Bioenergy

Background

In 2012, the California legislature passed SB 1122 (Rubio), which requires investor owned utilities (IOUs) to procure up to 250 MW of small-scale utility bioenergy under a feed-in tariff. California’s feed-in tariff is called the Renewable Market Adjusting Tariff (ReMAT), a program where renewable generators at 3 MW or less are able to sell their renewable generation at a set price and with a standardized contract.  

In response to the legislation, the CPUC has issued a Consultant Report on "Small‐Scale Bioenergy: Resource Potential, Costs, and Feed‐in Tariff Implementation Assessment" associated with implementation of SB 1122.

 

ORA Position

ORA supports an implementation plan that will promote market competition which can lower the cost of procuring bioenergy.  A non-competitive bioenergy market could result in higher prices. Accordingly, ORA recommends:

  • The CPUC and the utilities should strive to keep the procurement costs of the program low.  
  • The utilities account for the potential benefits of carbon offset revenue to dairy-waste bioenergy projects in their RPS Procurement Plans in order to realize greater value for ratepayers.
  • Utilities should consider how the sale of carbon offset credits generated by the bioenergy facilities will impact their procurement decisions, project valuation, and contract terms moving forward.
  • The CPUC should require a liquidated damages provision in power purchase agreements to ensure that the contracted facility meets its category requirements throughout its contract term.
  • Pre time-of-day program starting price should be based on pre time-of-day bid prices in the renewable auction mechanism.
  • Stakeholders should review allocations among utilities and categories after some experience with the program.

See ORA’s December 20, 2013 Opening Comments of the CPUC Staff proposal to implement SB 1122.

See ORA’s April 24, 2013 Informal Comments to CPUC staff on the Consultant Report.

See ORA’s June 14, 2013 Follow-up Informal Comments to CPUC staff on the Consultant Report.

 

Proceeding Status

Reply Comments are due on January 16, 2014.

See the Proceeding docket.