PSC Approves 15-Year Contract For 5% Of SOS

The District of Columbia PSC approved a contract with a solar facility for the bundled sale of energy, renewable energy credits (RECs), and capacity, for approximately 5% of total electric SOS load (approximately 154,000 MWh per year, which equates to 73 MW, or roughly 29%, of the solar project’s 250 MW total nameplate capacity).

The agreement, executed by Pepco and an unnamed developer, is for a term of 15 years. The project is in the PJM region

"While the Agreement does contain certain 'escalators' to address specific market risks that could increase the cost of solar modules, as well as other supply chain events and changes in law, which could impact the cost of the project, the Agreement negotiated by Pepco mitigates the potential price increases to customers by limiting any such increase to a “cap,” as specified in the Agreement, and provides for damages in the event that the renewable generator does not provide the contracted-for supply during the term of the Agreement," Pepco said in a filing

The PSC anticipates that renewable energy from the agreement will begin to serve the target quantity of five (5) percent of SOS load in December 2024.

"Based on present market conditions and a December 2024 commercial operation date, the Commission currently expects the net impact on SOS customer rates to be minimal once the full annualized effect of the Agreement is fully incorporated into SOS rates. Based on the levelized fixed and bundled price per MWh reflected in the Agreement, these costs will displace five (5) percent of the traditional annual costs for wholesale full requirements service for SOS customers. Any additional load-following expenses associated with the delivery of 154,000 MWhs of intermittent renewable energy from the solar project will also be reflected in total SOS rates. The Commission expects that any net impact on SOS rates will be proportionately shared across all SOS sales within each SOS customer class. Further, consistent with Section 4103 of the Commission’s SOS rules, parties will have an opportunity to comment on the proposed retail rates for SOS that will not only reflect the weighted average prices of the winning bids for the 95% share of SOS load but also the impact of incorporating the costs related to the five (5) percent Agreement into overall SOS rates," the PSC said

Further details on pricing and the developer were confidential