Posts Tagged ‘Compliance Obligation’

DOER Announces Final 2017 Compliance Obligation and Minimum Standard

Posted September 1st, 2016 by SRECTrade.

On Wednesday, August 31, the Massachusetts Department of Energy Resources (DOER) announced the final 2017 Solar Carve-out (SREC-I) and Solar Carve-out II (SREC-II) Compliance Obligations and Minimum Standards. This announcement follows the results of the SREC-I and SREC-II Solar Credit Clearinghouse Auctions.

Notably, this announcement differs greatly from the preliminary announcement in July. In particular, the DOER announced that the final SREC-II Minimum Standard for load under contracts signed prior to May 8, 2016 is 2.0197% (969,635 MWhs), reduced from 2.2960% (1,102,311 MWhs).

Solar Carve-out (SREC-I)

The DOER has determined that the 2017 Compliance Obligation for the SREC-I program will be 783,183 MWh and that the Minimum Standard will be 1.6313%. The 2017 Minimum Standard for load under contracts signed before June 28, 2013 will be 0.9861%. The Determination of the CY 2017 Total Compliance Obligation and Minimum Standard, published by the DOER, outlines how this Minimum Standard was calculated.

SREC-I Min Std

Solar Carve-out II (SREC-II)

The DOER has also calculated the 2017 Compliance Obligation and Minimum Standard for the SREC-II program, which are 1,374,406 MWh and 2.8628%, respectively. The DOER outlined how this preliminary Minimum Standard was determined in its “CY 2017 Calculation of Minimum Standard Guideline”.

SREC-II Min Std

Since all Retail Electricity Suppliers are exempt from additional obligations resulting from the expansion of the SREC-II Program Capacity Cap, the DOER established a baseline Compliance Obligation and Minimum Standard for load under contracts signed on or prior to May 7, 2016. The DOER’s calculation of the Final 2017 Compliance Obligation and Minimum Standard were similar to its calculation of the Preliminary 2017 Compliance Obligation and Minimum Standard (detailed here), but used 825 MW as the capacity that it expects would have been in operation had the SREC-II Program Capacity Cap not been expanded. The DOER used the 825 MW value to reflect its estimate of the generation facilities that would be qualified and operational by the end of the year – a significant reduction from the original 947 MW projection.

Using the 825 MW estimate, the DOER determined a total baseline Compliance Obligation of 969,635 MWhs and a Minimum Standard of 2.0197%. These two figures are significantly less than their counterparts from the preliminary 2017 Compliance Obligation and Minimum Standard, which were 1,102,311 MWhs and 2.2960%, respectively.

SREC-II Obligation Chart

The latest Solar Carve-Out II Qualified Units report (updated on August 25) identified nearly 575 MW of capacity as qualified and operational under the SREC-II program. Comparing the 825 MW figure that the DOER is targeting to the existing 575 MW, the market would need to more than double the Last Twelve Months (LTM) monthly average build-rate (30 MW) to reach that threshold.

For more information on the July announcement of the Preliminary 2017 Compliance Obligation, please visit our blog post on the topic.