The Renewable Auction Mechanism (RAM), approved by the California Public Utilities Commission (CPUC) in December 2010, is expected to result in 1,299 megawatts (MW) of new distributed generation over the course of two years. RAM is designed to streamline the procurement process for distributed generation projects between 3 MW and 20 MW* in capacity while ensuring the lowest costs for ratepayers.
The RAM is a reverse auction which will occur twice annually for each of the three investor-owned utilities in the state. Each utility is responsible for procuring their proportionate share of the 1,299 MW total based on their relative electricity sales. Each of the proportions will be subdivided equally across the four auctions to be held by each utility as demonstrated by the table below.
|Utility||Total Procurement Requirement
||Procurement per Auction|
|Southern California Edison||723.4 MW||170.8 MW|
|Pacific Gas and Electric||420.9 MW||105.2 MW|
|San Diego Gas and Electric||80.7 MW||20.2 MW|
Each bid will be screened by the utility for viability and then selected based on price, starting with the least cost project, until the utility reaches their MW limit for that auction. Winning bids will be given a standard contract from the utility. The CPUC can then approve executed contracts through a Tier 2 advice letter. The third RAM auction closed on December 21, 2012.
* ''In May 2012 the CPUC adopted changes to the statewide feed-in tariff (FIT) program. Among other changes, the Decision increased the system capacity limit for the FIT to 3 megawatts (MW), and provided a pricing mechanism derived from the contract prices awarded to participants in the RAM program. To prevent gaming between the two programs, the Decision stipulated that systems with a nameplate rating of 3 MW or smaller that meet other eligibility requirements for the FIT are prohibited from participating in the RAM program. Instead, these systems may only participate in the FIT.''