California renewable energy prices fell to record lows in 2019, driven by the proliferation and falling costs of wind and solar power, the Public Utilities Commission said Monday in its annual report to the State Legislature.

Renewable portfolio standard contract prices dropped to 2.82 cents/kWh in 2019, compared with 3.81 cents/kWh in 2018, for all RPS-eligible energy, the CPUC said in its 2020 Padilla Report. RPS contract prices dropped an average of 12.7% per year between 2007 and 2019, it said.

The state’s three large investor-owned utilities continued to pay at a far higher rate because of renewable contracts signed last decade before prices fell dramatically. In 2019, the IOUs procured renewable power at an average cost of 10.23 cents/kWh, down from 10.57/kWh in 2018. The IOUs total procurement costs fell from $5.6 billion in 2018 to $5.4 billion in 2019, the report said.

California’s RPS program requires IOUs, electric service providers and community choice aggregators to purchase a third of their retail energy from renewable sources by 2020 and 60% by 2030. The state has a goal of using all carbon-free electricity by 2045 under Senate Bill 100, passed in 2018. (See CPUC Approves Big Boost in Storage, Solar Targets.)

The IOUs and small and multi-jurisdictional utilities (SMJUs) predicted they will meet or exceed their RPS procurement obligations this year, the report said. CCAs, which make up a growing segment of load-serving entities in California, forecast a procurement shortfall but said they were seeking additional resources.

The shortfall of resources among CCAs has been an ongoing concern for policymakers. (See Calif.: CCAs, Decarbonization Pose Reliability Challenges.)

The CCAs increased their procurement of renewables by 55% to 15,500 GWh and executed the majority of new RPS contracts in 2019, the CPUC said. Their total annual RPS procurement spending increased from $555 million in 2018 to $932 million in 2019, it said.