Regulator Addresses Cost Recovery of Long-Term Contracts, Application To Default Service

The Massachusetts DPU approved wind energy generation and REC procurement contracts between the electric distribution utilities and Vineyard Wind LLC

In doing so, the DPU addressed cost recovery for such products

The EDCs proposed to sell the renewable energy procured under the PPAs through the ISO-NE wholesale market and to credit or charge the difference between the wholesale market revenues and the contract costs to each company’s distribution customers. In addition, the EDCs propose to use the RECs procured pursuant to the PPAs to satisfy the RPS and CES requirements associated with their basic service offerings. If RPS or CES obligations for Class I RECs fall below the aggregate level of Class I RECs already under contract, the EDCs propose to sell excess RECs into the market and credit all distribution customers the difference between the PPA price and the sales price

"After review, the Department finds that the Companies’ proposed treatment of energy and RECs to be purchased under the PPAs is consistent with Section 83C and 220 CMR 23.06," the DPU said

"Further, the Department finds that the Companies’ proposed method to recover costs related to the PPAs is consistent with Section 83C and will result in just and reasonable rates pursuant to G.L. c. 164, § 94. Under the PPAs, the Companies will incur the same types of costs as those incurred for Section 83 and Section 83A contracts. Therefore, the Department finds that it is appropriate for the Companies to amend their existing LTRCA [long-term renewable contract adjustment] tariffs to include the recovery of the costs associated with long-term contracts procured pursuant to Section 83C," the DPU said

D.P.U. 18-76 et al.