California Feed-In Tariff and New Deregulation-Let Try It Again
When I was at the RetailGreen Conference last week in Los Angeles, the conference was buzzing with talk about California's new foray back into deregulation of the energy generation market. Next year, California will once again allow its electric customers to purchase generation directly from suppliers and bypass the distribution company's standard offer. When this was attempted years ago, deregulation ended up being blamed for one of the greatest electricity crisis in American history.
In addition to the deregulation of California's energy markets, California is also expanding the requirements of "feed-in" tariffs. The new law doubles the maximum system size from the current 1.5 megawatts to 3 megawatts and requires long-term agreements that will be in effect for 10 to 20 years. It also increases the statewide cap for such feed-in tariff agreements to 750 megawatts, up from 500 megawatts. Utilities buying power under the feed-in tariff will be able to take credit for the renewable energy under the state's Renewable Portfolio Standard (RPS), which requires utilities to draw on renewable energy for one third of their power needs by 2020.
The California PUC still needs to determine the feed-in tariff rate which would really determine whether California will see real benefits from the feed-in tariff law.
