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Most California utilities on track to reach state's aggressive clean energy goals

Highlights

IOUs RPS procurement increased 12% last three years

SB 100 requires 100% carbon-free electricity by 2045

RPS target goal is 60% renewables by 2030

California regulated utilities are on track to reach the state's Renewable Portfolio Standard goal of procuring 60% of retail sales from renewables by 2030, although 27 are at risk for not meeting near-term goals, according to a California Public Utilities Commission report to the Legislature.

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Investor-owned utilities are forecast to have excess renewable procurement through 2027, according to the CPUC. However, small and multi-jurisdictional utilities, electric service providers and community choice aggregators collectively need to procure additional renewable resources to meet the 2021-2024 compliance period requirements, as well as future requirements.

"The aggregated percentages show that over the last three years, investor-owned utilities' RPS procurement has increased by 12%," according to a Nov. 19 CPUC statement. "This increase is primarily driven by load departure from investor-owned utility service to community choice aggregators, but partially mitigated by the investor-owned utilities selling excess renewable energy credits to community choice aggregators and electric service providers."

Small and multijurisdictional utilities' RPS procurement declined from its 2020 spike by 9%, but remains above pre-2020 levels, according to the CPUC. Community choice aggregators procurement has remained steady at 2020 levels, which dropped from 2019 primarily due to new community choice aggregators coming online with minimal to no RPS procurement and expiring short-term contracts. Electric service providers, which previously had steady RPS procurement, experienced a 10% drop from 2020 due to decreasing forecasted RPS procurement in 2021 compared to 2020.

Aggregated actual and forecast RPS percentages
Year
2018
2019
2020
2021
Investor-Owned Utilities
38%
35%
35%
47%
Small and Multi-Jurisdictional Utilities
23%
23%
46%
37%
Community Choice Aggregators
50%
55%
47%
46%
Electric Service Providers
41%
43%
37%
27%
Source: CPUC

RPS program

The RPS program is jointly implemented by the CPUC and the California Energy Commission.

The RPS program requires investor-owner utilities, small and multijurisdictional utilities, electric service providers, and community choice aggregators to get 33% of retail sales from eligible renewable sources by 2020, with most retail seller meeting or exceeding the target. The goal jumps to 60% by 2030.

"Increasing the amount of renewables in the State's energy mix provides a range of benefits to Californians, such as reducing greenhouse gas emissions and air pollution, stabilizing electricity rates, and contributing to the reliable operation of the electrical grid," according to the report.

Senate Bill 100, passed in 2018, set the target goal of 100% carbon-free electricity by 2045. California is one of 19 states that have aggressive 100% clean energy goals, 18 of which are state law.

Outlook

Retail sellers are generally well-positioned to meet RPS requirements, including the 65% long-term contracting requirement that begins in Compliance Period 2021-2024, according to the report. More than half reported already meeting 2021-2024 compliance period requirements, and risk levels have generally decreased for the remaining retail sellers who are at risk of not meeting RPS requirements.

Twenty-seven retail sellers were notified by the CPUC of being at risk for not meeting the RPS requirements in the current and/or next compliance period, according to the CPUC. These retail sellers must procure more RPS resources and sign additional long-term contracts in the near term to meet the RPS requirements.

One small and multi-jurisdictional utility and one electric service provider reported not meeting 2017-2020 compliance period requirements, with an additional 18 community choice aggregators, five electric service providers, and two small and multi-jurisdictional utilities considered at risk in the 2021-2024 compliance period.