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Regulator Issues Interpretation Of Retail Supplier Compliance In Light of Statutory RPS Changes

April 7, 2018

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

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The Connecticut PURA has issued a response to NRG Energy clarifying certain retail supplier RPS compliance requirements in light of statutory changes

The General Statutes of Connecticut (Conn. Gen. Stat.) §16-245a requires that a certain percentage of the electric distribution companies’ (EDC) and suppliers’ total output or services be generated from Class I renewable energy sources with an additional percentage from Class I or Class II renewable energy sources. For example, Conn. Gen. Stat. §16-245a(a)(12) requires that, "[on] and after January 1, 2017, not less than fifteen and one-half per cent of the total output or services of any such supplier or distribution company shall be generated from Class I renewable energy sources and an additional three per cent of the total output or services shall be from Class I or Class II renewable energy sources."

Effective July 1, 2017, the eligibility criteria for Class II renewable energy source was amended by Section 2 of Public Act 17-144, An Act Promoting the Use of Fuel Cells for Electric Distribution System Benefits and Reliability and Amending Various Energy-Related Programs and Requirements (Act). By Final Decision dated October 4, 2017, in Docket No. 03-12-13RE01, et al, Application of Public Service of New Hampshire for Qualification of Gorham Hydro as a Class II Renewable Energy Source – Revocation of Certification, et al., the Authority reopened numerous dockets in which it revoked Class II certifications that were no longer Class II eligible as result of the Act (Revocation Docket Decision). The Revocation Docket Decision specifically stated that, "facilities may earn renewable energy certificates (RECs) for generation produced through June 30, 2017, and that the last day that generation data may be submitted to the New England Power Pool – Generation Information System (NEPOOL-GIS) for RECs creation is October 10, 2017."

In a motion, NRG sought clarification on the following issues.

First, NRG sought confirmation that the EDCs and licensed electric suppliers (Suppliers) are permitted to use RECs from the Class II projects, whose certification was revoked as a result of the Act, for their entire 2017 compliance obligation and not just for the compliance obligation existing prior to the Act’s effective date, and, further, that these RECs can be banked for use in 2018.

PURA stated in response, "The Authority will accept all minted RECs from these resources for generation produced through June 30, 2017, provided the resources submitted their requests for REC creation to the New England Power Pool – Generation Information System (NEPOOL-GIS) prior to October 10, 2017. These minted RECs have all of the characteristics as before, can be used in the same manner as before and all of the same CT RPS requirements and NEPOOL-GIS rules apply. Therefore, the EDCs and Suppliers may bank Class II RECs created before the Act’s effective date for use in 2018. The effect of the Act is that EDCs and Suppliers may not use any RECs from the facilities with revoked Class II certification if the RECs are based on generation produced after July 1, 2017."

NRG also requested that the Authority clarify whether the EDCs and Suppliers may bank Class I RECs when intended for future use in Class II compliance. Specifically, NRG asked that the Authority clarify the amount of Class I RECs that may be banked for future Class I and Class II compliance, in light of the 30% banking limitations specified in Regulations of Connecticut State Agencies (Conn. Agencies Regs.) § 16-245a-1(e). For instance, may a Load Serving Entity bank Class I RECs 30% in excess of its Class I obligations in a given year to satisfy future Class I obligations, and bank additional Class I RECs that same year to satisfy future Class II obligations?

PURA stated in response, "The Authority finds that Conn. Gen. Stat. §16-245a does not establish a Class II RPS requirement. Rather, Conn. Gen. Stat. §16-245a requires every year that a percentage of the EDC and Supplier load be matched with: 1) a fixed per cent of Class I RECs only, and 2) a fixed percent of RECs that can be either Class I or II."

"Additionally, the Regulations of Connecticut State Agencies (Conn. Agencies Regs.) §16-245a-1(e)(2) provides that an EDC or Supplier may bank Class I RECs generated in one year to comply with the renewable energy portfolio requirements in either of the two following years, provided '[t]he banked Class I renewable energy certificates do not exceed thirty per cent of the Class I sources needed by the electric distribution company or electric supplier for compliance in the year the certificates were generated,'" PURA said

"The Authority provides the following example to illustrate how Class I RECs may be banked pursuant to this regulation in order to comply with annual RPS requirements. The RPS requirement set forth in Conn. Agencies Regs.§16-245a(a)(12) for 2017 is that EDCs and Suppliers must have RECs for 18.5% of their load served comprised of 15.5% Class I RECs and an additional 3% of Class I or Class II RECs.2 Therefore, for 2017, Conn. Agencies Regs. Section 16-245a(a)(12) permits an EDC or Supplier to comply using Class I RECs to meet the whole 18.5% REC requirement. Accordingly, for 2017, an EDC or Supplier could bank Class I RECs, pursuant to Conn. Agencies Regs. §16-245a-1(e)2), in an amount that does not exceed 30% of the RECs needed to meet this 18.5% requirement. In conclusion, an EDC or Supplier may bank Class I RECs that do not exceed 30% of the total amount of RECs needed for compliance in any given year that can be satisfied by Class I RECs," PURA said

Docket No. 17-06-23

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