Posts Tagged ‘RPS’

NJ Gov. Murphy Signs AB-3723 / SB-2314 Increasing State RPS

Posted May 25th, 2018 by SRECTrade.

On Wednesday, May 23rd, New Jersey Governor Phil Murphy (Dem) signed Assembly Bill 3723 (AB-3723) and Senate Bill 2314 (SB-2314), increasing the state’s Renewable Portfolio Standard (RPS) requirements. The bill establishes renewable energy goals of 21 percent by 2020, 35 percent by 2025, and 50 percent by 2030, making the New Jersey RPS one of the highest in the nation.

Notably, the state’s solar carve-out requirement is raised and accelerated to 5.1 percent of total electricity sales by EY2021 before beginning to ramp-down in 2024. The requirement ramps down in consideration of solar facilities that will be reaching the end of their 15-year SREC production eligibility term.

On the other hand, the bill lowers the solar alternative compliance payment (SACP) schedule to $268.00 in EY2019 with an additional $10.00 reduction each following year.

The bill also shortens the 15-year period that qualified solar projects can generate solar renewable energy credits (SREC) to ten years, effective for all New Jersey SREC Registration Program applications received as of the enactment date. Lastly, the bill mandates that the current SREC program be closed upon reaching the 5.1 percent target and no later than June 1, 2021. It is anticipated that a supplemental “SREC-II” program will follow shortly after the closure of the first program.

The bill also introduces other clean energy initiatives, including:

  • Community Solar: establishes the Community Solar Energy Pilot Program to allow utility customers access to solar projects that are located away from their properties, but within their utility’s service territory. The pilot program is planned to be converted to a permanent community solar program within 36 months.
  • Energy Efficiency: requires individual utilities to implement energy efficiency measures to reduce electricity usage by 2 percent and natural gas usage by 0.75 percent.
  • Energy Storage: mandates Gov. Murphy’s goal of achieving 600 MW of energy storage by 2021 and 2,000 MW by 2030.
  • Offshore Wind: establishes a goal of 3,500 MW of offshore wind by 2030 that will be supported by an offshore wind renewable energy credit (OREC) program.

Simultaneously, Gov. Murphy signed Executive Order No. 28, requiring state agencies to update the Energy Master Plan (EMP) that prepares a strategy for achieving 100 percent clean energy by January 1, 2050. The new EMP is scheduled to be finalized and published by June 1, 2019.

For more information on the bill and its passage through the New Jersey legislature, please visit our previous blog post on the topic here. SRECTrade expects to publish a detailed New Jersey supply and demand analysis reflecting this new legislation soon.

NJ Solar RPS Increase – New Jersey Assembly and Senate Pass AB-3723 / SB-2314

Posted April 13th, 2018 by SRECTrade.

On Thursday, April 12th, the New Jersey Assembly and Senate passed Assembly Bill 3723 (AB-3723) and Senate Bill 2314 (SB-2314). The bill now sits on the desk of Governor Phil Murphy (Dem) waiting to be signed, after passing the Assembly by a margin of 49-20-2 and the Senate by a margin of 29-8. The bill requires a number of action items to be carried out, including:

  • Requiring the New Jersey Board of Public Utilities to:
    • Administer an energy storage analysis
    • Advance, increase, and extend the solar carve-out schedule and reduce and extend the solar alternative compliance payment schedule
    • Introduce structural changes to the state SREC program
    • Implement energy efficiency and peak demand reduction programs
    • Implement a “Community Solar Energy Pilot Program”
    • Offer tax credits for specified offshore wind facilities
  • Requiring the Department of Labor and Workforce Development to establish job training programs for professionals in manufacturing and maintenance of offshore wind facilities

The bill requires 21% of statewide electricity sales to be derived from Class I renewable energy sources by January 1, 2020, 35% by January 1, 2025, and 50% by January 1, 2030. The cost of this requirement shall not exceed 9% of the electricity purchased by all NJ ratepayers for each energy year 2019-2021 and shall not exceed 7% in each energy year thereafter. In addition, all facilities filing SREC applications after the bill’s enactment date will be subject to a reduced SREC eligibility term of 10 years, down from 15.

No later than 180 days after the enactment of the bill, the board will implement rules to close the SREC program to new systems upon reaching the 5.1% solar carve-out target. The legislation intends to close the existing SREC program to new projects on or before June 1, 2021. Within 24 months from signing the legislation, the Board of Public Utilities will be required to conduct a study that evaluates how to modify or implement a new solar incentive program. A variety of market stakeholders will be consulted in the process to determine the next best steps forward for the NJ SREC market.

As shown below, the bill brings forward and raises the state’s solar carve-out requirements beginning with EY2019 and extends the requirements through EY2033. The requirement peaks at 5.10% in EY2021-2023 before gradually declining through EY2033. The reduction mechanic was introduced to account for solar facilities that will be reaching the end of their SREC production eligibility term.

The bill also reduces the solar alternative compliance payment (SACP) beginning with EY2019 and extends the SACP schedule through EY2033. The SACP level drops to $268 in EY2019 and then gradually decreases by $10 each year following.

For more information on the historical progress of the bill, please view our previous blog post on the topic here. SRECTrade will be publishing an updated New Jersey Supply and Demand Analysis to its blog shortly in consideration of this bill.

House Economic Matters Subcommittee Votes Against Maryland RPS Bill

Posted March 15th, 2018 by SRECTrade.

On Wednesday, March 14th, the Maryland House Economic Matters subcommittee voted against the Clean Energy Jobs Act of 2018 (HB 1453), a bill that would have expanded the state’s Renewable Portfolio Standard (RPS). Among other measures, the bill aimed to increase the state’s RPS solar requirement to 14.5% by 2030 and its total RPS requirement to 50% by 2030; at present, the state’s RPS solar requirement is 2.5% by 2020 and total RPS requirement is 25% by 2020. A majority of the Public Utilities Subcommittee voted for an “unfavorable motion” on the bill.

The bill’s lead sponsor, House Majority Leader C. William Frick (Dem), announced the night of the 14th that he was withdrawing the bill before a full vote of the Economic Matters Committee. The 100% Clean Renewable Energy Equity Act of 2018 (HB 878), a bill designed to raise the state’s RPS to 100 percent by 2035, was also withdrawn on the 14th.

The Clean Energy Jobs Act of 2018 was supported by more than 660 faith groups, environmental organizations, unions, and civic leaders. Proponents of the bill are looking to pass the bill in 2019 after making it an important election issue this year.

For our latest Maryland SREC Market update click here. For more information on the Maryland Clean Energy Jobs Act’s proposal, please view our previous blog post on the topic here.

New Jersey Senate Passes Concurrence on S-2276

Posted January 10th, 2018 by SRECTrade.

Update: Governor Chris Christie pocket vetoed Senate Bill 2276 (S-2276) when he left office on January 16, 2018.

Please note that the original blog post was slightly revised on January 11, 2018.

On Monday, January 8th, the New Jersey Senate passed the amended Senate Bill 2276 (S-2276), following the Assembly Telecommunications and Utilities Committee’s amendments from mid-2017. The bill now rests on the desk of outgoing Governor Chris Christie (R) for a decision. Although it appears likely that Gov. Christie will pocket veto the legislation when his term ends on Tuesday, January 16th, Governor-Elect Phil Murphy (D) has his eyes set on New Jersey accomplishing 100 percent clean energy by 2050 and leading New Jersey to regain its status as a national leader in solar.

The bill passed by a considerable margin (26-8), demonstrating a strong consensus for support of the Garden State’s renewable energy industry, and also sending an important message to Governor-Elect Murphy regarding the urgency of this legislation.

If signed into law, the bill would establish the New Jersey Solar Energy Study Commission and increase the state’s solar renewable energy portfolio standard. The commission is intended to analyze all aspects of New Jersey’s solar industry and report findings and recommendations to the Governor and Legislature, specifically:

  1. As to whether New Jersey’s solar renewable portfolio standard (RPS) should be modified and extended through a prescribed period, but at least through energy year 2031;
  2. The current trends in utility interconnection study processes and costs; and
  3. The status and future of the state’s solar renewable energy credit market

In the bill, the Legislature speculated that New Jersey’s current statutory solar RPS could result in the loss of over 120 MW of solar per year through 2021, over $240 million per year in lost solar projects, and 5,000 clean energy jobs per year. To ensure the continued success of New Jersey’s solar industry, it is critical that the state pass both interim and future long-term measures to stabilize the industry and promote long-term, sustainable growth.

SRECTrade will continue to provide updates on this and other New Jersey legislative efforts.

SRECTrade to Speak at GTM U.S. Power & Renewables Summit – November 8, 2017

Posted November 6th, 2017 by SRECTrade.

On Wednesday, November 8, SRECTrade’s Director of Regulatory Affairs, Allyson Browne, will be speaking on a panel at GTM’s U.S. Power & Renewables Summit in Austin, Texas.

Allyson will join moderator Colin Smith, Analyst, Solar at GTM Research and fellow panelists Terry Grant, Managing Director at Marathon Capital, and Peter Mathews, General Manager, North America at Solar Edge, to discuss solar cost trends and long-term market implications. Allyson will focus on the interplay between the cost per watt of solar (including the impact of possible tariffs resulting from the Section 201 trade case), federal tax incentives like the ITC, and solar renewable energy credit markets, and how these cost and revenue streams contribute to development (or lack thereof) in the residential and C&I sectors.

The panel, How Low Can They Go: What is Driving Down Solar Cost and What are Longer-Term Market Implications?, will be held at 11:20 am on Wednesday morning. See the full agenda here.

SRECTrade at the Environmental Markets Association – Chicago Round Table: Illinois RPS Update

Posted July 7th, 2017 by SRECTrade.

On June 21, 2017, members of the SRECTrade team attended the Environmental Markets Association (EMA) round table event in Chicago.   The event featured presentations and discussions on a variety of environmental issues and new developments in Illinois environmental markets.   SRECTrade’s Manager of Business Development and Operations, Tom MacKenty was invited to speak about the new IL RPS and upcoming Adjustable Block Program.

Tom’s full presentation can be viewed HERE

While there are many details about the RPS and Adjustable Block Program forthcoming, SRECTrade has been actively monitoring the progress and posting information as it has become available.  A recent SRECTrade blog post with an outline of the program can be found HERE.

We will continue to provide updates as the rule making proceeds. As always, please feel free to reach out to us if you have specific questions.

Market Implications of Recent D.C. RPS Bill

Posted June 9th, 2017 by SRECTrade.

SREC market structure is primarily determined by two major policy levers: Renewable Portfolio Standards (RPS) and the Alternative Compliance Payment (ACP). RPS schedules determine the amount of energy coming from various renewable generation sources, solar included. ACP schedules set the maximum possible price that credits such as SRECs can reach in the market. When a state adjusts the RPS or ACP, market participants on both the demand and supply sides of the SREC market need to adapt to the new environment defined by these two factors. This transition often takes time to complete and can create market instability and uncertainty in the interim.

The Washington, DC market is currently in the midst of such a transition. The Renewable Portfolio Standard Expansion Act of 2016 (B21-0650), signed last July and put into effect on Oct 8th, 2016, has already made waves in the Washington D.C. SREC market. As stipulated in the legislation, state renewable generation and solar carve-out targets have increased to 50% and 5% respectively by 2032. The bill complements this RPS expansion with an increase in the ACP or the financial penalty for non-compliance by electricity suppliers. The side-by-side comparison of the ACP schedule before and after the recent policy shift is as follows:

dc-acp-schedules

While in theory this ACP increase bodes well for owners of photovoltaic systems selling SRECs into the market, we have seen a slower demand adjustment from the utilities and power providers, the DC market’s natural compliance buyers. As a result, sellers have experienced a lack of liquidity for their SRECs during a time of seemingly favorable market conditions. The lack of demand for SRECs at the current spot market price can be partially attributed to a clause in B21-0650 which states that the new ACP schedule does not apply to any utility load contract entered into before October 8th, 2016. This grandfathering of competitive electricity supply contracts means utilities and load serving entities (LSEs) have two different RPS programs they are simultaneously subject to, as some of their contracts are subject to the old $350 ACP and some subject to the new $500 ACP. In effect, SREC demand is split between the old and new program.

Reflective of the $150 difference between the previous program’s and current program’s ACP for calendar year 2017, the price of DC17 SRECs increased from $320 to $480 from October 2016 to February of 2017. However, due to compliance buyers balancing their purchases between the $350 and $500 obligation levels, the market has settled to levels that reflect a balance between the two separate ACP levels for calendar year 2017.

While prices may continue to decrease slightly as compliance buyers better understand their future SREC needs, we expect that over the coming months the market will begin to stabilize and recover.  Buyers will inevitably adapt to the policy changes and assess their positions with regards to the two RPS obligations. The brokerage desk at SRECTrade has been working closely with buyers to better understand their obligations and ensure that the market remains liquid and accessible to all sellers.

As always, please feel free to reach out to the SRECTrade client services team, or your brokerage desk contact, to further discuss the current status of the market and our outlook on SREC pricing.

Disclaimer. This document, data, and/or any of its components (collectively, the “Materials”) are for informational purposes only. The Materials are not intended as investment, tax, legal, or financial advice, or as an offer or solicitation for the purpose or sale of any financial instrument. SRECTrade, Inc. does not warranty or guarantee the market data or other information included herein, as to its completeness, accuracy, or fitness for a particular purpose, express or implied, and such market data and information are subject to change without notice. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Any comments or statements made herein do not necessarily reflect those of SRECTrade, Inc. SRECTrade, Inc. may have issued, and may in the future issue, other communications, data, or reports that are inconsistent with, and reach different conclusions from, the information presented herein.

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SRECTrade Attends IPA’s 2017 RPS Workshops

Posted May 30th, 2017 by SRECTrade.

On May 17th and 18th, SRECTrade attended the Illinois Power Agency’s Renewable Resources Workshops. These workshops centered around the state’s new RPS and its components, including the Adjustable Block Program, Community Solar incentives, and the Illinois Solar For All Programs.

Overview of the New Illinois RPS and the Long-Term Renewable Resources Plan

The new RPS moves to a single compliance regime rather than having separate mechanisms for customers serviced by the alternative retail electricity suppliers (ARES). Under the old RPS, this retail choice lead to budget and target uncertainties. The goal of the new RPS will still be 25% renewables by 2025, but this target will now apply to all retail sales. The Future Energy Jobs Act, Public Act 099-0906, was signed into law on December 6, 2016 and can be read here.

The new law will take effect on June 1, 2017. Please see below for a draft timeline for the implementation of the RPS programs, as provided by the IPA in its Overview presentation:

il-rps-implementation-timeline

Under the new RPS, Illinois is moving away from structured procurements for non-utility scale solar. Projects up to and including 2 MW in size will instead be eligible for participation in the new RPS’ Adjustable Block Program, or ABP, which will provide for 15-year REC contracts.

Key components of the ABP are:

  • Blocks have set sizes and prices that adjust between blocks, which the IPA may review
  • Eligible systems are those energized after June 1, 2017 (emphasis on new projects)
  • Transparent, upfront schedule of REC prices
  • 15 year REC contracts
    • Paid upfront and in full for systems 10 kW and below
    • 20% of contract price paid at interconnection/energization and the remaining portion paid over subsequent 4 year period for systems 10 kW-2 MW (DG or community)
  • The utility will be the counterparty to the executed contracts

The goal of the ABP is to ensure that solar projects are developed in diverse locations and that they are not overly concentrated. The IPA has yet to determine the number, size, categories, and prices of blocks as well as the application, contracting and delivery process. These issues will be resolved during the implementation process.

Community Solar

Community Solar will operate as a subset of the ABP with similar features and the same goal. Under community solar, an electric generating facility credits the value of electricity generated to the subscribers of the facility. A subscriber has a subscription of no less than 200 watts to a community renewable generation project and may total no more than 40% of the nameplate capacity of an individual project. At a high level, the provision for Community Solar Projects will mirror those for larger DG systems, but may differ in project development and application requirements.

Illinois Solar for All Programs

The goal of the Illinois Solar for All Programs is to bring solar PV to low-income communities in Illinois. The programs are distinct but will share aspects with the Adjustable Block Program for DG and Community Solar. The four programs are as followed:

  1. Low-Income Distributed Generation Incentive (22.5%)
  2. Low-Income Community Solar Project Initiative (37.5%)
  3. Incentives for Non-Profits and Public Facilities (15%)
  4. Low-Income Community Solar Pilot Projects (25%)

SRECTrade will continue to participate in the implementation proceedings for the new RPS. In addition, SRECTrade will server as an aggregator in the Fall 2017 DG Procurement. You can see the results from the Spring Utility DG Procurement here.

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.

Maryland RPS Bill Passes in the Senate

Posted April 7th, 2016 by SRECTrade.

On Wednesday, April 6th, Maryland’s Senate passed SB0921 31-14 with a bipartisan vote. The “Clean Energy Jobs – Renewable Energy Portfolio Standard Revisions” increases the Renewable Portfolio Standard to 25 percent by 2020 – up from the current obligation of 20 percent by 2022. The House version of the bill, HB1106, passed on March 21st. The consolidation of these two bills is anticipated to occur by Monday, April 11th, before advancing to Governor Larry Hogan’s desk.

On a related note, Gov. Hogan signed the Greenhouse Gas Emissions Reduction Act (SB0323) into law on Monday, April 4th, requiring the state to decrease greenhouse gas emissions by 40 percent from 2006 levels by 2030.