Electric Supplier Seeks Modification Of Maryland Offshore Wind Payment Obligation, Schedule

NextEra Energy Marketing, LLC ("NEM") filed with the Maryland PSC a Motion for Clarification, or in the Alternative Modification to clarify and/or modify the Renewable Portfolio Standard ("RPS") and Offshore Wind Renewable Energy Credits ("OREC") price schedule in conformity with § 7-704.1(f)(1)(iv) of the Public Utilities Article ("PUA"), to remove U.S. Wind, Inc.'s ("U.S. Wind") estimated OREC production from the RPS/OREC schedule to reflect the new expected commercial operation date ("COD") of the U.S. Wind project.

"Given that the next Standard Offer Service ("SOS") auction is April 13, 2020 which includes terms expected to extend through May 2023, NEM requests that the Commission act on this request on an expedited basis," NextEra Energy Marketing said

As previously reported, RESA had sought certain relief with respect to the OREC compliance schedule given anticipated delays in commercial operation. While the PSC granted relief in part (including directing a Staff review of the regulations), the Commission denied RESA's request to modify the existing OREC price schedule / RPS on November 13, 2019 as "premature", because neither Skipjack nor U.S. Wind had provided a notification of project COD delay.

NextEra Energy Marketing noted that, "Subsequently, on November 25, 2019, in Case No. 9628, (which replaced Case No. 9431) U.S. Wind filed its Annual Report, reporting a delay of its COD to '2023' from the previous date of January 1, 2021 — a delay of more than 730 days. Thus, the modification of the existing OREC price schedule is now ripe for review."

"Moreover ... although the Commission held that § 7-704.1(f)(1)(iv) of the Act clearly prohibits an OREC payment from being made 'until electricity supply is generated by the offshore wind project,' it remains unclear whether the Commission's offshore wind regulations could be interpreted to allow an appointed administrator to bill OREC purchasers for ORECs prior to project operation. Specifically, COMAR § 20.61.06.16 appears to allow qualified offshore wind projects to appoint an administrator to bill OREC purchasers for ORECs and escrow such payments. Thus, although the Commission has directed Staff to review the Commission's offshore wind regulations for inconsistencies with § 7-704.1(f)(1)(iv), in order to provide direction to SOS participants, NEM requests that the Commission clarify whether an appointed administrator may require pre-operational OREC payments -- whether escrowed or not, prior to the SOS procurement," NextEra Energy Marketing said

"In light of U.S. Wind's confirmed delay in its COD to 2023, the pending SOS auction, and the fact that the Staff review ordered by the Commission is still pending, NEM requests clarification to and/or modification of the RPS/OREC price schedule to remove U.S. Wind's estimated OREC production from the schedule in conformity with its new COD and the Act, as well as clarification of COMAR § 20.61.06.16. In the absence of such a clarification and/or modification, considerable uncertainty will remain regarding an administrator being appointed and collecting payments in the year in which the offshore wind energy RPS takes effect. Such uncertainty may cause market participants to provide offers reflecting the cost of OREC payments starting in January 2021, thereby potentially harming customers through higher pricing," NextEra Energy Marketing said