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PSC Staff's Draft Rule Could Be Read As Applying Residential "Green Power" Definition, GATS Requirement To C&I Sales
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A draft set of rules from Maryland PSC Staff to implement SB 1's new green power marketing laws could be read as requiring all "green power" plans in Maryland, not only those for residential customers, to use RECs tracked via PJM GATS
As previously reported, SB 1 only allows retail suppliers to sell "green power" to residential customers at either: 1) a price set by the PSC generically, or 2) a price established through a company-specific petition from a retail supplier
Under SB1, "green power" is defined as, "energy sources or renewable energy credits that are marketed as clean, green, eco–friendly, environmentally friendly or responsible, carbon–free, renewable, 100% renewable, 100% wind, 100% hydro, 100% solar, 100% emission–free, or similar claims." [Public Utilities Article § 7-707(a)]
While most of Staff's draft generally follows SB1, notable is a proposal from Staff to implement an SB 1 provision concerning the use of GATS
SB 1 provides that RECs specifically used in compliance with the residential "green power" law shall be retired in GATS
However, Staff's draft would require retail suppliers to retire in GATS one REC per each MWh marketed as green power, "as defined in Public Utilities Article § 7-707(a), Annotated Code of Maryland." [emphasis added]
§ 7-707(a)'s definition of "green power" is the green power definition quoted above
Nothing in the § 7-707(a) definition of "green power" limits the term to residential sales
Rather, it is § 7-707(b) and following subsections which limit the applicability of SB1's relevant green power provisions (including the definition contained in the section) to residential sales (with § 7-707(b) excluding "commercial" customers and with other provisions specifically stating "residential").
However, by broadly citing to the definition in § 7-707(a), which does not define "green power" as specifically relating to residential customers, Staff's draft could be read as requiring that all products which are marketed using the term "green power" (including C&I sales) must have RECs retired in GATS.
This requirement, if intended, is not mandated by SB1 for C&I customers
A GATS retirement requirement would limit the source of RECs allowed to be used for C&I plans marketed as "green power" (including those marketed under the terms/descriptions noted in the green power definition quoted above)
GATS generally covers the PJM region
While GATS does allow for imported RECs to be recorded in GATS, GATS limits the type of RECs which may be imported from outside of PJM for inclusion in GATS.
Specifically, in GATS, certificates will
only be created for imported RECs if 1) the generator has been pre-qualified by one of the PJM states for its RPS
program, and 2) the state has approved the creation of certificates
Thus, barring further refinement to the meaning of the term "green power" under the specific provision of Staff's draft rule cited above, Staff's proposal could be read as limiting the type of RECs which may be used for C&I "green power" plans
In the current rule, for activity in addition to RPS, retail suppliers need only retire RECs in GATS for electricity supply marketed as, "having characteristics of a Tier 1 renewable source or a Tier 2 renewable source."
Staff's draft rule would establish a process for retail suppliers to apply at the PSC for approval of a green power rate other than the generic, market-wide rate(s) adopted by the PSC
Staff's proposed rules would require that such retail supplier applications for individual residential green power products shall include, among other things,
• A description of the price a customer will pay, as it will appear on the customer contract
• Information regarding the type of RECs being retired as part of the green power offering, including:
a. Fuel type
b. Year generated
c. Proof of current market price of similar RECs
• A description of the electricity being marketed as green power, including the green power source and percentage of the electricity that is green power
• A description of how the green power complies with state law and regulations
As previously reported, the PSC's market-wide price for green power may exceed the otherwise applicable price cap for retail supplier sales
Through a supplier-specific application, the PSC may authorize a retail supplier's individual green power rate to exceed the otherwise applicable price cap only where the supplier has shown, among other things, that its costs for the green power exceed the cap
Consistent with SB1, Staff's draft would provide that retail suppliers marketing green power to residential customers shall disclose:
(a) what the customer will actually be paying for when the customer purchases green power from the electricity supplier;
(b) how the electricity that the customer has purchased is generated;
(c) how the green power will benefit the environment;
(d) the percentage of electricity that would be provided by the electricity supplier that is eligible for inclusion in meeting the renewable energy portfolio standard;
(e) the state in which the electricity was generated; and
(f) the following statement: "We deliver energy through the purchase of Renewable Energy Credits (RECs). A REC represents the social good that accompanies 1 megawatt-hour of renewable electricity generation. RECs may be sold separately from renewable electricity itself. Renewable electricity and RECs may be sold to different entities. The purchase of a REC does not indicate that renewable electricity itself has been purchased by the entity that purchased the REC."
Staff's draft would not apply any of the new green power rules to any PSC-approved green power product marketed by a utility providing SOS.
SB1 also excludes municipal aggregations from the statutory green power requirements
Rulemaking RM 84
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September 9, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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