PUC Opens Inquiry To Implement New Thermal Renewable Portfolio Standard (RPS), Level Of Alternative Compliance Payment For Retail Suppliers

March 24, 2020

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

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The Maine PUC opened an inquiry to implement new thermal renewable portfolio standard (RPS) requirements created by legislation enacted last year.

"Thermal energy" is defined as heat, steam, hot water or another form of thermal energy that, among other things, that:

• Is produced directly by a facility using sunlight, biomass, biogas or liquid biofuel or produced as a byproduct of electricity generated by a Class I or Class IA resource

• Begins operation after June 30, 2019, as certified by the commission

• Is used for heating, cooling, humidity control, process use or other end use to meet a need of the end user that would otherwise be met using another energy source such as electricity or an on-site thermal energy system; and

The Thermal RPS, now codified at 35-A M.R.S. § 3210(3-C), provides that the new thermal portfolio requirement begins at 0.4% in 2021 and increases gradually to 4% in 2030, where it remains for each year thereafter.

Among other things, the PUC sought comment on alternative compliance payments that may be used by retail suppliers under the Thermal RPS

The PUC noted that Maine’s statute allows competitive electricity providers (CEPs) to satisfy the Class I, Class IA and thermal portfolio requirements through an alternative compliance mechanism (ACM) and requires the Commission to set the alternative compliance payment (ACP) rate by January 31st of each year and deposit all collected funds into the Energy Efficiency and Renewable Resource Fund established pursuant to 35-A M.R.S. § 10121(2). The Act specifies that the ACP must not be any higher than $50 per megawatt-hour (MWh).

The PUC noted that last year’s RPS rulemaking proceeding set the ACP rate for Class I and IA at the statutory maximum amount of $50 per MWh. The Commission noted in its order that it did not interpret the intent of the Act to require the establishment of a single ACP that would apply to the Class I, Class IA and the thermal portfolio requirements.

The PUC noted that, during the RPS rulemaking proceeding last year, some commenters recommended that the Commission look to New Hampshire and Massachusetts in setting the ACP for the thermal portfolio requirement and suggested a rate of $25.00/MWh which is half the ACP for the Class I and IA portfolio requirement.

The Commission seeks comments on what the ACP rate for the thermal portfolio requirement should be, and the reasons for setting it at the recommended level.

Docket No. 2020-00090

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