Regulator Issues Revised Proposal That Would Continue To Allow Retail Suppliers To Use Utility Consolidated Billing For Bundled Renewable Energy Plans

Earlier Draft Had Proposed Prohibiting Offering Of Bundled Renewable Plans Through UCB, Proposed Allowing Only RECs Via Separate Line Item

January 29, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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The Connecticut PURA has issued for comment a revised proposal addressing generation supply offers that are marketed as exceeding the then current minimum renewable portfolio standard (RPS) requirement (i.e., a voluntary renewable offer or VRO), with the revised proposal allowing the continued offering and billing of bundled renewable energy plans through utility consolidated billing, subject to various conditions

As exclusively first reported by EnergyChoiceMatters.com, the Connecticut PURA had last year originally issued a proposal that would prohibit retail electric suppliers from providing to customers an electricity plan that includes in a bundled price renewable energy that exceeds the state's RPS if such plan is billed through utility consolidated billing (UCB).

Under the original proposal, all renewable energy products billed through UCB would be REC-only plans, at certain standard percentage levels and which meet state requirements (including local sourcing). Suppliers wishing to offer any renewable energy plans that do not meet these requirements would have to use dual billing for such plans

See our prior story for full details on the original proposal

PURA has now issued for comment a revised proposal that would retain both a program similar to the Clean Energy Options Program (CEOP), a REC Only VRO, as currently administered by the electric distribution companies (EDC), and would also continue to allow VROs bundled with generation supply offers (Bundled VRO) provided the Bundled VRO complies with the program rules.

"The revenue for both REC Only VROs and Bundled VROs would continue to be recovered through the EDC bill: REC Only VROs through a separate line item charge on customer bills and Bundled VROs as currently done through consolidated billing within the supplier’s generation supply rate per kWh," PURA states in the revised proposal

PURA further set forth terms of the revised proposal as follows:

Supplier Billed VROs

Suppliers that directly bill either a REC Only VRO or Bundled VRO would not be subject to these program rules. As a result, directly billed VROs could include non-Class I RECs from non-adjacent regions, e.g., other nationally sourced generation. However, the supplier would be required to inform customers as to any RECs that do not meet Connecticut Class I standards.

VRO Percentage – EDC-billed REC Only VRO or Bundled VRO

Any EDC billed REC Only VRO or Bundled VRO would be limited to 50% or 100% of a customer’s kWh consumption. The then-current minimum renewable portfolio standard (RPS) would not count toward calculating these percentages. For example, a customer uses 1,000 kWh. All VRO Offers would need to retire the appropriate RECs to support 500 kWh (50%) or 1,000 kWh (100%). This requirement is meant to clearly differentiate the renewable energy that the customer supports in excess of the RPS under each VRO and simplify calculation of the RECs associated with each VRO, PURA said

Bundled VRO Recovered Through EDC Bill

For bundled VROs recovered through utility consolidated billing, the proposed terms are as follows:

1. Bundled VRO would be recovered through EDC consolidated billing as part of the supplier’s generation supply rate per kWh;

2. Bundled VROs would require a minimum of 10% CT Class I NEPOOL GIS Certificates. The remaining supply must meet the Connecticut Class I technology requirements but can be sourced from: DE, DC, OH, IL, IN, MI, MD, NC, NJ, NY, PA, WV, or VA, in addition to the New England states (CT, MA, ME, NH, RI, VT).

3. RECs must be retired through an authorized REC tracking system that is determined to have sufficient safeguards to prevent double-counting (for example, NEPOOL-GIS, PJM-GATS, NC-RETS, NY-GATS, or M-RETS).

4. Customers can enroll 50% or 100% of their total load and all VRO RECs would be in excess of the then-current RPS;

5. All Bundled VROs must be posted to the Rate Board.

REC Only VRO (successor CEOP Program)

REC Only VROs would have the following components:

1. Billed as a line item on EDC bills;

2. Line item would be displayed as Renewable Energy Certificates, and identify the number of kWh for the billing cycle based on the offer percentage, cost per kWh and total amount billed;

3. Customers could enroll 50% or 100% of their total load and all VRO RECs would be in excess of the then-current RPS;

4. Would require a minimum of 10% CT Class I NEPOOL GIS Certificates. The remaining supply must meet the Connecticut Class I technology requirements but can be sourced from: DE, DC, OH, IL, IN, MI, MD, NC, NJ, NY, PA, WV, or VA, in addition to the New England states (CT, MA, ME, NH, RI, VT);

5. RECs must be retired through an authorized REC tracking system that is determined to have sufficient safeguards to prevent double-counting (for example, NEPOOL-GIS, PJM-GATS, NC-RETS, NY-GATS, or M-RETS);

6. All REC Only VROs must be posted to the Rate Board;

7. EDCs would verify REC retirement;

8. Payment to the supplier would be made when REC retirement is verified;

9. Requires a contract with each customer;

10. Customers can opt in at any time at no cost and opt out at any time without penalty;

11. Opt in and opt out would occur only on the customer’s meter read date (On Cycle);

12. Requires an annual fixed price in effect during a calendar year;

13. The fixed price would apply to both the 50% or 100% option;

14. Suppliers must provide the EDC with the annual rate per kWh for each offer on December 1st, 30 days prior to the start of the REC Only VRO calendar year.

15. Requires disclosure at the time of enrollment and annually if the product mix changes;

16. Disclosure must describe the source of the RECs associated with the offer, i.e., RECs the customer will be supporting and that will be retired under the offer;

17. Requires an annual historical disclosure that details the actual resources delivered to the customer broken down by percentage of each resource and geographic location;

18. Supplier’s website must provide the pricing and resource mix and must provide this information without requiring any customer specific information including, but not limited to, name, address, utility account number, etc. A zip code search or other similar utility identification tool would be allowed.

PURA requested comments on the following:

1. Comments to the Initial Notice indicated that a potential shortage of appropriate RECs could occur if the Authority limits all VROs to NEPOOL-GIS Class I RECs.

      a. Provide data corroborating such an argument, such as the number of available Class I RECs in NEPOOL-GIS for the past two years and the number of acquired Class I RECs in NEPOOL-GIS for the past two years;

      b. Does expanding the eligible RECs for VROs to adjacent control regions sufficiently address concerns regarding available RECs and possible market and price distortion due to increased demand?

      c. Comment on the proposed 10% minimum percent requirement of NEPOOL-GIS Class I RECs under the modified proposal. Propose an alternative minimum percentage if appropriate.

      d. Comment on allowing the remaining percentage (above the minimum) of RECs from geographic regions that extend beyond NEPOOL GIS to adjacent regions, as noted above.

2. Comments to the Initial Notice indicated that requiring a separate contract for VROs would present difficulties. The Authority wishes to promote greater transparency within the VRO program and believes the current method of addressing VROs does not produce this transparency. In addition to the proposal above, comment on ways suppliers could continue to offer Bundled VROs and meet the Authority’s goals of increased transparency or other best practices the Authority can model to further its VRO transparency goals. Comments should include but not be limited to examples of existing disclosure labels and/or modifications to the initially proposed disclosure label.

3. Comment on best practice tracking mechanisms used in other jurisdictions for Bundled VROs and REC Only VROs.

4. In comments to the Initial Notice, the EDCs described the complexity of verifying and calculating the RECs necessary to comply with each offer under the proposal in the Initial Notice. Comment on verifying and calculating RECs under the modified proposal, which would limit qualifying RECs to Connecticut defined Class I RECs from NEPOOL GIS and adjacent regions and would limit VROs to 50% and 100% of the customer’s consumption and would EXCLUDE the then-current RPS from the calculation.

5. In comments to the Initial Notice, EDCs commented that their role in administering the current CEOP program is manageable due to the limited number of participating suppliers, limited offerings and limited rate changes allowed in the program. Comment on whether the proposal identified above to allow only calendar year fixed rate REC Only VRO products in which customer participation begins and ends on cycle and a single annual rate is applied to the customer’s consumption would eliminate the need to limit the number of supplier participants. If comments support limiting the number of suppliers discuss the mechanisms, best practices and standards to so. For example, annual or periodic RFP, etc.

6. As noted, all VROs would be required to appear on the Rate Board. To facilitate customer review of the generation resources supported under these offers the Rate Board would need to display a concise statement and/or visual representation of these generation resources and therefore the RECs being supported. At present, licensed suppliers self-report generation supply offers to the Rate Board. The Authority anticipates a similar self-reporting standard for REC Only VRO suppliers. Comment on ways to achieve this goal.

7. Discuss if any changes are needed to the current contract renewal practices of REC Only VROs to facilitate the program described above.

Docket 16-12-29

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