Regulator Seeks Comment On New Alternative To Accelerate Retail Suppliers' RPS Compliance Showing, Based On Stakeholder Feedback

January 21, 2020

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Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Connecticut PURA has requested additional comments concerning changes in the RPS compliance regulations to accelerate retail supplier and LSE showings of compliance

As first reported by EnergyChoiceMatters.com, PURA previously proposed revised regulations to require that retail suppliers settle RPS obligations in a "more real-time" fashion, citing bankruptcies of suppliers with unmet RPS obligations

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.

See our prior story for a full description of the original proposal

Retail suppliers expressed various concerns with the proposal

As a result, PURA has sought additional comment from the Retail Energy Supply Association and other stakeholders on the following specific questions engendered from the initial comments

1. (Banking RECs) RESA stated that the use of banked RECs must be included in the proposed regulation. See RESA Comments, p. 16. Explain how the rules surrounding banked RECs could be modified to achieve ongoing periodic RPS reporting during a compliance year.

2. (Alternative Proposal) The current RPS process does not provide for periodic REC reporting. Instead, the process requires only that suppliers demonstrate compliance on October 15th of the year following a Compliance Year. For example, compliance reporting for 2019 is not required until October 15, 2020, 10.5 months after December 2019 load has been served and nearly two years after January 2019 load has been served. RESA stated that suppliers currently employ a variety of strategies to acquire and/or retire RECs, which include taking delivery of RECs for retirement at the end of a compliance year (10.5 months before the current October 15th compliance reporting requirement), retiring recently purchased or banked RECs throughout the compliance year or making ACP payments. See RESA Comments, p. 4. Reporting these retirements is currently not required. RESA also stated that the revised definition of load is unclear. Id., p 5. RESA also suggested using ACP (banked/refunded) to establish real‑time RPS compliance. Id.

a. Discuss an alternative process that relies on retail sales (aka billing determinants) as a proxy for ongoing, real-time quarterly RPS compliance. Sales would be used to estimate the RPS compliance obligation for the first three quarters of each RPS Compliance Year. A final, precise determination of each supplier’s RPS obligation based on load settlement data could then be established under current standards.

b. Discuss alternatives to the current final load settlement reconciliation process and timing of that process for consideration.

3. Several written comments indicated that quarterly REC compliance might disrupt the current REC market by causing price distortions.

a. Comment if banking of RECs annually and quarterly (e.g., allowing RECs purchased in one year to be used in the next two years and allowing RECs purchased in one quarter to be used in future quarters in the same year or future years), and elimination of the 30% cap, alleviates price distortion concerns.

b. Would tiered, cumulative quarterly compliance (e.g., Q1-25% of estimated load, Q2-50% of cumulative (Q1+Q2), estimated load, Q3-75% of cumulative (Q1+Q2+Q3), estimated load, and, Q4-100% of total resettled load) alleviate price distortion concerns?

c. Are there other methods the Authority could implement with a quarterly reporting scheme that would alleviate price distortion concerns?

The Authority said that it would appreciate responses supported with data regarding the actual amount of RECs available vs. RECs needed during past trading and compliance year periods.

Docket 19-10-26

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