Southern California Edison Forum – Renewable Auction Mechanism (RAM)

28 January 2014 Renewable Energy Outlook Blog

On January 24, 2014, Southern California Edison (SCE) held a forum on its Renewable Auction Mechanism (RAM). RAM, a program open to all Renewable Portfolio Standard eligible technologies for projects generally not less than 3 MW and not greater than 20 MW and which are interconnected within any of the service territories of the three major utilities in California (SCE, Pacific Gas & Electric, and San Diego Gas & Electric), is designed to contribute toward compliance with California’s goals for renewable energy procurement. Under the RAM program, SCE is required to procure 754.4 MW in three separate resource categories: 1) peaking, as-available; 2) Non-peaking, as-available; and 3) baseload.

Participation in the RAM program requires all bidders to agree to a standard Power Purchase Agreement (PPA) drafted by SCE. One significant requirement of the standard PPA is that the Commercial Operation Date (COD) be within twenty-four (24) months after CPUC approval (with a potential 6-month extension in the event of regulatory delays beyond the bidder/seller’s control). SCE evaluates and ranks each bid separately within each of the resource categories mentioned above, based on price, plus transmission adder (the cost of upgrading SCE’s existing facilities to meet a proposed project’s load), minus resource adequacy benefits. Based on SCE’s prior RAM experience, the primary reason for a bid’s failure is its inherent inability to meet the required COD (based on interconnection studies and milestone schedules submitted with the offer).

The event held on the 24th focused on SCE’s fifth procurement period of the RAM program (RAM 5) and revealed several areas of the RAM 5 PPA to which SCE will be making changes. Of particular note, these changes are expected to include:

  • Safety – independent engineer report regarding written safety plan would be required
  • Network Upgrade Costs – termination right if network upgrade costs increase and the bidder/seller does not exercise a “buy-down right”
  • Curtailment – curtailment provisions would be simplified
  • Resource Adequacy and Full Capacity Deliverability Status – payments of FCDS TOD factors on date promised in the bid (rather than FCDS achieved) in order to align PPA with evaluation
  • Shared Facilities – provisions related to shared facilities would be put in the PPA (rather than in a consent)

SCE’s proposed PPA is expected to be filed with the CPUC, along with SCE’s Tier 3 Advice Letter proposing changes to RAM 5, on February 7, 2014. Interested parties will have twenty (20) days from then to submit comments on the proposed PPA and SCE’s Tier 3 Advice Letter. Shortly thereafter, the CPUC will draft a proposed resolution. Interested parties will have another twenty (20) day comment period on the proposed resolution before the final resolution will be voted on by the CPUC. The deadline to submit bids to SCE is June 27, 2014.

For further information on the RAM 5, click here.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services

Insights