Renewable Market Adjusting Tariff (ReMAT)

Summary

Note: Program Period 6 for the Re-MAT program began in September 2014. The feed-in tariff program for bioenergy projects was established by SB 1122 but will require action by the CPUC before it is available.  The CPUC's proposed rules can be found here. 

All investor-owned utilities and publicly-owned utilities with 75,000 or more customers must make a standard Renewable Market Adjusting Tariff (ReMAT) available to their customers. As the ReMAT is meant to help the utilities meet California's renewable portfolio standard (RPS), all green attributes associated with the energy, including renewable energy credits (RECs), transfer to the utility with the sale. Any customer-generator who sells power to the utility under this tariff may not participate in other state incentive programs. The tariffs will be available until the combined statewide cumulative capacity of eligible generation installed equals 750 megawatts (MW) for the general ReMAT program, and 250 MW for the bioenergy ReMAT program. Each utility will be responsible for a portion of those cumulative totals based on their proportionate sales.

The CPUC has regulatory authority over the investor-owned utilities, but not publicly-owned utilities. Therefore, the rules adopted by the CPUC do not apply to the publicly-owned utilities. Instead, the governing board of each publicly-owned utility is wholly responsible for developing their tariffs within the parameters established by the legislature in CA Public Utilities Code § 399.32 (formerly CA Public Utilities Code § 387.6). The collective share of the 750 MW program capacity established by the legislature for which the investor-owned utilities are responsible is 493.6 MW. The remaining 256.4 MW is to be divided between the publicly-owned utilities. Investor-owned utilities are solely responsible for the 250 MW bioenergy program.

Investor-Owned Utilities (General ReMAT program)

The California ReMAT allows eligible customer-generators to enter into 10-, 15- or 20-year standard contracts with their utilities to sell the electricity produced by small renewable energy systems (up to 3 megawatts (MW)). The CPUC has separated the technologies eligible to participate in the feed-in tariff into three project type categories: Baseload (bioenergy and geothermal), As-Available Peaking (solar), and As-Available Non-Peaking (wind and hydro). The ReMAT starting price is based on the weighted average of the three investor-owned utilities highest executed contract resulting from the Renewable Auction Mechanism (RAM) auction held in November 2011. Based on the results of that auction the starting price was $89.23 per megawatt-hour (MWh). As of September 2014, the current price for Baseload and As-Available Non-Peaking resources remains $89.23 per MWh; the current price for As-Available Peaking resources is $57.23 per MWh.

The CPUC built in price adjustment mechanisms to allow the program to adapt to changing market conditions. Interested generators must start by submitting a program participation request with the utility. The utility will establish a queue on a first-come first-served basis for each product type and will extend a ReMAT price offer to the applicants. The applicant can either accept or reject the contract. The price adjustments are only triggered if at least five projects with different developers for a certain product type apply. If no projects accept the Re-MAT, or less than 50% of the initial starting capacity for that project type accept the Re-MAT after its first two months, then the price will be escalated by $4 per MWh for the third and fourth months. The price will continue to escalate in subsequent two-month blocks until the subscription capacity is equal to 50% or more of the initial starting capacity for that project type. Similarly, if the program demonstrates excessive interest, the Re-MAT will be adjusted downward every two months.

Investor-Owned Utilities (Bioenergy ReMAT program)

SB 1122 of 2012 requires the investor-owned utilities to operate a separate ReMAT program for a cumulative total of 250 MW of bioenergy projects, separate from the wider 750 MW program. The legislation subdivided the 250 MW limit across different bioenergy sources:

• 110 MW for biogas from wastewater treatment, municipal organic waste diversion, food processing, and codigestion
• 90 MW for dairy and other agricultural bioenergy
• 50 MW for bioenergy using byproducts of sustainable forest management

The CPUC, in consultation with the California Energy Commission (CEC), the State Air Resources Board, the Department of Forestry and Fire Protection, the Department of Food and Agriculture, and the Department of Resources Recycling and Recovery, may reallocate the 250 MW requirement among the categories if they determine the allocations referenced above are not appropriate. The legislation sets a deadline of June 1, 2013 for this new program to be in place. 

Publicly-Owned Utilities

All publicly-owned utilities with 75,000 or more customers are required to develop feed-in tariffs by July 1, 2013. In determining the rate to pay under the tariffs, publicly-owned utilities must consider:

• The value of every kilowatt-hour (kWh) on a time of delivery basis
• Avoided costs for distribution and transmission system upgrades
• The ability of systems to offset peak demand on the distribution circuit
• All current and anticipated environmental and greenhouse gas reduction compliance costs

CA Public Utilities Code § 399.32 provides more guidance for publicly-owned utilities in developing their tariffs, including conditions in which the utility may limit the program.

Customers of publicly-owned utilities with 75,000 or more customers should contact their utility for more information. Customers of one of the investor-owned utilities can contact the appropriate program administrator for more information:

Southern California Edison
George Wiltsee
(626) 302-4945
george.wiltsee@sce.com
http://www.sce.com/EnergyProcurement/renewables/renewables-standard-contracts.htm

Pacific Gas and Electric
Feed-inTariffs@pge.com
http://www.pge.com/b2b/energysupply/wholesaleelectricsuppliersolicitation/standardcontractsforpurchase/

San Diego Gas and Electric
Uyen Nguyen,
(858) 650-1973
UNguyen@semprautilities.com
http://sdge.com/node/654


Background:
California enacted legislation (Assembly Bill 1969) in September 2006 requiring every electrical corporation to file with the California Public Utilities Commission (CPUC) a standard tariff for renewable energy output produced by a public water or wastewater agency that is a retail customer of an electrical corporation. A subsequent CPUC decision (D.07-07-027), issued in July 2007, authorized two expansions of the tariffs. First, Pacific Gas and Electric (PG&E) and Southern California Edison (SCE) were required to submit separate tariffs for the purchase of eligible renewable generation from entities other than public water and wastewater agencies. Second, PG&E, SCE and San Diego Gas and Electric (SDG&E) were all required to offer both a full buy/sell option and an excess sale option in each tariff submitted for approval. Other electrical corporations were only required to offer the full buy/sell option, but they could offer both options if they chose to do so. The Public Utilities Code of California was subsequently amended by SB 380 of 2008, and again by SB 32 of 2009, each increasing the individual system capacity and aggregate capacity allowed statewide under the Feed-in Tariff program. Pricing under this program was originally tied to the Market Price Referent, but decision 12-05-035 changed the pricing mechanism to tie it to the Renewable Market Adjustment Tariff.