California Passes Law to Increase Renewable Portfolio Standard

On April 12, 2011, Governor Jerry Brown signed SBX1 2, which increases California’s Renewable Portfolio Standard to require 33% of electricity to come from renewable sources by 2020.  The law replaces an Executive Order created by Governor Schwarzenegger in 2009, which called for the same renewable energy target. It makes the 33% by 2020 target legally binding, which sends a market signal that the state is committed to developing renewable energy resources. The new legislation was sponsored by Senator Joe Simitian (D – Palo Alto) and is one of the most aggressive RPS policies in the country.

The new bill is an extension of a law passed in 2006 that required 20 percent of California’s electricity to come from renewable sources by 2010.  However, the new law includes publicly owned utilities (POUs), while the previous law applied to only investor-owned utilities (IOUs) and electric service providers (ESPs). This means the new legislation will cover 100% of the state’s electricity, instead of only the 76% provided by IOUs and ESPs. Under the new measure, about 75% of the renewable generation is expected to come from IOUs and ESPs, with the remainder coming from POUs. 

The policy is projected to reduce greenhouse gas emissions below business-as-usual levels by the equivalent of 12 to 13 million metric tons of carbon dioxide per year by 2020.

Press Release

SBX1 2