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California Lifts Ban on Trading Renewable Energy Credits
2011-01-14 21:58:47.128 GMT
By Ehren Goossens
Jan. 14 (Bloomberg) -- California utilities can resume
trading renewable energy credits separately from the power
associated with the credits.
The California Public Utilities Commission yesterday
reversed a ban on such deals, a decision that may make it easier
for utilities to meet the country's highest renewable energy
targets.
Utilities in the state were required to be deriving a total
of 20 percent of their power from renewable sources by the end
of 2010, under the state's renewable portfolio standard, or RPS,
and 33 percent by 2020.
When utilities purchase electricity generated from wind,
solar and other renewable sources, they also receive an
accompanying renewable energy credit, or REC.
The CPUC's decision yesterday reversed a ban, imposed in
May, on buying and selling the RECs without including the power
in the deal. Utilities can now buy the so-called unbundled RECs
from renewable energy generated and used outside their service
territories.
The power must still be delivered to California to be
eligible, with some exceptions. Utilities can only use unbundled
RECs to meet 25 percent of their renewable energy obligations.
"The immediate implications are limited, as the three major
investor-owned utilities are already at or near the allowed
limit," Michel Di Capua, an analyst at Bloomberg New Energy
Finance, said today in a e-mailed statement. "In the longer
term, the implications are more meaningful, as it creates a
tradable market around California's renewable obligations, by
far the most significant in the country."
The 25 percent cap was initially imposed in March, when the
CPUC first authorized the state's three largest utilities,
Southern California Edison Co., Pacific Gas & Electric Co. and
San Diego Gas and Electric Co., to trade unbundled RECs.
Trading Moratorium
After the utilities petitioned for eliminating the cap, the
CPUC instead placed a moratorium in May on trading unbundled
RECs so regulators could study the practice. Yesterday's
decision ends that ban and reinstates the 25-percent cap through
2014.
The CPUC said the cap would give it time to evaluate the
use of RECs, and the relationship between bundled and unbundled
energy contracts.
Cindy Pollard, a spokeswoman for PG&E, the state's largest
utility, said in an e-mailed statement today that the San
Francisco-based company will "closely monitor how limits on the
procurement of out-of-state resources, when combined with
development challenges in California, affect our ability to
reach the RPS goals."
For Related News and Information:
For top news on renewable energy: TOP ENV <GO>
Most-read renewable energy news: MNI ALTNRG <GO>
For U.S. renewable energy news: TNI ALTNRG US <GO>
--Editor: Will Wade, Jessica Resnick-Ault
To contact the reporter on this story:
Ehren Goossens in New York at +1 212-617-7155 or
egoossens1@bloomberg.net.
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or
landberg@bloomberg.net.
