Regulator Proposes To Require Retail Suppliers To Settle RPS Obligations In "More Real-Time" Fashion, Cites Bankruptcies Of Suppliers With Unmet RPS Obligations

November 19, 2019

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The Connecticut Public Utilities Regulatory Authority is considering requiring retail suppliers to settle their RPS obligations earlier.

"In recent years, the Authority has encountered situations where electric suppliers have amassed large RPS obligations and filed for bankruptcy or left the market without meeting those RPS obligations. Current bonding requirements are insufficient to cover the shortfalls, and the timing of the current annual review process does not allow the Authority to quickly address, or prevent the accrual of large, unmet RPS obligations," PURA said

"As a result, the Authority plans to transition to a more real-time system of allocating and settling renewable energy credits (REC). The Authority believes that a more real-time system will prevent significant RPS shortages, better facilitate the General Assembly’s clean energy goals, and reduce the administrative burden associated with tracking, reporting, and approving annual REC obligations," PURA said

The Authority presented for comment a proposal for RPS regulations that would require suppliers to settle a pre-specified minimum percentage of their quarterly RPS requirement (e.g., 90%) in the trading period associated with the months the load was served using monthly billing or load settlement data obtained from the electric distribution companies with an adjustment for line losses to determine the quarterly RPS REC obligation.

Suppliers would be allowed a true-up during the fourth quarter settlement period for any remaining, unsettled RPS requirements for the annual period. The supplier would not be restricted from settling 100% of its quarterly load obligation in any quarter, or from purchasing additional RECs to apply to a later quarterly compliance period during a given RPS year.

To accomplish a more real-time settlement of RECs, the proposal revises the definition of load and provides for quarterly enforcement of unmet RPS requirements by the Authority under Conn. Gen. Stat. § 16-41.

The proposed language from PURA would specifically provide that each electric supplier shall submit quarterly reports each year by October 15, January 15, and April 15, or as often as the Public Utilities Regulatory Authority indicates as necessary in a decision, demonstrating compliance with a minimum of ninety percent (90%), or the amount the Public Utilities Regulatory Authority deems necessary in a decision, of the renewable energy portfolio standard requirements set forth in sections 16-245a and 16-243q of the Connecticut General Statutes for each of their respective quarters. The report submitted on October 15 shall demonstrate compliance during the first quarter of the calendar year. The report submitted on January 15 shall demonstrate compliance during the second quarter of the preceding calendar year. The report submitted on April 15 shall demonstrate compliance during the third quarter of the preceding calendar year. Each electric supplier shall submit an annual report by July 15 for the preceding calendar year that demonstrates compliance for the fourth quarter of the preceding calendar year and demonstrates full compliance for the entire preceding calendar year.

Under the proposal, electric distribution companies shall make available to electric suppliers monthly sales data on which electric suppliers shall base their quarterly compliance reports. Electric distribution companies shall provide to the Public Utilities Regulatory Authority and electric suppliers on or before May 1, August 1, and November 1, quarterly reports summarizing the electric suppliers’ monthly sales data on a form provided by the Public Utilities Regulatory Authority through a decision or on its website, and on or before February 1 a quarterly report for the fourth quarter of the preceding calendar year and an annual report for the preceding calendar year summarizing the electric suppliers’ monthly sales data on a form provided by the Public Utilities Regulatory Authority through a decision or on its website. The monthly sales data shall be adjusted to reflect line losses. The adjustment shall be established through a decision issued by the Public Utilities Regulatory Authority.

Under the proposal, an electric distribution company or electric supplier may bank Class I, Class II and Class III renewable energy certificates generated in one year to comply with the renewable energy portfolio requirements in either of the two following years, provided the electric distribution company or electric supplier has complied with the renewable energy portfolio requirements each year by means of renewable energy certificates. In addition, the electric distribution company or electric supplier shall demonstrate to the satisfaction of the Public Utilities Regulatory Authority that:

1) The banked renewable energy certificates were in excess of the renewable energy certificates needed for compliance in the year they were generated, and the excess renewable energy certificates have not previously been used for compliance with section 16-245a(a) or section 16-243q(a) of the Connecticut General Statutes;

2) The 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;

3) The banked Class II renewable energy certificates do not exceed thirty per cent of the Class II sources needed by the electric distribution company or electric supplier for compliance in the year the certificates were generated;

4) The banked Class III renewable energy certificates do not exceed thirty per cent of the Class III sources needed by the electric distribution company or electric supplier for compliance in the year the certificates were generated; and

5) The banked renewable energy certificates have not otherwise been, nor will be, sold, retired, claimed or represented as part of the total output or services, or used to satisfy obligations in jurisdictions other than Connecticut.

Docket 19-10-26

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