California PUC Loosens Deliverability Requirement for Renewables

To help the state's investor-owned utilities satisfy the law requiring them to obtain from renewable resources 20 percent of the power needed to service their retail customers, the California Public Utilities Commission ("CPUC") recently relaxed its former rule that all of that renewable power must be deliverable to the utility's own service territory if it is to be counted toward the 20 percent.  Now the requirement can be met so long as the utility has a transmission path sufficient to deliver the renewable generation to some point within the larger footprint of the California ISO.  The CPUC ruling is certain to help California's three investor-owned utilities "” San Diego Gas & Electric ("SDG&E), Southern California Edison ("SCE"), and Pacific Gas & Electric "” comply with the 20 percent portfolio requirement notwithstanding transmission constraints that limit the deliverability of certain renewable energy resources. 
The new approach to deliverability grew out of the CPUC's review of the current procurement plans through which the California utilities propose to achieve the 20 percent requirement by 2010.  For its part, FERC too recently addressed deliverability in connection with an SCE proposal to change the funding mechanism for a proposed transmission line to major wind resource.  (See FERC Denies SoCalEd Full Approval of Utility's Plan to Add Transmission, Use Wind to Reach RPS Goals, July 14, 2005).   Were Congress to eventually adopt a national portfolio standard, as some Senators have proposed, then this flexible approach to deliverability might also prove necessary beyond California since some of the most abundant renewables, wind generation in particular, but also hydro and solar, are remote from many service territories that are subject to a renewable portfolio requirement and are unable to reach those service territories due to transmission constraints. California is out front on considering many of these issues.  In another CPUC proceeding, the CPUC continues to address how transmission costs associated with individual projects should be considered in evaluation of proposals for satisfying renewable portfolio requirements.  (Res. E-3946; Res. E-3935; R.04-04-026) [UPDATE]