PUC Declines To Modify RPS Obligation Based On REC Market Conditions, Despite Objections From Retail Supplier

March 9, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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The New Hampshire PUC declined to modify the Class III Renewable Portfolio Standard requirements for the 2019 compliance year.

The Commission maintains the requirement at eight percent as established in RSA 362-F:3.

Pursuant to RSA 362-F:4, VI, the Commission may modify the Class III requirement, "such that the requirements are equal to an amount between 85 percent and 95 percent of the reasonably expected potential annual output of available eligible sources after taking into account demand from similar programs in other states."

"Based on the record before us, we find that no modification of the 2019 Class III Renewable Portfolio Standard requirement is warranted. Not only is a modification unsupported by the stakeholders’ comments, but similarly-situated stakeholders made conflicting arguments about whether it is appropriate for the Commission to modify the 2019 Class III RPS requirement. Of the electricity distribution utilities that commented, all stated that they had either obtained a sufficient number of RECs to meet eight percent of their 2019 retail sales, or, in the case of Eversource, that it was very close to obtaining a sufficient number of RECs. The utilities disagreed, however, as to whether the Commission should modify the 2019 Class III requirement," the PUC said

"Constellation, the only commenting competitive supplier stated that market prices indicated a shortage of supply, and that the Commission therefore should modify the requirement," the PUC noted

However, the PUC said that, based on the representations made by the commenters, including several biomass generators, "we find no evidence that the potential 2019 Class III REC supply will be insufficient to meet the total 2019 Class III RPS compliance requirement."

The PUC said that the representations made by the commenters, including several biomass generators, "demonstrate[] that the total potential 2019 Class III REC supply is greater than any estimated 2019 Class III RPS compliance requirement."

"No stakeholder presented evidence demonstrating that the total potential 2019 Class III REC supply will be insufficient to meet the total 2019 Class III RPS compliance requirement. In addition, pursuant to 362-F:7, I, banked Class III RECs from the previous two compliance years may be used to meet up to 30 percent of the 2019 Class III requirement. Any such banked RECs used for 2019 compliance would further decrease the demand for 2019 Class III RECs to meet the 2019 RPS Class III compliance requirement," the PUC said

"We acknowledge Constellation’s comments suggesting that the market is constrained, that this situation will continue, and that RECs produced by Class III-eligible sources will be settled in Connecticut before New Hampshire. Constellation’s conclusions, however, are not supported by the record. As [New Hampshire Department of Environmental Services] points out, the Commission received no Class III ACPs during the 2018 compliance year. For compliance year 2019, both New Hampshire and Connecticut1 had an ACP rate of $55.00; as such, it appears there is no compelling reason that Class III RECs would more likely be settled in any other state Constellation and Bridgewater present conflicting statements about the availability of Class III RECs; however, as the Commission has previously stated, difficulty in purchasing an adequate amount of RECs due to constrained supply does not create an undue hardship or merit a downward modification to RPS requirements. See Renewable Portfolio Standard, Order No. 25,674 at 7-8 (June 3, 2013)," the PUC said

DE 19-203

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