Welcome to the California Energy Commission

Existing Renewables Facilities Program

In order to help attain the California Renewable Portfolio Standard's (RPS) goal of 20% of retail electricity generated from renewables by 2010, the California Energy Commission has developed and currently administers renewable energy incentive programs. The goal of these programs is to establish a competitive, self-sustaining renewable energy supply for California while increasing the near-term quantity of renewable energy generated in-state. The Existing Renewable Facilities Program (ERFP) is one of several program elements within the Energy Commission's Renewable Energy Program.

The purpose of the Existing Renewable Facilities Program (ERFP) is to allocate state funds to increase the competitiveness of existing (operational on or prior to September 26, 1996) in-state renewable generating facilities. For the purpose of the ERFP, self-sustainability refers to the ability of these facilities to continue operation without public funding by no later than December 31, 2011. The ERFP aims also to secure the environmental, economic and reliability benefits these facilities provide.

From 1998 to 2006, the Energy Commission set target prices and production incentive caps based on the facility's technology. Pursuant to new legislation (Senate Bill 1250 [Perata, Chapter 512, Statues of 2006] PDF file), the Energy Commission is now required to evaluate and consider each existing renewable facility on an individual case-by-case basis. Facilities receive funding based on production incentives (cent(s) per kilowatt hour). A target price and incentive cap are assigned to each facility based on need. If the market price for energy of a facility drops below the target price, then the Energy Commission will incentivize the facility for each kilowatt hour generated up to a maximum incentive cap.

A hypothetical example can illustrate how incentives are paid from the ERFP. For this example, assume that the Energy Commission determined that a facility has a 6-cent per kilowatt hour (kWh) target price and a 1.5 cents/kWh cap. If the market price for the facility drops to 5-cents/kWh in January, the facility would receive 1.0-cent per kWh from the ERFP for generation produced in January (5-cent/kWh market price plus one-cent/kWh incentive payment to bring the revenue stream up to the 6-cent/kWh target price). To continue the illustrative example, if the market price dropped to 4 cents/kWh in February, then the ERFP would pay 1.5 cents/kWh. Thus, in February, the facility would receive the maximum 1.5-cent per kWh cap from the ERFP plus 4-cents/kWh from the market, for a total of 5.5-cents/kWh.

ERFP eligible technologies include:

  1. Solid-fuel biomass
  2. Solar thermal electric
  3. Wind power (due to the current market climate, these facilities do not require Energy Commission funding at this time).

This program appropriates 20% of deposited funds into the Renewable Resource Trust Fund per Senate Bill 1036 [Perata, Chapter 685, Statutes of 2007 - (PDF file)]. It is estimated that approximately $75 million would be allocated to the ERFP for calendar years 2007 through 2011.

For more information regarding the Existing Renewable Facilities Program, please refer to the Guidebook or contact:

Garry O'Neill
Phone: 916-651-0961
E-mail: goneill@energy.state.ca.us