PG&E says it will meet California’s renewable energy goals

Utility releases resource plans

Bill Opalka | May 31, 2012

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The California utility says it will comply with the state mandate for 33% renewables by 2020, but it says increased costs will start to be felt by consumers as the percentage increases.

Pacific Gas & Electric (PG&E) filed its renewable energy procurement plan for 2012 with the California Public Utilities Commission and said it will meet the requirement to source 33% of its power generation from clean sources and will also meet interim benchmarks up to that date.

California has an aggressive renewable portfolio standard (RPS) of 33% by 2020, along with the highest-in-the-nation 20% bundled RPS for power generation in the period from 2011-2013.

“In the plan, our energy forecasters project that we will achieve the requirement for an average of 20 % renewable power from 2011-2013, and 25% between 2014-2016. We also plan to continue purchasing competitively priced eligible renewable resources at a steady pace and in moderate amounts to meet our long-range needs to reach and maintain a 33% RPS requirement,” the company said. 

Compliance will come at a cost, as the company expects the RPS will increase rates by 1-2% each year through 2020. The costs of the RPS program have only begun to appear on customer bills, as projects begin to come online in significant quantities.

That’s why PG&E said its 2012 RPS Solicitation will focus on cost-effective procurement of resources.

PG&E’s 2012 RPS procurement goal is to add to its RPS portfolio approximately 1,000 GWh per year of RPS-eligible deliveries, primarily through new long-term contracts.

“These volumes would be in addition to any volumes PG&E procures through the Renewable Auction Mechanism (RAM) Program, the Feed-in Tariff (FIT) program, the Qualifying Facility (QF) program, and the Photovoltaic (PV) Program,” the plan states.
 
While the plan says that PG&E has made progress, much uncertainty exists due to potential problems related to project development, operational risks inherent in the performance of intermittent resources and forecasts for retail sales.

“While PG&E is committed to meeting California’s RPS mandate, achieving these ambitious goals presents challenges. PG&E’s ability to comply with the RPS procurement requirement targets remains contingent on a number of factors outside of PG&E’s control, including the ability of independent power producers that have executed Power Purchase Agreements (PPAs) with PG&E to overcome development and transmission challenges,” the plan continues.

The anticipated costs of integrating the various RPS resource types need to be explicitly captured in the evaluation and selection process.

Since 2002, PG&E has signed more than 110 contracts for about 10,000 MW of renewable power.

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