ity of
VERNON
ICALIFORNIA
CITY OF VERNON
RENEWABLE PORTFOLIO STANDARD (RPS)
PROCUREMENT PLAN AND ENFORCEMENT PROGRAM
(RPS COMPLIANCE PLAN UPDATE)
1.0 PURPOSE
On April 12, 2011, Governor Brown signed the California Renewable Energy Resources Act (Senate Bill 2 of the First Extraordinary Session, also known as SBX1 2) into law. This act required all load-serving entities in California to achieve a 33% Renewable Portfolio Standard (RPS) by 2020, with interim targets of an average of 20% for 2011-2013, 25% by 2016, and 33% by 2020. Additionally, SBX1 2 mandated that publicly owned utilities (POUs) develop a procurement plan and adopt an enforcement program.
In 2015, Senate Bill 350 (SB 350) introduced specific Greenhouse Gas (GHG) emissions reduction targets, aiming for a 40% reduction below 1990 levels by 2030 and an 80% reduction by 2050. SB 350 also increased RPS compliance requirements to 50% by 2030, with interim targets of 40% by 2024 and 45% by 2027.
Due to the significant impact of these provisions, SB 350 took effect in 2020.
In 2018, Senate Bill 100 (SB 100) accelerated the RPS targets set by SB 350, ensuring that at least 60% of California's electricity is renewable by 2030. This level of renewable generation must be maintained at or above 60% from 2030 onward.
SB 100 also requires renewable energy and zero-carbon resources to power 100% of retail electricity sold in California by 2045.
In 2022, Senate Bill 1020 (SB 1020) further revised state policy. It mandated that eligible renewable and zero-carbon resources supply:
• 90% of all retail electricity sales to California end-use customers by December 31, 2035,
• 95% by December 31, 2040, and
• 100% by December 31, 2045.
The City of Vernon has been actively working to meet legislative requirements regarding renewable resources. On January 3, 2012, the City Council adopted Resolution No. 2012-02, which established a Renewable Resources Procurement Plan and Enforcement Program in compliance with SBX1 2. This plan addressed Compliance Periods 1, 2, and 3, all of which Vernon has successfully completed.
On October 17, 2023, the City Council adopted the 2023 Integrated Resource Plan (IRP). The IRP is a 20-year strategy for delivering reliable and cost-effective electricity. The plan ensures compliance with regulatory requirements, focuses on clean energy generation, and addresses distribution system infrastructure and constraints, as updated by SB 350 and SB 100.
This Renewable Portfolio Standard Procurement Plan and Enforcement Program (RPS Compliance Plan) demonstrates the City of Vernon's commitment to renewable energy procurement consistent with state legislative requirements.
2.0 PROCUREMENT PLAN
2.1 PROCUREMENT TARGETS
Consistent with legislation, Vernon will increase the procurement of electricity from eligible renewable resources, including renewable energy credits, to meet the following targets.
• Compliance Period 1 (CP1): Between January 1, 2011, and December 31, 2013, the quantity of renewable energy procured shall average at least 20% of retail sales of electricity.
• Compliance Period 2 (CP2): Between January 1, 2014, and December 31, 2016, the quantity of renewable energy procured shall average at least 25% of retail sales of electricity by December 31, 2016.
• Compliance Period 3 (CP3): Between January 1, 2017, and December 31, 2020, the quantity of renewable energy procured shall average at least 33% of retail sales of electricity by December 31, 2020.
• Compliance Period 4 (CP4): Between January 1, 2021, and December 31, 2024, the quantity of renewable energy procured shall average at least 40% of retail sales of electricity by December 31, 2024.
• Compliance Period 5 (CP5): Between January 1, 2025, and December 31, 2027, the quantity of renewable energy procured shall average at least 52% of retail sales of electricity by December 31, 2027.
• Compliance Period 6 (CP6): Between January 1, 2028, and December 31, 2030, the quantity of renewable energy procured shall average at least 60% of retail sales of electricity by December 31, 2030.
• Compliance Period 7 (CP7): Between January 1, 2031, and December 31, 2033, the quantity of renewable energy procured shall average at least 65% of retail sales of electricity by December 31, 2033.
• Compliance Period 8 (CP8): Between January 1, 2034, and December 31, 2036, the quantity of renewable energy procured shall average at least 84% of retail sales of electricity by December 31, 2036.
Thereafter, the minimum procurement each calendar year shall be 90% of retail sales of electricity.
Beginning with CP4, the California Energy Commission (CEC) implemented the RPS Long-Term requirement for POUs, as mandated by SB 350. This new procurement rule requires that at least 65% of renewable energy procurement comes from long-term contracts lasting 10 years or more.
2.2 ELIGIBLE RESOURCES
Electricity procured to comply with this plan shall meet the eligibility requirements of the RPS Resource Eligibility Guide published by the CEC in effect at the time the resource was procured.
In general, electricity produced from the following technologies constitutes "eligible" resources: biomethane, biomass, solar thermal, photovoltaic, wind, geothermal, fuel cells using renewable fuels, low-impact hydroelectric generation, digester gas, municipal solid waste, landfill gas, ocean wave, ocean thermal, tidal current, or renewable distributed generation on the customer side of the meter and other sources deemed eligible by the CEC. Facilities can be located anywhere in the interconnected transmission system.
2.3 PORTFOLIO CATEGORIES (BUCKETS)
Categories (Buckets) Percentage of RPS
Procurement Target
Bucket 1: Energy from eligible resource that has the first CP 1: Minimum of 50% point of interconnection with a California balancing CP 2: Minimum of 65% authority or with distribution facilities used to serve end *CP 3: Minimum of 75% users within a California balancing authority that is
procured and remains a bundled product, or
schedules from any balancing authority to a California
balancing authority in real time either using traditional static hourly schedules, or dynamic schedules, without
substituting energy from another source with the
exception of energy associated with required ancillary
services. If another source provides real-time ancillary services to maintain an hourly import schedule into
California, only a fraction of the schedule generated
by the renewable resource will count.
Energy produced using out-of-state biomethane is
classified as a Bucket 1 product since electricity is
produced in the State.
Bucket 2: Energy from eligible resource procured as a CP 1: Maximum of 50% bundled product comprised of RECs and energy which CP 2: Maximum of 35% is unbundled then re-delivered to a California "CP 3: Maximum of 25% balancing authority where the REC is re-bundled and
delivered using substituted energy from another source
either in real-time or delayed. Such transactions shall be designed to ensure that the same quantity of
energy as produced by the facility is delivered to the
California balancing authority within the calendar year that the energy is produced.
Bucket 3: Energy or RECs from eligible resources that do CP 1: Maximum of 25% not meet the requirements of Bucket 1 or Bucket 2, CP 2: Maximum of 15% including unbundled RECs. *CP 3: Maximum of 10%
*Percentage requirement remains the same after CP3.
2.4 RENEWABLE RESOURCES PORTFOLIO
Table 1 below outlines the current estimated renewable energy portfolio Vernon procured during Compliance Period 4. Consistent with the law, the plan ensures that the quantity of renewable energy that will be procured for the Compliance Period.
Table 1: CURRENT RESOURCE PORTFOLIO
CP4 (2021-2024)
2021 2022 2023 2024
Retail Sales (MWh) Forecast 1,156,148 1,142,054 1,040,816 1,025.925 Renewables Requirement Total (MWh) 413,323 439,691 429,337 451,407 Bucket 1 309 992 329,768 322.002 338,555
Bucket 2 61,998 65,954 64,400 67,711
Bucket 3 41,332 43,969 42,934 45,141
Tables 2A & 2B identify the expected portfolio of renewable energy Vernon expects to procure through CP8.
TABLE 2A: EXPECTED RESOURCE PORTFOLIO CP5 - CP6
CP5 (2025-2027) CP6 (2028-2030)
Retail Sales (MWh) Forecast
Renewables Requirement Total (MWh)
Bucket 3
TABLE 2B: EXPECTED RESOURCE PORTFOLIO CP7 - CP8
CP7 (2031-2033) CP8 (2034-2036)
2031 2032 2033 2034 2035 2036
Retail Sales (MWh) Forecast 1,387,412 1,387,412 1,387,412 1,387,412 1,387,412 1,387,412 Renewables Requirement Total (MWh) 874,069 901,818 943,440 985,062 1,248,670 1,248,670 Bucket 1 655,552 676,363 707,580 738,797 936,503 936,503 Bucket 2 131,110 135,273 141,516 147,759 187,301 187,301 Bucket 3 87,407 90,182 94,344 98,506 124,867 124,867
2.5 PUBLIC NOTICE REQUIREMENT
• Pursuant to Section 399.30(f) and Cal. Code Regs. tit. 20 § 3205 (CEC RPS Regulations), each local publicly owned electric utility shall post notice, in accordance with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), whenever its governing body will deliberate in public on its renewable energy resources procurement plan.
• The renewable energy resources procurement plan, and any revisions or updates to the plan, shall be submitted to the CEC within 30 calendar days of adoption.
3.0 ENFORCEMENT PROGRAM
3.1 WAIVER FOR NONCOMPLIANCE
Vernon is committed to meeting the target quantities of renewable energy through the Procurement Plan. The legislation authorizes the City Council to waive Vernon's compliance requirements, consistent with Section 399.30(d) and Section 399.15(b) if Vernon can demonstrate that any of the following conditions are beyond its control and will prevent compliance. The conditions for waiver or delaying compliance include, but are not limited to the following (which may delay or indefinitely postpone a project):
• Rate Impacts: Consistent with Section 399.30(d) the addition of renewable energy resources should not require a disproportionate increase in retail electricity rates above the rates approved by the City Council. • Excess Procurement: Consistent with Section 399.30(d) excess procurement in one compliance period may be applied without limit to a subsequent compliance period in the same manner as allowed for retail sellers pursuant to Section 399.13 for any of the three eligibility "buckets". • Force Majeure Waivers: A force majeure event, such as natural disasters (Wildfires, earthquakes), extreme weather events, or other unforeseen disruptions, may delay a utility's ability to procure enough renewable energy to meet their targets. In such cases, the utility might petition for a waiver, provided they can demonstrate that the event was beyond their control and had a significant impact on their ability to meet the RPS. • Inadequate Transmission Supply: As described in Section 399.15(b) (5), inability to bring eligible renewable resources into California Independent System Operator due to transmission limitations, including outages, may be a limiting factor delaying timely compliance. The City Council has the authority to waive Vernon compliance for this instance. • Insufficient Supply of Eligible Renewable Energy Resources: If Vernon finds itself unable to procure sufficient renewable energy resources due to insufficient supply of eligible renewable energy resources, such inability will be considered a reasonable justification for not meeting procurement goals.
• Regulatory Delays Affecting Procurement: Vernon's ability to meet the requirements of SBX1 2 is expected to be tied to the ability to obtain timely approvals from the CEC regarding resource eligibility and resource certification. Consequently, delays attributable to the CEC and other regulatory agencies, to the extent they delay energy delivery and REC creation, are a legitimate excuse/reason for not achieving compliance goals.
• Additional Factors That May Delay Timely Compliance: Consistent with Section 399.15(b) (5) issues with permitting, interconnection, development (e.g., permitting, financing, etc.), operational problems (fires, balancing authority constraints, accidents, outages, etc.) or other circumstances that may delay procurement of renewable energy resource projects or insufficient supply of eligible renewable energy resources are all legitimate reasons that may justify a delay of timely compliance.
• Limiting or Delaying Compliance Obligation: The City Council reserves for itself the authority to limit or delay compliance with the obligations set forth herein to the fullest extent permitted by SBX1 2. Should the City Council exercise such authority, it shall do so at a properly noticed public meeting consistent with the following:
- City Council shall establish additional reporting requirements to satisfy future procurement requirements consistent with 399.15(b) (6). - City Council shall not waive enforcement unless all necessary reasonable efforts have been taken to achieve compliance 399.15(b)(7).
- Consistent with 399.15(b)(9) there will be no carryover of deficits between the compliance periods.
3.2 PROGRAM ADMINISTRATION
The General Manager of Vernon Public Utilities shall have the duty and responsibility of executing the RPS Compliance Plan outlined above and ensuring that it is done in full compliance with any applicable regulations issued there under. The General Manager shall inform the City Council at a public meeting if Vernon will not meet the procurement requirements set out above. The General Manager shall develop and present a plan to bring Vernon into compliance.
3.3 REPORTING REQUIREMENTS
Per SBX1 2, Vernon will provide the CEC documentation and reports, as required in 399.30(g) and 399.30(l).
Additionally, pursuant to Section 3207 - Compliance Reporting for POUs:
1. Vernon shall submit an annual report to the CEC by July 1. The annual reports shall include the information specified in Section 3207(c) of the CEC RPS Regulations.
2. By July 1, 2025; July 1, 2028; July 1, 2031; and by July 1 of every third year thereafter, Vernon shall submit to the CEC a compliance report that addresses the annual reporting requirements of the previous section, and information for the preceding compliance period as specified in Section 3207 (d) of the CEC RPS Regulations.