Archive for the ‘Washington, DC’ Category

RPS Evolving: States Take On U.S. Climate Goals

Posted April 19th, 2017 by SRECTrade.

This article by Allyson Browne was originally published in the American Bar Association’s Natural Resources & Environment Spring 2017 Issue: Science & The Law. It provides an in-depth look into how states across the U.S. are carrying the country’s torch towards Paris pledges with impactful RPS programs. In addition, the article breaks down the Clean Power Plan to illustrate how states could evaluate and implement similar obligations in harmony with existing RPS policies. These state actions will be increasingly important as the EPA endeavors to review the Clean Power Plan under President Trump’s recent Executive Order

As the Clean Power Plan (CPP) undergoes judicial review and faces a likely unsupportive Trump administration on the federal stage, states across the country are bringing their renewable portfolio standards (RPS) back to the top of their legislative agendas. Although the CPP is not the primary driver of today’s RPS reformation, its future will undoubtedly impact the future of RPS policies across the country, if not cause an RPS revolution—one way or the other. Historically, federal policies, including the federal production tax credit and the investment tax credit, have served primarily to support RPS programs and renewables deployment. Moreover, the Federal Energy Regulatory Commission’s (FERC) regulation of the wholesale electricity market has increased competition in the renewables sector by reducing barriers to project development and market participation, particularly with respect to requirements placed upon electricity suppliers and utility companies for renewables integration. Examples of such regulation are FERC Order 2003, Standardization of Generator Interconnection Agreements and Procedures (issued July 24, 2003), and FERC Order 764, Integration of Variable Energy Resources (issued June 22, 2012). As states look beyond their RPS target years and goals, the CPP has the ability to influence RPS program design much more heavily than did its federal predecessors. The CPP could prompt states to more closely align renewable energy goals with emissions reduction goals, thereby minimizing legislative and regulatory overlap and enabling states—and the nation as a whole—to recognize the maximum benefits of these broader climate change policies. But this is not to say that RPS programs will weaken if the CPP is struck down. Conceivably, the rejection of the CPP could lead to a great awakening of state leadership in our clean energy and climate future.

Renewables technology has progressed significantly since the first RPS was enacted in Iowa in 1983. Iowa Code § 476.41, et seq. And RPS programs, which require retail electricity suppliers to supply a minimum percentage or amount of their retail load with eligible sources of renewable energy, are constantly playing catch-up to these ever-evolving market dynamics. Technological innovations and the diversification of financial products have driven down project costs and broadened accessibility. States have provided incentives such as rebates or net metering credits. Project developers and service providers have adapted to meet the varied conditions of their markets. The result is a diverse portfolio of U.S. RPS policies, as states across the country have designed, implemented, revised, frozen, annulled, or otherwise modified their individual RPS programs as the renewables sector has matured over the course of the past 33 years.

Today, 29 states and the District of Columbia have compliance RPS programs. Altogether, the obligations apply to 55 percent of total U.S. retail electricity sales. See Galen L. Barbose, U.S. Renewables Portfolio Standards: 2016 Annual Status Report, Lawrence Berkeley National Laboratory No. 1005057 (April 2016). And these figures do not include states with voluntary renewable energy goals, such as North Dakota, Utah, and Virginia. See Jocelyn Durkay, State Renewable Portfolio Standards and Goals, Nat’l Conf. of State Legislatures (Dec. 28, 2016).

Although most RPS programs share common elements (such as imposing penalties for lack of compliance and utilizing some form of tradable renewable energy credit (REC) to track compliance), no two states share an identical RPS. States differentiate their RPS policies with unique targets and time frames, entities obligated and exemptions, eligibility rules and definitions, carve-outs, contracting or procurement requirements, and the use of cost caps and floors. Barbose, supra. This differentiation has empowered states to design programs that best fit their needs, market dynamics, and renewables goals. Modifications can be made when and where the barrier to entry is too high, or if the RPS imposes exorbitant costs on ratepayers. Consequently, the majority of states with RPS have hit their targets, with 94 percent achievement in 2013 and 95 percent achievement in 2014. Id.

While few new RPS policies have been enacted in recent years, states continue to modify existing policies in response to changing market conditions, program success and end-dates, and federal policies. As states begin to approach their target years or achieve (or exceed) target goals, states are evaluating whether and how to extend targets into the future. Under currently enacted laws, 20 states will reach the terminal year of their RPS by 2026. Id.

Recent legislative activity evidences this period of reformation. State legislatures have introduced and enacted more than 200 RPS-related bills since the beginning of 2015. See EQ Research, available at http://eq-research.com/. Most notable are the five jurisdictions (California, Oregon, New York, Vermont, and D.C.) that have adopted policies requiring at least 50 percent renewables, and Hawaii—the first U.S. state to establish a 100 percent RPS goal. Id. In addition to extending and expanding RPS time frames and goals, states have modified RPS programs by introducing resource-specific or distributed generation carve-outs, refining resource eligibility rules and definitions, and relaxing geographic preferences or restrictions. Barbose, supra.

As we approach common terminal years in 2020 and 2025, we are likely to see continued legislative and gubernatorial action on RPS programs and renewables goals. But approaching targets are not the only reason why states are revisiting and revising their RPS policies. Endogenous factors, including compliance costs, legal challenges, and other state- and local-level market and policy conditions are the primary internal drivers of RPS reevaluation. On the federal front, continued FERC regulation and the impending decision on CPP are making states rethink—and redesign—RPS policies to ensure continued compliance with federal law. Even before CPP leaves the bench, some states are planning ahead to ensure that their RPS programs will support their CPP-compliance programs. Pennsylvania, for instance, is already designing its CPP state plan, undeterred by the U.S. Supreme Court’s February 2016 decision granting a stay on the CPP pending the resolution of legal challenges. See Susan Phillips, Wolf says PA will move forward on Clean Power Plan, StateImpact Pennsylvania (Feb. 10, 2016); and Chamber of Commerce v. EPA, 136 S. Ct. 999 (2016) (order in pending case).

The CPP is the first-ever national standard aimed toward reducing carbon pollution from power plants, the nation’s largest source of emissions. See EPA, Fact Sheet: Overview of the Clean Power Plan (2015). Recognizing that fossil fuels will “continue to be a critical component of America’s energy future,” the EPA put forth the CPP to ensure that fossil fuel-fired power plants operate “more cleanly and efficiently, while expanding the capacity for zero- and low-emitting power sources.” Id. The CPP establishes interim and final carbon dioxide (CO2) emission performance rates for two subcategories of fossil-fuel-fired electric generating units (EGUs): fossil fuel-fired electric steam generating units (i.e., coal- and oil-fired power plants) and natural gas-fired combined cycle generating units. Id.

Under the CPP, states and utilities can implement the standards and meet these goals through one of three methods: a rate-based state goal measured in pounds per megawatt hour (MWh), a mass-based state goal measured in total short tons of CO2, or a mass-based state goal with a new source complement measured in total short tons of CO2, also known as a state measures plan. States need to develop and implement plans which, when combined with other state or regional initiatives, will ensure compliance with the CO2 emissions performance rates over the 2022–2029 compliance period, and with the final CO2 emissions performance rates, rate-based goals or mass-based goals by 2030 (or later, if the CPP is further delayed). The EPA estimates that the pollution reductions required by the CPP will yield climate benefits of $20 billion, health benefits of $14–34 billion, and net benefits of $26–45 billion. Id. Complementary or additive RPS programs will amplify these benefits by incentivizing additional renewable deployment, implementing stronger energy efficiency standards, and more.

Under any of the three methods, compliance will be tracked via emissions trading. See Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662 (Oct. 23, 2015) (to be codified at 40 C.F.R. Part 60). How an existing RPS and its tracking mechanism will interplay with a state’s CPP plan and its emissions trading will depend on the state’s CPP compliance path. Under a rate-based state goal, renewable energy facilities, energy efficiency units, new nuclear facilities, or performance upgrades at existing nuclear, hydro, and natural gas combined cycle power plants will produce emission rate credits (ERCs), which represent one MWh of zero-emission generation. These ERCs will be added to the denominator of the pounds per MWh until the EGU (either individually or on a state average basis) satisfies the required rate.

A state with an existing RPS that uses RECs to track compliance will need to decide whether and how ERCs and RECs will be issued, tracked, and retired together or separately. In its guidelines, the EPA clarifies that ERCs were intended to be unique and separate from RECs, and that a single generating unit could produce both an ERC and a REC for each MWh generated where eligibility overlap exists. But in practice, managing ERCs and RECs in the same compliance universe will be no easy undertaking—there will be issues with double-counting, existing forward contracts, and whether a facility can still claim its renewable attributes if it keeps its RECs, but trades away its ERCs. Id.

Emissions trading under a mass-based state goal is much more straightforward—states will be issued emissions allowances, which can be auctioned (traded) or given away. Compliance will be determined solely on total tons of CO2 emitted. As designed, there is no direct relationship between a state’s CPP plan and its RPS; rather, the two plans would exist contemporaneously. Id.

States with RPS, energy efficiency standards, and other related programs are best suited for a mass-based state measures plan. The state measures plan allows a state to leverage its existing policies, programs, and compliance mechanisms to meet the standards imposed by the CPP. And, rather than being the primary enforcement mechanism, the mass-based emissions standard acts as a federally enforceable backstop that only kicks in if the state measures fail to achieve the required reductions. There are no ERCs under this plan, and states can continue to utilize RECs to track RPS compliance, focusing CPP compliance efforts on bolstering their existing RPS and other programs instead of establishing entirely new programs and tracking tools. Id.

It is evident that the EPA carefully crafted the CPP to exist in harmony with state RPS programs and to provide a path for all states to reduce overall emissions while incentivizing renewable energy development—including those already on the right track. And although the CPP or similar federal policies would be instrumental in accelerating America’s timetable for achieving its Paris Agreement goals, states have proven willing to push for progress on their own. Now more than ever, it is imperative that states renew their commitments to renewable energy, promoting a sustainable renewables industry that supports continued job creation, grid resiliency efforts, and energy independence. As we enter into the era of Trump—and with it, an uncertain federal position on climate policy—states will take hold of the power to determine and define the nation’s stance for renewable energy and against the threat of climate change. Will we stand united?

Allyson Browne, Director of Regulatory Affairs & General Counsel

© 2017. Published in Natural Resources & Environment, Vol. 31, No. 4, Spring 2017, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

D.C. RPS Bill Published in Register

Posted August 23rd, 2016 by SRECTrade.

Following Mayor Bowser’s signature last month, the Renewable Portfolio Standard Expansion Amendment Act of 2016 is now published in the D.C. Register.

A21-466 was published in Volume 63, Number 33 of the District of Columbia Register on August 5, 2016 under the Actions of the Council of the District of Columbia. The PDF of the issue is available here.

As enacted, B21-0560 raises the renewable portfolio and solar requirements to 50% and 5% by the year 2032, respectively, and adds waste heat from combined and sanitary sewage systems and effluence from wastewater treatment to the list of Tier 1 renewable sources. In addition, the bill increases financial penalties for electricity suppliers who fail to comply with the annual renewable energy portfolio standard requirements. This financial penalty is known as the Alternative Compliance Payment, or ACP. Finally, the bill establishes a program within the Department of Energy and the Environment to assist low-income homeowners with installing solar systems on their homes.

Mayor Bowser Signs D.C. RPS Bill

Posted July 26th, 2016 by SRECTrade.

D.C. Mayor Muriel E. Bowser hosted a press conference yesterday to sign the Renewable Portfolio Standard Expansion Act of 2016. As enacted, B21-0560 raises the renewable portfolio and solar requirements to 50% and 5% by the year 2032, respectively, and adds waste heat from combined and sanitary sewage systems and effluence from wastewater treatment to the list of Tier 1 renewable sources. In addition, the bill increases financial penalties for electricity suppliers who fail to comply with the annual renewable energy portfolio standard requirements. This financial penalty is known as the Alternative Compliance Payment, or ACP. Finally, the bill establishes a program within the Department of Energy and the Environment to assist low-income homeowners with installing solar systems on their homes.

Councilmember Cheh introduced the bill earlier this year, and the Council unanimously passed the bill in late June. The expanded RPS not only increases access to clean energy for D.C. residents, but establishes a long-term pipeline for green jobs and businesses by raising demand for Tier 1 RECs and SRECs. The increased demand will incentivize the continued growth of D.C.’s solar industry, which has grown by 170% over the last year. The chart below summarizes the new RPS and Solar Carve-out schedule by requirement year.
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The total RPS requirement must be met by Tier 1 Renewable Sources, which includes the new sources added by the Expansion Act. In 2032 and thereafter, the District’s RPS will be set at 50% with a 5% solar carve-out. Please note that, although the SACP Schedule is changing for the 2017+ years from the current schedule, the RPS schedule for years 2017-2023 is unchanged under the Expansion Act. It is not until years 2024 and onward that the RPS requirements are changed by this new law.

Mayor Bowser is confident that the RPS Expansion Act will enable the District’s diverse populations to benefit from solar in a meaningful way. Speaking at her press conference, she said that the District “…will serve 100,000 low-income households by 2032—that’s more than 6,000 homes per year, and we’ll reduce their electricity bills by 50%, as a result. We’ll be creating at least 100 green  jobs in the first year with that number growing every year through 2032. That means reducing carbon emissions, lowering residents’ energy bills, and providing pathways to the middle class through the burgeoning marketplace of clean energy – all at the same time.”

The newly signed legislation is slated to become effective after the Congressional review period.

D.C. RPS Bill Passes Unanimously in Second Reading before the Council

Posted June 28th, 2016 by SRECTrade.

Today, the D.C. Council unanimously passed B21-0650, the Renewable Portfolio Standard Expansion Amendment Act of 2016, on its second reading. Now, the bill will pass to Mayor Bowser, who will have ten days to approve or veto the bill. Following the Mayor’s action, the bill will pass to Congress for consideration for thirty days.

The RPS Expansion Amendment Act of 2016 will increase the RPS and solar carve-out requirements to 50 percent and 5 percent by the year 2032, respectively, and increase alternative compliance payments (financial penalties) for electricity suppliers who fail to comply with RPS requirements. The raised RPS will increase demand for Tier 1 RECs and solar-carve out SRECs. In addition, the bill adds new resources to the list of Tier 1 renewable sources and establishes a program within the Department of Energy and the Environment to assist low-income homeowners with installing solar systems on their homes.

You can read our prior posts on the RPS bill here, and subscribe to our blog to stay up to date on the bill’s progress with the Mayor and Congress.

D.C. RPS Bill Passes in First Reading before the Council

Posted June 7th, 2016 by SRECTrade.

Today, the D.C. Council held its first hearing on B21-0650, the Renewable Portfolio Standard Expansion Amendment Act of 2016. The bill, which was introduced earlier this year, passed unanimously in the first hearing, but must still pass a second hearing in July, and a Council vote as early as mid-July, before it passes to the Mayor for signature.

The RPS Expansion Amendment Act of 2016 will increase the RPS and solar carve-out requirements to 50 percent and 5 percent by the year 2032, respectively, and increase alternative compliance payments (financial penalties) for electricity suppliers who fail to comply with RPS requirements.

You can read our prior post on the RPS bill here, and subscribe to our blog to stay up to date on the bill’s progress with the Council and Mayor.

D.C. Council Committee Holds Public Hearing on RPS Expansion Bill

Posted May 31st, 2016 by SRECTrade.

On May 23rd, Councilmember Cheh held a public hearing on three important energy and climate change bills currently under review by the Council: B21-0650, the Renewable Portfolio Standard Expansion Amendment Act of 2016; B21-0412, the Solar Energy Amendment Act of 2015; and B21-0369, the Commission on Climate Change and Resiliency Establishment Act. The Renewable Portfolio Standard Expansion Amendment Act of 2016, which was introduced to the Council in March, will increase the RPS and solar carve-out requirements to 50 percent and 5 percent by the year 2032, respectively, and increase alternative compliance payments (financial penalties) for electricity suppliers who fail to comply with RPS requirements. Additional goals of B21-0650, in conjunction with the goals of B21-0412 and B21-0369, aim to facilitate the continued growth of solar and other renewables in the District. Currently, the bills are under review by the Council’s Committee on Transportation and the Environment, which will consider the public comments and written testimony submitted in response to the Public Hearing.

With the public comment period closed, the Committee will move to hold a mark-up meeting as soon as June 1st to consider possible amendments to B21-0650. Following this meeting, the bill should be presented for a hearing on or around June 7th, with a second hearing in July, and a vote as early as mid-July.

For more information on the District of Columbia SREC market, please visit our D.C. market page.

SRECTrade will continue to provide updates on the status of the D.C. RPS bill as it progresses with the Council.

District of Columbia RPS Bill under review by D.C. Council Committee

Posted March 23rd, 2016 by SRECTrade.

On March 1st, 2016, D.C. Councilmember Cheh introduced the Renewable Portfolio Standard Expansion Amendment Act of 2016 (B21-0650) for legislative consideration before the Council of the District of Columbia. On this date, the Renewable Portfolio Standard (RPS) bill was referred to the Committee on Transportation and the Environment, where it remains under review to date. As introduced by Councilmember Cheh, this bill would serve to accomplish four goals:

  • Expand the list of Tier 1 renewable energy sources by incorporating (1) waste heat from combined and sanitary sewage systems and (2) effluence from wastewater treatment;
  • Increase the RPS and solar carve-out requirements to 50 percent and 5 percent by the year 2032, respectively;
  • Increase alternative compliance payments (financial penalties) for electricity suppliers who fail to comply with RPS requirements; and
  • Establish a Department of Energy and the Environment program to help low-income homeowners install solar systems on their homes.

Should the bill be enacted, the combination of increasing the overall RPS and solar carve-out requirements and raising the alternative compliance payments (ACPs) will increase market demand for D.C. solar renewable energy credits (SRECs). Increased demand for SRECs will provide price support for SREC values in the District and will encourage additional growth and adoption of solar in the nation’s capital.

For more information on the District of Columbia SREC market, please visit our D.C. market page.

SRECTrade will continue to provide updates on the status of the D.C. RPS bill as it progresses with the Council.

Congress Passes Extension of Investment Tax Credit (ITC) for Solar

Posted December 18th, 2015 by SRECTrade.

Earlier today, Congress passed the FY 2016 Omnibus Appropriations bill, which includes tax extenders and $1.1 trillion in government funding. The spending package includes a pivotal extension of the federal investment tax credit (ITC) for solar energy. The bill is the result of a bicameral and bipartisan compromise, by which Congressional Democrats pursued the extension of this federal subsidy as partial compensation for lifting the ban on US crude oil exports. At first, Democrats believed that the bill would be a loss for the environment, but Democratic leaders urged their party members to recognize the net benefits of extending support for renewable energy development.

“May the force be with you,” quipped Senator Dianne Feinstein (D-CA), encouraging her fellow Senators to vote in favor of the package just hours after the House passed the bill. The bill passed both chambers of Congress by impressive majorities. The House approved by a 316 to 113 vote, and the Senate approved by a 65 to 33 vote.

While existing law provided the 30% solar ITC through the end of 2016, the extension guarantees 30% through 2019, declining to 26% in 2020 and 22% in 2021. After 2021, the 10% credit for Section 48 (commercial) projects will remain in place, per existing law. However, the bill includes “commence-construction” provisions that allow projects to qualify if they come on-line by the end of 2023. These extensions will help states to meet their Renewable Portfolio Standard and other renewable energy goals by helping project owners offset the cost of investing in renewable energy. The federal ITC, coupled with additional incentives, such as Solar Renewable Energy Credits (SRECs), encourages investment in renewable technologies across the country.

The ITC extension will undoubtedly have a significant impact on the solar industry. Experts project that the extension will increase solar installations by 54 percent (compared to a non-extension scenario) and create a 20 GW annual solar market through 2020. The extension is expected to impact utility-scale solar the most, where installations could increase by as much as 73% through 2020. Comparatively, residential installations are expected to experience a 35% growth, and commercial installations are expected to grow by 51%. This anticipated development will spur economic growth and an anticipated incremental investment of $40 billion in the solar industry.

After proposing an extension of the ITC in his 2016 budget earlier this year, the passage of this bill reinforces President Obama’s inaugural commitment to addressing climate change and protecting the planet for future generations. The bill also follows the historic adoption of the Paris Climate Agreement, which was made at COP21 in Paris earlier this month. Although the Agreement still needs to be adopted by the U.S. Government, the President is resolute that the Agreement will survive Republican opposition and become law. In a statement following COP21, President Obama said that “this moment can be a turning point for the world[,]” and this bill is certainly a step in the right direction for America’s commitment to the new international goal.

DC and MD SREC Market Update Webinar Posted

Posted May 8th, 2014 by SRECTrade.

SRECTrade hosted a webinar on Tuesday, 5/6/2014, outlining the DC and Maryland SREC markets. A recording of the webinar is available by clicking the image below.

A link to a PDF of the presentation can be found here.

DC and MD SREC Market Update: Tuesday, 5/6 @ 2 pm ET

Posted April 28th, 2014 by SRECTrade.

SRECTrade will host a webinar covering the latest pricing and supply numbers for the Washington, DC and Maryland SREC markets.

The webinar is open to the public and will be held on Tuesday, 5/6/14, at 2 pm ET.

Click here to register

DC MD Webinar Screen