California’s Governor Jerry Brown on Tuesday signed into law SBX1-2, a law that increases the state’s renewable portfolio standard (RPS) target from 20% in 2010 to 33% by 2020—the most aggressive goal in the nation. In his signing message, Brown said he would pursue even more far-reaching targets, pushing the RPS to 40% in the “near future.”

The law was effected as U.S. Sens. Tom Udall (D-N.M.) and Mark Udall (D-Colo.) introduced a federal renewable energy standard bill. If passed, could require utilities to generate 25% of their power from eligible sources by 2025.

“While reaching a 33 percent renewables portfolio standard will be an important milestone, it is really just a starting point—a floor, not a ceiling,” Gov. Brown said on Tuesday. “Our state has enormous renewable resource potential. I would like to see us pursue even more far-reaching targets. With the amount of renewable resources coming on-line, and prices dropping, I think 40 percent, at reasonable cost, is well within our grasp in the near future.”

The previous 20% by 2010 RPS (with a three-year grace period) applied to investor-owned utilities such as Southern California Edison (SCE), Pacific Gas & Electric (PG&E), and San Diego Gas & Electric (SDG&E).

In March 2011 compliance filings, the utilities showed that they served 17.9% of their loads with renewables, up from 15.4% in 2009, state regulators reported. PG&E served 17.7% of its 2010 load with eligible renewable energy, SCE with 19.4%, and SDG&E with 11.9%.

But the law signed Tuesday will also apply to publicly owned utilities (POUs), including municipal utilities such as the Los Angeles Department of Water and Power and the Sacramento Municipal Utility District. Implementation of the 33% RPS for POUs would be left to governing boards, though the California Energy Commission would refer any violations to the California Air Resources Board for penalties.

The law requires electric utilities to reach the 33% RPS in three compliance periods. By December 31, 2013, renewable energy must equal 20% of retail sales; by December 2016, it must equal to 25% of sales, and by 2020, it must equal 33% of sales and maintain that percentage in ensuing years. The new mandate also requires utilities to supply some power from distributed generation.

According to law firm Stoel Rives LLP, another major change from the 20% RPS law is that investor-owned utilities can apply to the California Public Utilities Commission (CPUC) for permission to build, own, and operate their own renewable generation for RPS compliance—but only enough to supply 8.25% of anticipated retail sales by December 2020. The CPUC must find, before approval of applications, that the project uses a “viable technology at a reasonable cost.” Another stipulation is that the technology of choice should provide a “comparable or superior value to ratepayers when compared to then recent contracts for generation.”

The law firm concludes that implementation of the new law would have to be worked out at various California regulatory agencies, including the CPUC and the California Energy Commission. “The legislation will likely spawn numerous regulatory proceedings as the various regulatory agencies struggle to come to grips with the new RPS mandate,” it said.

Sources: POWERnews, Gov. Jerry Brown, Stoel Rives, CPUC