry Brown signed Senate Bill 2 to increase California’s Renewables Portfolio Standard (RPS) to 33% by 2020, among the most aggressive renewable energy goals in the United States.  Originally enacted in 2002, California’s RPS previously set a 20% by 2010 standard.  The new RPS requires regulated sellers of electricity to procure

On January 14, 2011, the California Public Utilities Commission (CPUC) issued Decision 11-01-025 lifting the stay on its earlier Decision 10-03-021 from March 2010 authorizing the use of unbundled renewable energy credits (RECs), known as Tradable Renewable Energy Credits (TRECs), as an additional compliance tool for the California Renewables Portfolio Standard Program (RPS program).

TRECs are RECs that can be traded separately from the generated energy underlying them, and do not have to be bundled in the same transaction with their underlying renewable energy.  As determined by the CPUC, procurement by California utilities of renewable resources that do not have their first point of interconnection with a California balancing authority will generally be deemed TRECs (not a bundled transaction of RECs and their underlying renewable energy).

On September 23, 2010, the California Air Resources Board (CARB) unanimously adopted the “Renewable Electricity Standard” (RES) to require most retail sellers of electricity to procure 33 percent of their electricity from eligible renewable resources by 2020. Established in Executive Order S-21-09, the RES is an independent requirement from California’s existing Renewables Portfolio Standard (RPS), which imposes a 20 percent renewable energy procurement requirement by 2010.

Both the RPS and RES apply to large and small investor-owned utilities (PG&E, SCE and SDG&E), electric service providers and community choice aggregators. However, the RES applies to a broader range of regulated entities than the RPS, most notably, publicly-owned utilities, such as LADWP and SMUD.  

According to the California Public Utilities Commission (CPUC), the “magnitude of the infrastructure that California will have to plan, permit, procure, develop and integrate in the next ten years is immense and unprecedented,” potentially requiring $115 billion in new infrastructure investment and at least seven major new transmission lines. However, a CARB Staff Report explained that the RES’s enhanced flexibility compared to the RPS — including eliminating delivery requirements for out-of-state renewable resources and allowing an unlimited use of “unbundled” or “tradable” renewable energy credits (TRECs) — is expected to reduce costs and facilitate compliance.