If California adopts requirements recommended last month by state agencies to generate at least 33% of its electricity from renewable sources by 2020, it may cost the state $60 billion, the California Public Utilities Commission (CPUC) said in a report released Thursday.

The regulatory agency, which had advocated the 33% renewable standard along with the California Energy Commission, assessed major challenges and identified potential solutions in order to meet that target in its “Renewable Portfolio Standard Quarterly Report” (PDF).

California’s current renewable portfolio standard (RPS) requires that 20% of the state’s electricity will be generated by renewable sources by 2010—though the utilities will not meet that goal until 2013, the CPUC said.

Increasing the 2020 target to 33% would require about 40,000 GWh beyond what is needed for the 20% goal, a feat that could warrant “an infrastructure build-out on a scale and timeline perhaps unparalleled anywhere in the world,” the report said. The CPUC estimated that by 2020 the state would have to build seven new major transmission lines, at a cost of $6.1 billion, to accommodate 15,900 MW of new capacity.

“Reaching a 33% target will require procurement of more expensive renewables—preliminary analysis indicates that such a target may require a state investment of about $60bn in generation and transmission from 2010 to 2020,” the report said.

But, transmission planning, permitting, and construction of renewable generation facilities—all lengthy processes—could inhibit timely delivery of renewable energy, the CPUC found. In order to meet the 33% target, the state would also need to determine the impact of integrating large amounts of intermittent renewable energy on the grid. A process to evaluate the rising costs of renewable projects would also be necessary, and the state would need to address project development barriers, such as financing and equipment availability.

The CPUC’s report did not say when and with which efforts the agency would push the 33% target. Since California’s current RPS statute prevents the CPUC from requiring investor-owned utilities to procure more than 20% of their electricity from renewable sources, legislation is needed to codify the 33% goal.

The CPUC’s report was issued only days after nearly two-thirds of California voters defeated a campaign that would have created the country’s most aggressive renewable energy mandate. If it had passed, Proposition 7 would have required utilities to increase their production of renewable power by 2% every year so that by 2025, 50% of their electricity generation was from renewable sources.

The campaign had been fiercely opposed by the odd coalition of environmentalists and large power utilities, the San Francisco Chronicle reported. The groups criticized the law as being so badly written that it would actually slow the development of renewable power, not accelerate it.

According to the Chronicle, the state’s utilities were the largest contributors to the $29.8 million campaign against Proposition 7, with San Francisco’s Pacific Gas and Electric Co. spending $13.9 million to defeat the measure.

Sources: California Public Utilities Commission, San Francisco Chronicle