California’s Public Utilities Commission has authorized the procurement and use of tradable renewable energy credits (TRECs) for compliance with the California renewables portfolio standard (RPS) program, which will allow electric utilities to buy and sell credits to meet the state’s renewable energy goals.

The March 11, 2010, decision also delineates the structure and rules for a TREC market, which will keep megawatt-hours with credit sellers, but removes the seller’s right to claim that energy to meet statewide targets.

Under a temporary limit imposed by the decision, the three largest California utilities may use TRECs to meet no more than 25 percent of their annual RPS procurement obligations. The decision also imposes a transitional price cap of $50 per credit in renewable energy credit-only contracts used for RPS compliance by all investor-owned utilities.