RESA Asks Delaware PSC to Impose RPS Impact Limits on All Load Serving Entities Email
This Story November 2, 2010
The Delaware PSC should revise its regulations to permit
the freezing of the minimum cumulative percentage requirements for the RPS and solar
RPS carve-out for all electric service providers, not only Commission-regulated utilities,
the Retail Energy Supply Association said in comments to the PSC (Regulation Docket
Consistent with recent legislation, proposed RPS Rule 3.2.16 permits the Commission
to freeze the minimum cumulative percentage requirements from RPS-eligible resources
and solar photovoltaic energy resources for Commission-regulated electric companies
when the Delaware Energy Office determines that the cost of complying with the minimum
requirements of the RPS exceeds 3% of the retail cost of electricity during the same
compliance year, or when the cost of complying with the solar carve-out exceeds 1%
of the retail cost of electricity (9/10).
"Proposed RPS Rule 3.2.16 produces an unequal playing field that directly conflicts
with the requirement of the Commission to minimize the compliance burdens for retail
electricity suppliers in Delaware [26 Del. C. §362(a)]," RESA said.
"If the Commission were to enforce the freeze on regulated electric companies only,
unregulated electric suppliers would face a market in which they are significantly
disadvantaged," RESA added, since the regulated companies would be able to pass on
savings from lower compliance costs to customers.
"Moreover, the Commission would be setting a discouraging precedent if it adopts
a rule that permits a freeze on minimum cumulative percentage requirements for regulated
electric companies but not for unregulated companies. Specifically, if the Commission
were to adopt this rule, many retail electricity suppliers would view the environment
for unregulated retail electricity suppliers as negative in Delaware, choosing to
forego opportunities in this state and instead sell electricity elsewhere. Such
decisions would run directly contrary to the purpose behind the new, proposed RPS
Rules, discouraging rather than encouraging the development of renewable energy resources
in Delaware," RESA said.
Additionally, RESA requested that the Commission use its discretionary power to exempt
existing contracts from the new minimum RPS requirements that would otherwise apply
starting in 2010.
While suppliers may have the contractual ability to pass-on the cost of new, higher
RPS requirements (under change in law clauses), customers who have entered into fixed
price contracts for price certainty would be negatively impacted by such pass-throughs,
and the impact would discourage future fixed-price contracting, RESA said.
"A perceived inability to rely on existing plan requirements for contracts that are
already executed will tend to limit offers by suppliers to shorter-term propositions,
and retail suppliers in Delaware would face the increased cost of procuring renewable
energy supply on the spot market and likely pass these costs onto customers," RESA