California has continued its push towards reducing the state’s carbon footprint by passing another significant piece of climate change legislation, the California Renewable Energy Resources Act (known as Senate Bill X 1-2).  The new bill significantly increases the renewable portfolio standard (RPS) applied to California electricity providers, requiring them to obtain 33% of their power from renewable sources by the end of 2020.

SB X 1-2 builds upon predecessor legislation, Senate Bill 107, which set a requirement of a 20% RPS for 2010.  Under the new legislation, the current 20% standard raises to 25% on December 31, 2016, before rising to 33% by 2020--it also broadens the scope of the RPS requirement.  Under Senate Bill 107, publicly owned utilities were not subject to a strict 20% RPS, but under SB X 1-2 both public and investor-owned utilities will be required to meet the same standard.

While the new legislation allows out-of-state (including Canadian) imports of renewable generation to count towards the RPS, the complex rules of SB X 1-2 have the effect of significantly limiting the amount of out-of-state generation in favour of California generation.  In an attempt to limit the cost of new renewables, the bill provides for cost limits, and provides for waivers for electricity providers that cannot meet the targets for reasons beyond their control, such as inadequate transmission, permitting delays and curtailments.  The bill also attempts to streamline the process for obtaining permits for California renewables projects.

Of note for British Columbia, the bill contains provisions for review by the California Energy Commission (CEC) of run-of-river hydroelectric facilities in British Columbia, and requires the CEC to report whether those facilities should be eligible for RPS and other programs.

On another front, a California appeals court has temporarily stayed the injunction issued to the California Air Resources Board (CARB), that had prevented it from moving forward with its cap and trade plan while it undertakes analysis of its AB 32 Scoping Plan, as required by the Court’s earlier decision (see our April 26, 2011 post: “California Put Brakes on Cap and Trade Program”).   If the stay is continued, CARB may still be able to meet its announced January 1, 2012 start date for cap and trade in California.  This in turn increases the likelihood that British Columbia will proceed with cap and trade for 2012.