Section 3206 - Optional Compliance Measures(a) In meeting its RPS procurement requirements, the governing board of a POU may adopt at a noticed public meeting any of the following measures: (1) Excess procurement (A) A POU may adopt rules permitting the POU to apply excess procurement accrued in one compliance period to a subsequent compliance period, as specified in section 3206(a)(1)(B)-(H):(B) Excess procurement may be accrued in a compliance period only if the POU has applied sufficient electricity products to satisfy its RPS procurement requirements of the compliance period. A POU that applies an optional compliance measure described in section 3206(a)(2)-(4) to satisfy its RPS procurement requirements of the compliance period may not accrue excess procurement for that compliance period.(C) Excess procurement accrual will be subject to the following limitations for the compliance periods beginning January 1, 2011, through December 31, 2020, except as specified in section 3206(a)(1)(G): 1. Electricity products that meet the criteria of section 3202(a)(1) or section 3202(a)(3), and are classified in Portfolio Content Category 3 may not be accrued as excess procurement.2. Electricity products that meet the criteria of section 3202(a)(1) and that exceed the maximum limit for Portfolio Content Category 3 for the compliance period, as specified in section 3204(c), must be subtracted from the calculation of accrued excess procurement.3. Electricity products procured under contracts of less than 10 years in duration in accordance with section 3206(a)(1)(C)4. shall be subtracted from the calculation of accrued excess procurement, unless the electricity product meets the criteria in section 3202(a)(2).4. For purposes of calculating accrued excess procurement for the compliance periods beginning January 1, 2011, through December 31, 2020, except as specified in section 3206(a)(1)(G), if electricity products are procured under a contract that has been amended to extend the term, the duration of the amended contract will be calculated from the original contract execution date to the amended contract end date. If electricity products are procured under a contract of less than 10 years in duration that has been amended to extend the total term to at least 10 years in duration, then electricity products generated as of the month and year in which the contract amendment occurs will be eligible to qualify as excess procurement.(D) Excess procurement accrual will be subject to the following limitations for the compliance periods beginning on or after January 1, 2021, except as specified in section 3206(a)(1)(G): 1. Electricity products that meet the criteria of section 3202(a)(1) or section 3202(a)(3), and are classified in Portfolio Content Category 2 or Portfolio Content Category 3, may not be accrued as excess procurement.2. Electricity products that meet the criteria of section 3202(a)(1) and that exceed the maximum limit for Portfolio Content Category 3 for the compliance period, as specified in section 3204(c), must be subtracted from the calculation of accrued excess procurement.(E) A POU that opts to allow the application of excess procurement as part of its renewable energy resources procurement plan or enforcement program may begin accruing excess procurement no earlier than January 1, 2011.(F) Electricity products accrued as excess procurement may be applied toward any future compliance periods, except as specified below:1. Electricity products accrued in accordance with section 3206(a)(1)(C) that are classified in Portfolio Content Category 2 may not be applied toward the RPS procurement requirements of a compliance period beginning on or after January 1, 2028.(G) Notwithstanding section 3206(b), a POU may adopt rules pursuant to this section 3206(a)(1) no later than 30 days after the effective date of these regulations, permitting the POU to make an election for voluntary early compliance with section 3204(d) for the compliance period beginning January 1, 2017, in order for the provisions of section 3206(a)(1)(C) to take effect beginning January 1, 2017. The provisions of section 3206(a)(1)(C) shall take effect beginning January 1, 2017, only if the POU makes an election pursuant to its adopted rules and satisfies the requirements of section 3204(d) for that compliance period.(H) Excess procurement accrued in a compliance period shall be calculated as follows: 1. The numerical expression of the excess procurement accrual permitted for compliance periods beginning January 1, 2011, through December 31, 2016, is: Excess Procurement = EPX - (RPSX - BX) - (S3X + STCX)
EPX = Electricity products retired for the compliance period X
RPSX = The RPS procurement target calculated in section 3204(a) for compliance period X or, if greater than the target, the amount of electricity products applied toward the target. This may include electricity products retired for compliance period X, excess procurement accrued in a prior compliance period, or historic carryover pursuant to section 3206(a)(5), that the POU has applied toward the target.
BX = Any excess procurement accrued in a prior compliance period or historic carryover pursuant to section 3206(a)(5) that the POU applied toward the RPS procurement target calculated in section 3204(a) for compliance period X
S3X = Any remaining retired electricity products that meet the criteria of section 3202(a)(1) or section 3202(a)(3), and the definition of Portfolio Content Category 3
STCX = Any remaining retired electricity products that meet the criteria of section 3202(a)(1) or section 3202(a)(3), and are associated with contracts less than 10 years in duration in accordance with section 3206(a)(1)(C)4.
2. The numerical expression of the excess procurement accrual permitted for the compliance period beginning January 1, 2017 through December 31, 2020, is either: i. The same equation as specified above in section 3206(a)(1)(H)1. for compliance periods ending before January 1, 2017, orii. For POUs that qualify for and elect to use section 3206(a)(1)(G), the same equation as specified below in section 3206(a)(1)(H)3. for compliance periods beginning on or after January 1, 2021.3. The numerical expression of the excess procurement accrual permitted for the compliance periods beginning January 1, 2021, is either: Excess Procurement = EPX - (RPSX - BX) - (S3X + S 2X)
S2X = Any remaining retired electricity products that meet the criteria of section 3202(a)(1) or section 3202(a)(3) and the definition of Portfolio Content Category 2
(I) Notwithstanding section 3206(a)(1)(A)-(H), a POU that meets the criteria of section 3204(b)(4) or section 3204(b)(5) may adopt rules permitting the POU to apply excess procurement accrued in one compliance period to a subsequent compliance period, subject to the following limitations.1. Unbundled RECs that do not meet the criteria of section 3202(a)(2) may not be accrued as excess procurement.2. For the compliance periods between January 1, 2011, through December 31, 2020, except as specified in section 3206(a)(1)(I)3., electricity products procured under contracts of less than 10 years in duration in accordance with section 3206(a)(1)(C)4. shall be subtracted from the calculation of accrued excess procurement, unless the electricity product meets the criteria in section 3202(a)(2).3. Notwithstanding section 3206(b), a POU may adopt rules no later than 30 days after the effective date of these regulations permitting the POU to make an election for voluntary early compliance with section 3204(d) for the compliance period beginning January 1, 2017, in order to use the calculation for accrued excess procurement in section 3206(a)(1)(I)6.iii. for the compliance period beginning January 1, 2017. A POU may use the calculation in section 3206(a)(1)(I)6.iii. for the compliance period beginning January 1, 2017, only if the POU makes an election pursuant to its adopted rules and satisfies the requirements of section 3204(d) for that compliance period.4. A POU that opts to allow the application of excess procurement as part of its renewable energy resources procurement plan or enforcement program may begin accruing excess procurement no earlier than January 1, 2011.5. Electricity products accrued as excess procurement may be applied toward any future compliance periods.6. Excess procurement accrued in a compliance period shall be calculated as follows:i. The numerical expression of the excess procurement permitted to be accrued for compliance periods beginning January 1, 2011, through December 31, 2016, is as follows: Excess Procurement = (EPX) - (RPSX - BX) - (URX + STCX)
EPX = Electricity products retired for compliance period X
RPSX = The RPS procurement target calculated in section 3204(a) for compliance period X or, if greater than the target, the amount of electricity products applied toward the target. This may include electricity products retired for compliance period X, excess procurement accrued in a prior compliance period, or historic carryover pursuant to section 3206(a)(5), that the POU has applied toward the target.
BX = Any excess procurement accrued in a prior compliance period or historic carryover pursuant to section 3206(a)(5) that the POU applied toward the RPS procurement target calculated in section 3204(a) for compliance period X
URX = Any remaining electricity products retired for compliance period X that meet the criteria of section 3202(a)(1) or section 3202(a)(3), and the definition of unbundled
ii. The numerical expression of the excess procurement permitted for the compliance period beginning January 1, 2017, through December 31, 2020, is either: a. The same equation as specified above in section 3206(a)(1)(I)6.i. for compliance periods ending before January 1, 2017, orb. For POUs that adopt rules and elect to use section 3206(a)(1)(I)3., the same equation as specified below in section 3206(a)(1)(I)6.iii.iii. The numerical expression of the excess procurement permitted for the compliance periods beginning January 1, 2021, except as specified in section 3206(a)(1)(I)3. is: Excess Procurement = (EPX) - (RPSX - BX) - URX
(2) Delay of timely compliance (A) A POU may adopt rules permitting the POU to determine that conditions beyond the control of the POU exist to delay timely compliance with RPS procurement requirements, as defined in section 3204. The POU's adopted rules shall limit the determination to one or more of the causes for delay specified in section 3206(a)(2)(A)1.-4. The POU's determination shall include information showing that the POU would have met its RPS procurement requirements but for the cause of delay. 1. There is inadequate transmission capacity to allow sufficient electricity to be delivered from eligible renewable energy resources, or proposed eligible renewable energy resource projects, to the extent applicable, using the current operational protocols of the balancing authority in which the POU operates. A POU that owns transmission or has transmission rights shall include in its determination information showing how the inadequate transmission capacity delayed timely compliance and that: i. The POU has undertaken all reasonable measures under its control and consistent with its obligations under local, state, and federal laws and regulations to develop and construct new transmission lines or upgrades to existing lines intended to transmit electricity generated by eligible renewable energy resources, in light of its expectation for cost recovery.ii. The POU has taken all reasonable operational measures to maximize cost-effective purchases of electricity from eligible renewable energy resources in advance of transmission availability.2. Permitting, interconnection, or other circumstances have delayed procured eligible renewable energy resource projects, or there is an insufficient supply of eligible renewable energy resources available to the POU. The POU must include in its determination information showing how the permitting, interconnection, or other circumstances caused delayed projects or insufficient supply and that: i. The POU prudently managed portfolio risks, including, but not limited to, holding solicitations for RPS-eligible resources with outreach to market participants and relying on a sufficient number of viable projects to achieve RPS procurement requirements.ii. The POU sought to develop either its own eligible renewable energy resources, transmission to interconnect to eligible renewable energy resources, or energy storage used to integrate eligible renewable energy resources.iii. If the cause for delay or insufficient supply was foreseeable, the POU procured an appropriate minimum margin of procurement above the level necessary to comply with the RPS to compensate for foreseeable delays or insufficient supply. The POU's determination shall identify the minimum margin of procurement that the POU deemed appropriate to compensate for foreseeable delays or insufficient supply.iv. The POU had taken reasonable measures to procure cost-effective distributed generation and allowable unbundled RECs.3. Unanticipated curtailment of eligible renewable energy resources, if the delay of timely compliance would not result in an increase in greenhouse gas emissions. The POU's determination shall include information showing that unanticipated curtailment of eligible renewable energy resources delayed timely compliance and did not result in an increase in greenhouse gas emissions.4. Unanticipated increase in retail sales due to transportation electrification. For purposes of this section 3206(a)(2)(A)4., "transportation electrification" is defined in Public Utilities Code section 237.5. The POU's determination shall include information showing that it considered the following:i. Whether transportation electrification significantly exceeded forecasts in the POU's service territory based on the best and most recently available information available to the POU. Transportation electrification forecasts may include, but are not limited to, information filed with the State Air Resources Board, the Commission, or another state agency, forecasts in the POU's integrated resource plan developed pursuant to Public Utilities Code section 9621, or other forecasts developed or approved by the POU.ii. Whether the POU has taken reasonable measures to procure sufficient resources to account for unanticipated increases in retail sales due to transportation electrification.(3) Cost limitations (A) A POU may adopt rules for cost limitations on the procurement expenditures used to comply with its RPS procurement requirements.(B) Adopted cost limitation rules shall be set at a level that the POU has determined will prevent disproportionate rate impacts.(C) When applying procurement expenditures under an adopted cost limitation rule, the POU shall apply only those types of procurement expenditures that are permitted under the adopted cost limitation rule.(D) Adopted cost limitation rules shall include planned actions to be taken in the event the projected cost of meeting the RPS procurement requirements exceeds the cost limitation. Such actions may include, but are not limited to, refraining from entering into new contracts or constructing facilities for eligible renewable energy resources beyond the quantity that can be procured within the cost limitation.(4) Portfolio balance requirement reduction(A) A POU may adopt rules that allow for the reduction of the portfolio balance requirement for Portfolio Content Category 1 for a specific compliance period consistent with Public Utilities Code section 399.16(e).(B) The need to reduce the portfolio balance requirements for Portfolio Content Category 1 must have resulted because of conditions beyond the control of the POU as provided in section 3206(a)(2).(C) A reduction of the portfolio balance requirement for Portfolio Content Category 1 below 65 percent for any compliance period after December 31, 2016, will not be considered consistent with Public Utilities Code section 399.16(e).(D) A POU that reduces its portfolio balance requirements for Portfolio Content Category 1 must adopt these changes at a publicly noticed meeting, and must include this information in an updated renewable energy resources procurement plan submitted to the Commission. The notice to consider the portfolio balance requirement reduction and the procurement plan must include the following information: 1. The compliance period for which the reduction may be adopted.2. The level to which the POU has reduced the requirement.3. An explanation of how the needed reduction resulted from conditions beyond the control of the POU as provided in section 3206(a)(2).(5) Historic Carryover (A) A POU may adopt rules that allow for procurement generated before January 1, 2011, that meets the criteria of section 3202(a)(2), that is in excess of the sum of the 2004 - 2010 annual procurement targets defined in section 3206(a)(5)(D) and that was not applied to the RPS of another state or to a voluntary claim, to be applied to the POU's RPS procurement target for the compliance period ending December 31, 2013, or for any subsequent compliance period.(B) The historic carryover must be procured pursuant to a contract or ownership agreement executed before June 1, 2010. Both the historic carryover and the procurement applied to the POU's annual procurement targets must be from eligible renewable energy resources that were RPS-eligible under the rules in place for retail sellers at the time of execution of the contract or ownership agreement, except that the generation from such resources need not be tracked in the Western Renewable Energy Generation Information System. If the contract or ownership agreement is executed prior to April 21, 2004, the procurement must be from resources that were RPS-eligible under the rules in the RPS Guidelines in place as of April 21, 2004.(C) Historic carryover shall be calculated by subtracting procurement generated between January 1, 2004, and December 31, 2010, in an amount that is equal to the sum of the 2004 - 2010 annual procurement targets defined in section 3206(a)(5)(D) and the amount of procurement that was sold, claimed for a voluntary program, or claimed for compliance with the RPS of another state, from the total procurement generated during that same period. If a POU was not in existence as of January 1, 2004, historic carryover shall be calculated based on procurement generated between the first full calendar year during which the POU became operational and December 31, 2010.(D) The RPS compliance obligation used to calculate a POU's historic carryover shall be based on the following: 1. A baseline of an amount equal to 2001 procurement divided by 2001 retail sales, multiplied by 2003 retail sales, plus 1 percent of 2001 retail sales (or, if the POU was not in existence in 2001, "2001" in this calculation shall be replaced by the first full calendar year in which the POU was operational, and "2003" in this calculation shall be replaced by the second full calendar year after which the POU was operational). The numerical expression of the baseline is: Baseline = (EP2001 / RS2001) x RS2003 + (0.01 x RS2001)
EPx = Electricity products procured and retired and applied toward the RPS procurement target for the specified year X
RSx = Retail sales made by the POU for the specified year X
2. Annual procurement targets for 2004 - 2010 that are equal to the lesser of 20 percent of the previous year's retail sales or 1 percent of the previous year's retail sales greater than the annual procurement target for the previous year. The POU's annual procurement target for 2004 shall be equal to the lesser of 20 percent of 2003 retail sales or the baseline plus 1 percent of 2003 retail sales, and the annual procurement target for 2010 shall be an amount equal to 20 percent of 2010 retail sales. For POUs that were not in existence in 2001, "2003" in this calculation shall be replaced by the second full calendar year after which the POU became operational, and "2004" in this calculation shall be replaced by the third full calendar year after which the POU became operational.(E) A POU that adopts rules allowing for the use of historic carryover shall submit all applicable procurement claims for January 1, 2004 - December 31, 2010 (or the date on which the POU became operational through December 31, 2010), baseline calculations, annual procurement target calculations, and any other pertinent documentation to the Commission within 90 calendar days after the effective date of these regulations. All applicable procurement claims must be retired and reported to the Commission within 90 calendar days after the effective date of these regulations to qualify as historic carryover.(b) Rules adopted under this section 3206 shall be in place and described in a POU's renewable energy resources procurement plan or enforcement program for a given compliance period if the POU intends to rely on these rules to satisfy or delay its RPS procurement requirements. The Commission may, when hearing a complaint against a POU under section 1240, consider the date of adoption of any rules adopted pursuant to this section that the POU relied upon to satisfy or delay its RPS procurement requirements.(c) Any rule or rule revision adopted under this section 3206 shall be submitted to the Commission within 30 calendar days after adoption. The rule or rule revision shall be submitted along with all reports, analyses, findings, and any other information upon which the POU relied in adopting the rule or rule revision.(d) A POU may request the Executive Director of the Commission to review any rule or rule revision adopted under this section 3206 to determine its consistency with the requirements of Public Utilities Code section 399.30. The Executive Director shall make a determination, to the extent reasonably possible, within 120 days of receipt of a complete request for review. A complete request for review shall include the rule or rule revision and all reports, analyses, findings, and any other information upon which the POU relied in adopting the rule or rule revision. The Executive Director may request additional information from the POU or solicit information from the public to make a determination. Failure of the Executive Director to make such determination within 120 days of receipt of the complete request for review shall not be deemed a determination that such rule or rule revision is consistent with the requirements of Public Utilities Code section 399.30.(e) A POU may apply an optional compliance measure in section 3206(a)(2) or 3206(a)(3) to satisfy or delay a portion or the entirety of a shortfall in meeting its RPS requirements under section 3204. A POU may also attribute different amounts comprising said shortfall to the cost limitation adopted in accordance with section 3206(a)(3) or to one or more conditions of the delay of timely compliance adopted in accordance with section 3206(a)(2).(f) A POU may apply a portfolio balance requirement reduction as described in section 3206(a)(4) to meet a portion or the entirety of a shortfall in meeting its portfolio balance requirement under section 3204(c). A POU may also attribute different amounts comprising said shortfall to one or more conditions of the portfolio balance requirement reduction adopted in accordance with section 3206(a)(4).(g) In determining a POU's compliance with the RPS procurement requirements, the Commission will not consider the application of any rule or rule revision adopted by a POU under this section 3206 that the Commission determines does not comply with Public Utilities Code section 399.30, these regulations, or any applicable order or decision adopted by the Commission pertaining to the RPS.Cal. Code Regs. Tit. 20, § 3206
1. New section filed 8-28-2013; operative 10-1-2013 (Register 2013, No. 35).
2. Amendment of subsection (a)(1)(A)3., new subsections (e)-(f) and subsection relettering filed 4-12-2016; operative 4-12-2016 pursuant to Government Code section 11343.4(b)(3) (Register 2016, No. 16).
3. Amendment filed 7-12-2021; operative 7-12-2021 pursuant to Government Code section 11343.4(b)(3) (Register 2021, No. 29).
4. Editorial correction of subsection (a)(1)(I)1. (Register 2021, No. 49). Note: Authority cited: Sections 25213 and 25218(e), Public Resources Code; and Section 399.30, Public Utilities Code. Reference: Sections 399.13, 399.15, 399.16 and 399.30, Public Utilities Code.
1. New section filed 8-28-2013; operative 10-1-2013 (Register 2013, No. 35).
2. Amendment of subsection (a)(1)(A)3., new subsections (e)-(f) and subsection relettering filed 4-12-2016; operative 4/12/2016 pursuant to Government Code section 11343.4(b)(3) (Register 2016, No. 16).
3. Amendment filed 7-12-2021; operative 7-12-2021 pursuant to Government Code section 11343.4(b)(3) (Register 2021, No. 29).
4. Editorial correction of subsection (a)(1)(I)1. (Register 2021, No. 49).