Energy Choice
                            

Matters

Archive

Daily Email

Events

 

 

 

About/Contact

Search

Regulator Allows Utilities To Use RECs Produced Under Nonbypassable Long-Term Utility Contracts For Default Service Obligations

December 21, 2017

Email This Story
Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

A final Connecticut PURA decision allows the EDCs to use RECs that are generated under various long-term contracts an EDC has with renewable generation to be allocated to the EDC's default service obligation in situations where the EDC self-manages default service load, with any REC transfer occurring at a price that is reflective of the market price for such RECs and that is approved by the state's Procurement Manager (PM)

Specifically, PURA's final decision will, "allow the Electric Distribution Companies to transfer the required number of Class 1 Renewable Energy Credits from the appropriate non-bypassable account to its Last Resort Service or Standard Service account at a transfer price approved by the Procurement Manager."

The various long-term contracts or utility-owned generation under which the RECs are procured are paid for by all distribution customers on a nonbypassable basis

United Illuminating had requested authorization to allow the EDCs to transfer Class I RECs that it produces or purchases under long-term contracts to its load-serving obligation when it self-manages Last Resort Service or Standard Service load. As proposed, these transfers would take place at a price that is reflective of the market price for Class I RECs at the time of the transfer, subject to approval of the PM. As an example, if the EDC has an inventory of 20,000 Class I RECs from long-term contracts and its own generation, and an obligation to provide 1,000 Class I RECs to meet its RPS obligation for LRS, it would be allowed to transfer 1,000 Class I RECs from the appropriate non-bypassable account to its LRS account at a transfer price approved by the Procurement Manager. The remaining 19,000 Class I RECs would be sold into the wholesale market.

The final order provides that the transfer of RECs will be elective, not mandatory for the EDCs, and subject to approval by the PM

"Allowing the utility to avoid the sale and re-purchase of an equal quantity of Class I RECs from the wholesale market has the potential to reduce the administrative burdens and costs associated with the transactions. Ratepayers can benefit from such reduced burdens and costs. UI’s proposed amendment to the Plan is consistent with long-term contracting statutes, inasmuch as those statutes allow for the utilization of contracted RECs to meet an electric distribution company’s RPS requirements for SS and LRS. See Conn. Gen. Stat. §§16-244r(d) and 16-244t(d) ('an electric distribution company may retire the renewable energy credits it procures through long-term contracting to satisfy its obligation pursuant to section 16-245a'); Conn. Gen. Stat. §16-244v(c) ('the amount of renewable energy from such facilities shall be applied to reduce the electric distribution company’s Class I renewable energy source portfolio standard obligations')," PURA said in a final decision granting EDCs such authority

Under PURA's final order, the EDCs will be required to report the transfers in the monthly self-management plan provided to the procurement manager. That monthly plan is to provide documentation on how the transfer prices were set and include the quantity of RECs transferred and the transfer price(s).

"It is PURA’s expectation that the utility will do its best to maximize the likely net value of the RECs to ratepayers over time through its sale and use of these RECs. Such savings, moreover, are credited back to all ratepayers through the NBFMCC. Under the Procurement Plan, the utility has a different obligation to procure low-cost, competitive rates for SS and LRS customers, inclusive of the cost of RECs needed to meet supply obligations of Connecticut’s RPS," PURA said

"The Authority, in this decision, approves the proposal to transfer contracted RECs for use for SS and LRS customers as part of the self-managed portion ... It will still be incumbent on the utility to demonstrate that the circumstances of such transfer (for instance, the method of valuing the contracted RECs in the transfer) satisfy the utility’s obligation to prudently manage ts sales and use of the RECs. PURA is open to the Utility’s ideas as to how this can be accomplished and demonstrated," PURA stated

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
NEW! -- Analyst Billing and Transaction Services, Retail Operations -- Retail Provider -- Houston
NEW! -- Commercial Energy Advisor -- Dallas
NEW! -- Business Development Manager -- Retail Supplier -- Houston / Dallas
NEW! -- Director, Retail Energy Supply and Pricing -- Retail Supplier -- Houston
NEW! -- Operations Analyst -- Retail Supplier
NEW! -- Sales & Marketing Manager -- Retail Supplier
NEW! -- Retail Energy Account Manager -- DFW
NEW! -- Director of Affiliate Business Development -- DFW
NEW! -- Commercial Lead Generation Specialist -- Retail Provider
NEW! -- General Counsel/ Sr Attorney, Retail Electricity and Gas -- Retail Supplier -- Houston
NEW! -- Operations Manager/Director -- Retail Supplier -- Houston
NEW! -- Analyst/Senior Analyst, Energy Management and Marketing -- Retail Supplier -- Houston
NEW! -- Pricing and Structure Analyst -- Retail Supplier
NEW! -- Retail Sales Specialist, Telemarketing /D2D/Mass Markets -- Retail Supplier -- Houston

Email This Story

HOME

Copyright 2010-16 Energy Choice Matters.  If you wish to share this story, please email or post the website link; unauthorized copying, retransmission, or republication prohibited.

 

Archive

Daily Email

Events

 

 

 

About/Contact

Search