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The California Public Utilities Commission (CPUC) has approved the program details to implement the Renewable Auction Mechanism (RAM), a new procurement method that the commission says will help lower transaction costs and promote the development of system-side renewable distributed generation projects of up to 20 MW in size.

Elements of the RAM include a standard contract (simple, non-negotiable contract that the CPUC pre-approves); project viability (the seller must meet minimum criteria to participate in the auction); market-based pricing (bids are selected on price, starting with the lowest price bid until the auction capacity cap is reached); streamlined procurement (CPUC staff can approve executed contracts through a Tier 2 advice letter); and transparency (interconnection maps show available capacity on electrical system, annual program forums solicit program feedback, and utility reporting requirements are listed on the auction response and project development milestones of executed contracts).

The program has an interim 1,000 MW procurement target over two years and requires investor-owned utilities to hold two auctions per year. The first auction will take place in the fourth quarter.

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