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Retail Supplier Seeks Order Certifying Out-Of-State Solar RECs May Be Used For Compliance In Pennsylvania

January 22, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Direct Energy Business Marketing, LLC (DEBM) and Community Energy, Inc. (CE) submitted a joint petition to the Pennsylvania PUC requesting that, "the electric production of ten out-of-state solar facilities be qualified as satisfying the Tier 1 solar photovoltaic shares alternative energy credits (i.e. SAECs) obligations of DEBM and/or its Pennsylvania licensed affiliates through the Alternative Energy Portfolio Standards ('AEPS') Reporting Year of 2019 and applicable banking period pursuant to a Sale and Purchase Contract ('SAP Contract') entered into prior to October 30, 2017."

The SAP Contract obligates CE to deliver to DEBM a specific amount of SAECs for each of the AEPS Reporting Years of 2017 through 2019 to be used for securing AEPS compliance as permitted by the AEPS Act. CE intends to satisfy this pre-existing contractual obligation by securing the SAECs from ten out-of-state solar generating facilities that were previously certified to produce qualifying Pennsylvania SAECs prior to the passage of Act 40

Because the electric production for each of these facilities since November 1, 2017 has been re-designated as NSTI (eligible for non-solar Tier 1 only), consistent with the Commission’s directives following passage of Act 40, the production cannot be utilized by DEBM or any of its licensed supplier affiliates to satisfy SAEC requirements unless the Commission grants the petition.

"Since the SAP Contract is dated March 22, 2016, obligates the sale and purchase of SAECs through the 2019 AEPS Reporting Year (including applicable banking period) and CE has identified the ten out-of-state generation facilities that it seeks to rely on to satisfy its contractual obligations to DEBM, Joint Petitioners request that the Commission certify the output from the identified facilities as satisfying Pennsylvania SAEC requirements through the 2019 AEPS Reporting Year and applicable banking period pursuant to 2804(2)(ii) of Act 40 in accordance with existing contractual obligations," the joint petitioners said

"Granting this Petition will honor the existing contract between DEBM and CE and permit DEBM and/or its Pennsylvania supplier licensed affiliates to utilize the production of the specified facilities to satisfy SAEC requirements through the 2019 AEPS Reporting Year and applicable banking period as contemplated by Act 40," the joint petitioners said

In a prior order, the PUC held that, the electric production from out-of-state solar facilities that were previously certified to produce Pennsylvania SAECs could only be used by EGSs for post-October 30, 2017 compliance if the credit is "connected, in some way, to use by an ... EGS for compliance with the AEPS Act."

The PUC directed that entities holding contracts prior to October 30, 2017 "within the chain of production of the solar AECS supplying those contracts" may file a petition seeking to have "the AECs covered by the contracts" "certified for use by the EGS ... for compliance with the AEPS Act solar PV share requirement."

The joint petitioners noted that the SAP Contract was entered into prior to the October 30, 2017 effective date of Act 40, has not been modified since October 30, 2017, has not been terminated, and continues to remain in full force and effect.

The joint petitioners said that the SAP Contract qualifies as, "a binding written contract for the sale and purchase of alternative energy credits derived from solar photovoltaic energy sources entered into prior to," October 30, 2017

The SAP Contract establishes the intent of DEBM to utilize the electric production of the facilities upon which CE intends to rely to satisfy the SAEC requirements of DEBM and/or its affiliates through the 2019 AEPS Reporting Year (and applicable banking period). The joint petitioners said that this is consistent with the PUC's finding regarding a petition from NRG Energy regarding out-of-state solar RECs (see story here)

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