California PUC directs SDG&E to buy more renewables despite RPS compliance

Dive Brief:

The California Public Utilities Commission (PUC) has proposed that San Diego Gas & Electric increase its renewable energy procurements to make up for a 102 MW generation shortfall, according to SNL.
The PUC said SDG&E was required to procure 164.7 MW to meet its most recent targets in the state's renewable auction mechanism (RAM), but only agreed to procure 62.7 MW.
SDG&E said that only one of the bids it received in the auction was cost competitive and that it already has enough renewable energy on its system to meet other state targets, notably the renewable portfolio standard (RPS).

Dive Insight:

California’s three large investor-owned utilities have met or are close to meeting their state renewable portfolio standard targets, but they are still concerned about having to meet other renewable energy requirements built into separate regulatory initiatives.

SDG&E’s RAM target is a good case in point.

Renewables provided the power to serve 32.2% of SDG&E’s retail load in 2014, and the utility is on track to source 43.8% of its power from renewables by 2020.

Under the state’s RPS, California utilities have to source 25% of their electricity from renewables by year end, 33% by the end of 2020, and 50% by the end of 2030.

RAM targets, however, are separate from RPS goals and are designed provide incentives for smaller solar facilities.

SDG&E said 13 bidders responded to the 2015 RAM with 35 bids, but only one of the bids made it to the top 10% in terms of the utility's analysis.

But the PUC said SDG&E has not provided adequate justification that it put forth a good faith effort to meet its overall RAM target or justified why it was consistently unable to meet its RAM auction targets. "Consequently, SDG&E is ordered to procure the remaining additional megawatts from the bids it received in its RAM VI solicitation," the commission said, according to SNL.

As part of the pending resolution, the commission proposed to approve the only project SDG&E submitted, Solar Frontier Americas’ 20 MW Midway Solar Farm III in Calipatria that is slated to begin operation in 2017.