A bill that would set California on a trajectory toward carbon-free emissions from its electric power sector cleared a major hurdle with its passage through the California State Legislature. SB 100 (De León), The 100 Percent Clean Energy Act of 2018, sets a state policy that eligible renewable energy and zero-carbon resources supply 100 percent (%) of all retail sales of electricity in California by 2045.
The bill also accelerates California’s Renewables Portfolio Standard (RPS), which, pursuant to a 2016 bill by the same author (SB 350), already mandates that load-serving entities procure at least 50% of retail sales from eligible renewable energy resources by 2030; under SB 100, the 2030 target will be increased to 60%, and the 50% target will be advanced to 2026, in recognition that California retail sellers are well on their way to achieving the target in advance of the existing deadlines.
California’s load-serving entities recently filed their first cycle of integrated resource plans with the California Public Utilities Commission (CPUC), identifying the procurement of resources they will each undertake to meet greenhouse gas (GHG) emissions reduction targets established by the California Air Resources Board, in coordination with the CPUC and California Energy Commission (CEC), for the electricity sector and each load-serving entity. Those targets are intended to reflect the electricity sector’s share of the reductions needed to achieve the economy-wide target established by SB 32 (Pavley) of reducing GHG emissions to 40% below 1990 levels by 2030.
The SB 350 target-range adopted by CARB requires the electricity sector to achieve a reduction of between 51-72% below 1990 levels by 2030, even as significant electrification of other end uses of energy is anticipated to meet the economy-wide goal, resulting in increased demand for electricity. The mid-point of CARB’s target-range already reflects an assumption that load-serving entities would be procuring as much as 57% of retail sales from eligible renewable energy resources by 2030; so the increase to 60% required under SB 100 should not represent a significantly heavier burden than the electricity sector was already contemplating under SB 350’s existing targets.
But with fundamental changes underway within the California electricity market, such as the rise of behind-the-meter distributed energy resources and community choice aggregators (CCAs), the state’s investor-owned utilities (IOUs) are experiencing an unprecedented rate of departing load. According to a CPUC staff whitepaper, the CCAs, for example, are anticipated to represent a significant portion of retail load by the mid-2020s. Because the IOUs are projected to serve significantly less retail load, the denominator continues to decline in their calculations of whether they will meet the RPS targets. As the denominator declines, they need to procure fewer renewable resources to remain on target. Many CCAs, however, are still in early stages of formation and have yet to undertake the scale of renewables procurement that might be needed if they are to take up the slack.
Another bill under consideration during this legislative session, AB 893 (E. Garcia), addresses the challenge of near-term renewables procurement during this transition and would require the CPUC and CEC to consider establishing a state procurement entity to procure renewables and other preferred resources, including energy storage, on behalf of all retail sellers within the state.
SB 100 will now make its way to Governor Brown’s desk for signature. While the Governor is reportedly pressuring members of the Legislature to pass AB 813 (Holden), a bill that would advance consideration of transforming the California Independent System Operator into a multistate regional transmission system organization, the Governor may also be motivated to sign SB 100 in association with the Global Climate Action Summit he is co-hosting in San Francisco in mid-September.