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DC 100% RPS Bill Which Passes First Reading Omits Mandate For Retail Suppliers To Enter Long-Term PPAs For Supply

RESA Urges Elimination Of Proposed Utility-Run Energy Efficiency Programs From Bill

November 28, 2018

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Copyright 2010-17
Reporting by Paul Ring •

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The Council of the District of Columbia passed on first reading Bill B22-0904, which would increase the District's RPS to 100%

An earlier version of the bill would have required that retail electric suppliers, and the SOS provider, use long-term PPAs with renewable resources for 80% of their overall supply requirements, and for 70% of their REC purchases used to meet the RPS.

These earlier proposed long-term PPA requirements for retail suppliers and the SOS provider were not included in the bill approved on first reading.

While the Retail Energy Supply Association did not oppose the bill's increase in RPS, to the extent such requirements apply prospectively, RESA had submitted testimony to the Council opposing the originally proposed long-term PPA obligations. RESA has noted in testimony that, "Within the next ten-years, the renewable energy market will likely be much more decentralized. District consumers will have the ability to, and will want to, make their own decisions regarding energy either on their own or through clean energy aggregations. They will have the ability to pay for what energy they want supplied and choose the source. This vision of the future is inconsistent with the [original] bill's top down mandate."

The Council's Committee on Business and Economic Development had removed the long-term PPA requirement from the committee mark-up of the bill, citing testimony in opposition to the proposal, and further noting that the D.C. PSC is currently conducting a review of the SOS procurement process, including consideration of the use of long-term PPAs for SOS supply

The bill must be approved on a second reading to advance in the legislative process.

Provisions included in the bill as approved under the first reading include increasing the RPS to 100% Tier I resources by 2032 (from the currently required 50%). A 5.5% carve-out for solar energy would also be established by 2032, increasing to 10% by 2041

The RPS would increase gradually from 2019 until 2032, with the first Tier I change occurring in 2021, with Tier I increasing to 26.25% at such time (from 20%), and the first solar tier increase occurring in 2019, with the solar tier increasing to 1.85% at such time (from 1.35%)

The bill states for three years after January 1, 2019, the subsection related to increases in the RPS shall not apply to any contract entered into before the effective date of the legislation, provided, that such subsection shall apply to an extension or renewal of such a contract.

An issue remaining to be further reviewed before second reading is allowing the electric and natural gas utility to offer and conduct, using ratepayer funds, energy efficiency and demand reduction programs. An amendment adopted on first reading would allow the utilities to conduct such programs, with cost recovery and a return on investment, upon PSC approval and to the extent such efforts are not appreciative of D.C.'s Sustainable Energy Utility. Some councilors expressed concern with the electric utility operating such programs, and the language will be further reviewed prior to second reading.

The bill also authorizes the PSC to consider and approve an application by the electric utility to promote transportation electrification through utility infrastructure ownership and other programs and incentives, if the PSC finds such proposal to be in the public interest

The Retail Energy Supply Association (RESA) cautioned the Council against utility-run energy efficiency programs, and issued the following statement concerning the approval of the bill on first reading:

Statement from RESA

"The Retail Energy Supply Association (RESA), the nation’s leading trade association representing competitive retail energy suppliers, commends the Council of the District of Columbia for putting consumers first as it works to pass the CleanEnergy DC Omnibus Amendment Act of 2018 (B22-904). RESA is devoted to working with all stakeholders to promote a market that works for every consumer and believes this new bill is an exciting step in the right direction.

"RESA supports the goal of increasing the Renewable Portfolio Standards (RPS) and believes the Council’s decision to remove the long-term purchase agreement requirements not only protects electric customers, but also preserves the competitive market, keeps electricity prices lower and allows consumers access to more renewable energy innovations only a competitive market can deliver – all while meeting the District’s environmental goals.

"RESA encourages the Council to support customer adoption of energy efficiency measures meant to decrease the District’s carbon footprint, but not by saddling ratepayers with the cost associated with utility run programs. RESA is devoted to promoting a market that works for every consumer and believes eliminating this aspect of the bill would be an important step in that direction."

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