California’s 20% by 2010 Renewable Portfolio Standard (RPS) is one of the most ambitious in the United States.  In their 2008 Energy Action Plan Update, the California Public Utilities Commission (CPUC) and California Energy Commission (CEC) committed to evaluating an even more aggressive 33 % by 2020.  In order to reach this 33% target, some of the barriers that have been hindering RPS projects thus far must be addressed.

According to a July 2008 CPUC RPS Quarterly Status Report, since the RPG program was adopted in 2002, the CPUC has approved  95 contracts for 5,900 megawatts (MW) for new and existing RPS-eligible capacity.  Of these, 61 contracts (totaling 4,480 MW) are for new projects.  To date, only 14 contracts for approximately 400 MW have come online.  The CPUC identified the key barriers to renewable energy project development as the expiration of the federal Production and Investment Tax Credits, transmission, developer inexperience, financing, site control, permitting, among other factors.  Although responsible public agencies may not have control over all of these barriers, they can help by streamlining their permitting processes.

Take, for example, BrightSource Energy, a utility-scale solar thermal company based on Oakland, California, and its Ivanpah project.  BrightSource is seeking to develop three solar plants on about 5.3 square miles of federal Bureau of Land Management (BLM) property located near the Ivanpah Dry Lake in San Bernardino County near the California-Nevada border.  The Ivanpah project is expected to produce 400 MW, enough to power 300,000 homes.  The project is in the process of obtaining approvals from both BLM and CEC, and it was originally expected to be up and operating as early as 2011.  Although the project is one of the first in line for BLM approval, it has already seen some delay.  As recently reported in the New York Times, this could have broader implications for the market, as well as California’s ability to meet its RPS goals.  Earlier this year, BrightSource entered into a series of agreements to sell a potential 900 MW of solar power to northern California utility PG&E, from five large solar thermal plants including the Ivanpah project.  To avoid further delays, BrightSource has asked that CEC and BLM review its projects in parallel in order to streamline the approval process.

Although many people agree that renewable energy projects are a necessary component of our energy independence and climate change response, regulators must assess their  environmental and other impacts.  Appropriately streamlining the approval process, while ensuring appropriate governmental oversight, presents regulators with a great challenge.  But if we are to meet the ambitious renewable targets being set by California and many other states across the country, creating efficiencies in the permitting process is imperative.

For further information about this topic, please contact Akin Gump.