California regulators recently passed an aggressive renewable portfolio standard (RPS) that will require 33 percent of electricity sold in the state to come from renewable sources, but a November ballot initiative could change things.

On September 23, 2010, the California Air Resources Board (CARB) approved a rule, as directed by an earlier executive order by Gov. Arnold Schwarzenegger, to increase the RPS from the current 20-percent requirement that sunsets at the end of 2010. The regulation is the product of coordination and cooperation by CARB, the California Public Utilities Commission, the California Energy Commission, and the California Independent System Operator. This action comes on the heels of the California Legislature's recent failure to pass a bill that would have made the 33-percent target a state law.

The rule's phased-in approach provides interim targets for renewable energy: 20 percent in 2012 – 2014, 24 percent in 2015 – 2017, 28 percent in 2018 – 2019, and 33 percent for 2020 and beyond. While the prior RPS covered investor-owned utilities and publicly owned utilities, this regulation extends to all entities that deliver electricity, including municipal utilities. Thus, public power entities like the Los Angeles Department of Water and Power, the largest public utility in the United States, will be required to meet the new RPS.

California has been a leader in aggressive RPS policies, which were first outlined in 2006 by A.B. 32, the state's landmark global warming law. Yet CARB's new rule could be short-lived. An initiative on California's November ballot, Proposition 23, would freeze the provisions of A.B. 32 until the state's unemployment rate drops to 5.5 percent or lower for four consecutive quarters. A suspension of A.B. 32 would likely lead to a corresponding freeze on renewable energy expansion.