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Draft Texas Proposal For Adoption Would Maintain Limited Compliance Life For RECs Under Voluntary Program
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Staff of the Texas PUC have filed a draft proposal for adoption which would, as directed by HB 1500, repeal and replace 16 Texas Administrative Code (TAC) §25.173, relating to the Goal for Renewable Energy, with the new rule establishing a temporary solar-only renewable energy credit (REC) mandate
The new solar-only RPS would be in effect for January 1, 2024 through September 1, 2025 (with a settlement period following September 1, 2025)
The PUC previously terminated the old RPS program compliance period, effective August 31, 2023, although the old rule would still apply, for the limited purpose of settlement, through December 31, 2023
There are no RPS compliance requirements from September 1, 2023, through January 1, 2024; however, any solar RECs generated during this period may be used to fulfill retail entity solar RPS obligations for the 2024 and 2025 compliance periods, the draft provides
The proposed rule would also implement a voluntary REC tracking program administered by ERCOT for use by REPs and other parties
During the rulemaking, Vistra opposed voluntary RECs having a compliance life of three years, as they did under the mandatory RPS
The draft proposal for adoption would maintain the established practice of assigning RECs a three-year compliance life, even under the voluntary program
The draft preamble states, "The commission also declines to remove the compliance lives of non-solar RECs or of all RECs after the expiration of the solar RPS mandate as [sic] this time. Currently, retail electric providers (REPs) are able to certify their energy products as ‘green’ by voluntarily retiring RECs with ERCOT. These voluntary retirements and ‘green’ product certifications benefit both REPs and consumers by allowing REPs to provide transparent renewable energy options to consumers and allowing consumers to make informed choices when choosing energy plans. Based on the current program structure, consumers have an expectation that the green energy product they are purchasing is supporting renewable energy that was generated within the last three years."
The draft preamble states, "Without compliance lives, REPs would still be able to voluntarily retire RECs for product certifications, but there would not be any certainty for consumers surrounding when that REC was generated. The commission declines to remove the compliance lives of RECs without a more focused investigation of the effects such a change would have on the market and consumers."
The draft preamble states, "Further, the commission disagrees with Vistra that retaining compliance lives on RECs constitutes a property rights violation. The compliance life of a REC exists when a REC is created, and it is known by all parties during any transactions involving the REC that the REC will eventually expire. On the other hand, without compliance lives, all RECs could exist on the voluntary market in perpetuity. This would eventually over-inflate the voluntary market, decrease the market value of each REC and disincentivize participation in the market for generators or retail entities looking to sell these RECs."
Project 55323
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November 21, 2023
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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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