The California Public Utilities Commission (CPUC)released a far-reaching draft decision on the nuts and bolts of implementing SB 1078, which requires the state to adhere to a renewables-portfolio standard. The plan would adopt rules to evaluate renewable bids and set a benchmark on renewables costs and other compliance requirements.

As part of its marching orders, the CPUC was charged with ensuring that "least-cost" and "best-fit" renewable resources are selected. In line with recommendations from the California Wind Energy Association (Cal-WEA), the draft plan found that the "best-fit" renewables do not need to be a perfect fit or the most costly.

Following Cal-WEA recommendations, renewable bids would need to be evaluated based on a consistent set of assumptions. Utilities requisite filings must include an annual assessment of portfolio supply and demand to flesh out renewable needs, and bid solicitations with on-line dates and location preferences.

Both renewable and non-renewable bids would be assigned an up-front capacity value, based on commission calculations.

Utilities are required to pay up to the market referent or benchmark price of electricity for renewable bids, and public-goods charges cover the rest of costs.

Southern California Edison's idea to use unaccepted bids and broker quotes to determine the market price for electricity was rejected. Instead, the commission would use new generating plants as proxies for these determinations.

Specifically, a combined-cycle plant would be used as a proxy for the value of baseload. A combustion turbine would be used as a proxy for peaking units. The benchmark for wind and other intermittent renewables would be either the baseload or peaking benchmark. As recommended by The Utility Reform Network, payments would be based on performance.

On the matter of establishing standard contract terms and conditions, the draft decision would require utilities to seek bids for 10-, 15-, and 20-year contracts. Proposals by Edison and Pacific Gas &Electric for shorter-term contracts of one to five years were rejected because they were not seen as promoting renewables development.

The draft decision rebuffed PG & E's and Edison's attempt to get the most wiggle room out of SB 1078's call for "flexible rules of compliance." Specifically, the utilities asked for the ability to defer their renewables obligations for up to three years, with no review or penalties. PG&E and Edison also asserted that expired renewables contracts should not count toward the utility's annual procurement requirements.

The draft decision on RPS implementation is set for a vote at the commission's June 19.