Greening the Grid in California

[...] the CPUC has only indirect influence on these private, nonutility generators by approving or disapproving IOU rate recovery from their customers for the costs of electricity from nonregulated entities contracted for purchase through Power Purchase Agreements (PPAs). To be successful, however, three complementary strategies must be pursued and carefully coordinated: ( 1 ) improving energy efficiency through both state regulatory standards and demand-side management programs funded through utility ratepayer charges; (2) implementing renewable portfolio or energy standards, requiring utilities to purchase or generate a specified amount of their total electricity needs through qualifying renewable generation sources; and (3) strategic investments in transmission to move renewable power from high resource value generation sites to demand centers with minimal social and environmental impacts. [...] implementation of the renewable portfolio or energy standards must include nuanced attention to technology-specific contract structures and payment schemes that recognize all of the long-run avoided cost benefits of renewable generation.