With the signing last week of California's 33% RPS, Governor Brown ensured California will continue to lead the country as a market for renewable electricity. The bill does a lot to fix the issues that might have slowed demand in the state for renewables. Now it's up to the industry to make it work.
The new law raises the RPS target to 33% by 2020 from the previous goal of 20%. And not a moment too soon. California's utilities have proven skeptics wrong by demonstrating the 20% target is now well within reach. In recent reports filed with the CPUC, PG&E revealed it has reached 17.7 percent while SCE Edison reached 19.4 percent. Both are expected to hit the 20% mark soon.
The law also improves on the old RPS by requiring all utilities to meet the new 33% standard. In addition to the ‘big 3’ investor owned utilities PG&E, SDG&E, and SCE, the bill is binding on the publicly owned utilities such as LADWP and SMUD (though SMUD has proactively worked towards RPS compliance already), and the electric service providers (ESPs) such as the Department of Water Resources.
The 33% RPS signing follows the overwhelming rejection by voters last year of Prop 23, which would have overturned California's defining climate legislation. The proposition received a record 61% no vote, firmly establishing voter's support for the direction the state has taken with climate and clean energy policy. And Governer Brown won easily in the same election on a platform that included building 12,000 megawatts of new renewable generating capacity in the state.
I think it would be a mistake however to take that support for granted. A recent NY Times article noted falling demand for green household products, providing a warning about the fickle, cost-sensitive nature of consumer demand for green goods. In the current economic landscape, support for clean energy could wane if costs don't maintain a downward trend. The key to maintaining strong support for the RPS will be to continue to drive the cost out of wind, solar, and other renewables.
To do that, we'll need some additional help from the government with some of the really hard permitting red tape that tends to drive up project costs unnecessarily. But make no mistake, the pressure is now squarely on us in the industry to 'make good' on the updated RPS. We have to show California and the rest of the states that we can fill that new demand with ever more cost-competitive clean energy. I think this industry is up to the challenge.