On Jan. 13, 2011, by a 3-0 vote, the California Public Utilities Commission (CPUC) announced a decision again authorizing the procurement of tradable renewable energy credits (TRECs) by the three largest California investor-owned electric utilities (IOUs) to satisfy a portion of their obligations under the California Renewables Portfolio Standard (RPS) program (2011 TREC Decision).

The 2011 TREC Decision essentially reinstates the Commission’s decision of March 16, 2010 (March 2010 Decision). The March 2010 Decision had initially authorized the use of TRECs for purposes of RPS compliance.

An earlier DWT advisory featured the March 2010 Decision and can be found here (see full advisory below for link).

The 2011 TREC Decision thus ends the almost year-long stalemate in which the CPUC and the Legislature debated the integration of TRECs into the overall RPS program. The “product” of the administrative morass has been primarily delay and uncertainty—during that period, the CPUC allowed no TREC transactions.

The March 2010 Decision limits the three largest California IOU’s use of TRECs for RPS compliance to not more than 25 percent of the IOU’s annual RPS megawatt-hour (MWh) purchases. In addition, the CPUC set an “interim” price cap of $50 per MWh for the purchase of a TREC. Besides lifting the stay on the March 2010 Decision, the 2011 TREC Decision makes no substantive change, other than extending the period in which these caps on TREC use and costs will remain in effect until at least December 2013.