California TREC Decision Side-steps Energy Infrastructure of the Future

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Most of the discussions of tradable renewable energy credits (TRECs)in California revolve around the extent to which the State’s largeutilities can use TRECs for compliance with the California renewablesportfolio standard (RPS) program.  The utilities would like a free handto use as many RECs as possible, derived from sources both in-State andout-of-State – presumably RECs will be easier and cheaper to acquirethan new renewable generating facilities are to build.  The interests of the utilities are balanced by those of rate-payers as well as policyinitiatives, such as AB 32.  These interests move sometimes in oppositedirections, one toward less expensive retail energy and one toward moreenvironmentally sustainable energy generation.

As the revised decision on TRECs winds its slow and tortuous waythrough the California Public Utilities Commission (CPUC), it isbecoming clear that there will be a price cap ($50) and there will be alimit on use (30% likely) and that the cap and limit will expire at theend of 2013 “to give Energy Division sufficient time to develop [an]evaluative framework” to make sure the system works without snafu.  Seeprocedural trail to CPUC Proceeding R06-02-012.

Lost in the shuffle, however, is what many believe will be the energy infrastructure of the future – distributed generation (DG).  TheCalifornia Energy Commission (CEC) defines DG in the CaliforniaDistributed Energy Resource Guide as “small-scale power generationtechnologies (typically in the range of 3 to 10,000 kW) located close to where electricity is used (e.g., a home or business) to provide analternative to or an enhancement of the traditional electric powersystem.” The term “distributed” is borrowed from the computer industrywhere it has long been recognized that widely disbursed or “distributed” computing is more economic, more efficient and more secure thancentralized systems.

Original Article on The Leaf Exchange

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