California TREC Market Held Up

On May 6, 2010, the California Public Utilities Commission (CPUC) released its decision to stay the prior decision authorizing the use of tradable renewable energy certificates (TRECs) for compliance with the state’s renewable portfolio standard (RPS) program. This decision came after the April 23, 2010 workshop presentations, in which California’s IOUs discussed the valuation components and calculation of REC pricing.

The decision will be stayed pending resolutions of two petitions 1) the joint petition filed by Southern California Edison Company, Pacific Gas and Electric Company, and San Diego Gas & Electric Company (the utility petition) and 2) the petition filed by the Independent Energy Producers Association (IEP).

As outlined in the CPUC’s decision, the petitions filed look to address the following points:

The utility petition seeks to:

• Revise the criteria for what transactions are bundled and what can be unbundled for TREC trading
• Apply the criteria only to contracts submitted for approval after the effective date of the decision
• Eliminate the temporary limit on TRECs for compliance with the RPS by the large utilities
• Expand the rules for “earmarking” TREC contracts to address current short-fall with future generation

The IEP petition seeks to:

• Revise the criteria for bundled and unbundled transactions with revisions different from the utility’s petition
• Expand the review of the least-cost best-fit methodology for RPS bid evaluation and set a time for its completion

In addition to the subjects the petitions seek to address, the decision also included the concurrences and dissents of the CPUCs commissioners. The full document can be viewed here.

SRECTrade will continue to watch the CPUC’s decision making process and provide updates as they become available.  We will maintain everything we know about it on our California SREC page.

Tags: CA SREC, CA SRECs, CA TREC, CA TRECs, California SREC, California SRECs, California TREC, California TRECs, TRECs