The California Public Utilities Commission (CPUC) has proposed a new renewable energy feed-in-tariff program that would require the state's investor-owned utilities to purchase electricity from midsized renewable energy systems – those ranging in size from 1 MW to 20 MW.
The CPUC proposal would establish a 1 GW pilot program requiring Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric to hold biannual competitive auctions – known as the Renewable Auction Mechanism – into which renewable developers could bid. The utilities would be required to award contracts until the megawatt requirement for each round was reached.
According to the Vote Solar Initiative, the CPUC program would use competition to establish prices that are both sufficient for project development and protective of ratepayers. Also, by continuing to deliver ratepayer value by driving down installed solar costs, the bidding mechanism is also more likely to provide a long-term market for solar power.