The California Public Utilities Commission on July 2 proposed Liberty Power and Gexa Energy pay a combined total of about $2 million in fines for their failure to meet the state’s renewable-energy procurement requirements.
Liberty Power faces a $430,000 fine because it did not procure 20 percent of its power from renewable sources for the 2011-2013 period, and Gexa Energy faces a $1.7-million fine for the same reason.
Liberty Power said it could not meet the procurement requirements because of market forces beyond its control. Liberty said market conditions made it difficult to find sellers willing to provide small quantities of renewable-energy credits at a fixed price, adding that most sellers offered variable pricing that included additional charges.
However, the CPUC said Liberty could have procured renewable energy from other sources but chose not to do so. The commission concluded that all “reasonable actions under the retail seller’s control to achieve full compliance were not taken.”
Gexa Energy, although it procured renewable energy from 2011 to 2013, did not sign long-term contracts for its renewable energy. The CPUC requires a 10-year contract for renewables portfolio standard plans, but Gexa signed a three-year contract. Gexa said the 10-year contracting requirement should not apply to it because its first year of operation was 2013, the last year of the RPS compliance period.
Procurement requirements do not excuse new electricity providers from the 10-year contracting requirement, the CPUC said in its proposed decision, concluding, “Gexa’s argument is rejected and its Petition for Modification is denied.”
The CPUC is responsible for establishing compliance targets for the amount of renewable energy that retail sellers of electricity must procure and for determining compliance with the RPS. Retail sellers include electrical corporations, energy service providers and community choice aggregators.
Any penalties collected in this case go to the California Energy Commission’s Electric Program Investment Charge fund. The EPIC program invests about $130 million annually in research to expand the use of renewable energy, build a safe and resilient electricity system, advance technology solutions, and enable a more decentralized electric grid.