The California PUC has on its agenda for next week a decision to allow the use of trade-able renewable energy credits (TRECs) to comply with its renewable portfolio standard (RT, Aug-27).  The case has dragged on for years and included the PUC pulling an order this spring after intense industry lobbying.  It drew another round of comments this week.

          The use of TRECs is important to retailers since they often lack the balance sheet that utilities have to enter into long-term deals with pricey renewable generation -- and marketers cannot get guaranteed cost recovery through a ratebase.

          The PUC decision is silent on how the rules would apply to power retailers, leaving that to cases implementing SB 695 that raised the cap on shopping in California.

          Another decision on the agenda would put the same use limits that utilities face -- a 40% TREC use cap -- onto retailers (RT, Oct-05).  The Western Power Trading Forum (WPTF) and the Alliance for Retail Energy Markets (AREM) want the cap removed entirely.  If they have to live with it, they support the proposal's removal of it at the end of next year as long as the PUC does not take action to extend it.

          The overarching position on the cap is shared with utilities but the three IOUs still want to see any competitors fall under the exact same rules they do for renewable portfolio standard (RPS) compliance.

          Southern California Edison (SCE) pushed back against TURN's argument that the TREC limit should be lowered back to 25% where it was when the PUC issued its eventually-aborted order this spring.  TURN and others claim that the use of TRECs would dominate utilities' RPS compliance strategies to the detriment of in-state renewables, SCE noted in its comments.

          Getting to the 33% RPS would take almost a tripling of renewable power from 27 TWH to 75 TWH in 2020 and that will take a significant amount of new renewable plants.  The PUC believes TRECs will actually help new generation get built by offering different revenue streams to developers.

          SCE recently struck numerous deals for in-state renewables and its portfolio is forecasted to include over 80% California green power through 2020 -- with some years exceeding 90%.

          Parties from all corners of the industry argued that out-of-state renewable projects with firm delivery paths into California should count as bundled deals -- with both energy and TREC components.  That would comply with the plain meaning of bundled and REC-only transactions, said SCE.