An Overview of State Renewable Portfolio Standards

Colin Hagan, JD 2012

Research Associate

Institute for Energy and the Environment, Vermont Law School

Chagan@vermontlaw.edu

864-982-2536

What is an RPS?

Mandate to increase the use of renewable energy resources

Also called RES, REPS, etc.

30 States + D.C.5 States with voluntary goals

Major factor for growth in renewable energy generation

Source: Union of Concerned Scientists, RPS Toolkit

How Does an RPS Operate?

Statute sets target for retail electricity providers (IOUs, COOPs, MUNIs, etc.) Targets increase according to statutory schedule Renewable Electricity Credits (RECs) issued for each unit of electricity generated from eligible sources; obligated utilities turn in credits for compliance Enforcement through Alternative Compliance Payment, administrative fee or as condition for licensing

Key Elements: RPS Target Target defines electricity providers’ obligation to generate electricity from renewable energy resources EIA estimates that States will meet established targets

Does the target help predict where new renewable energy capacity will be built?

Source: Lawrence Berkeley National Laboratory, Oct. 2010

Key Elements: Eligible Resources

Defines which renewable energy resources can be used to comply with RPS. Eligible resources by the numbers: - Wind: 30 States - Hydro: 28 States (Excluding IA, WI) - Solar: 30 States - Geothermal: 23 States (Excluding IL, IA, KS, MN, MO, NY, PA) - Biomass: 30 States - Wave/Tidal: 15 States - Landfill Gas: 26 States (Excluding MN, NV, RI, AZ) - Solid Waste: 13 States - Efficiency: 10 States Definitions vary significantly

Key Elements: Eligible ResourcesUnclear Definitions Invite Litigation

NC eligible resources include “a biomass resource, including agricultural waste, animal waste, wood waste, spent pulping liquors, combustible residues, combustible liquids, combustible gases, energy crops, or landfill methane” (N.C. Gen. Stat. § 62-133.8(a)(8)). Duke Energy seeks to register a facility that co-fires whole trees derived from primary forest harvest.

NC Environmental Management Commission finds that the definition “allows for a range of interpretations as to what the legislature intended to include as a biomass resource . . . .” (See NC EMC, Evaluation of Natural Resource Impacts of the Woody Biomass Industry in North Carolina, March 2010). Conservation group challenge Duke’s request; NCUC grants Duke’s request.

Source: LBNL, 50 MW biomass facility in Burlington, VT

Key Elements: Incentives

States use incentives to achieve local benefits and diversify renewable resources

- REC multipliers

- Carveouts or set-asides

Source: Lawrence Berkeley National Laboratory, Oct. 2010 State incentives have contributed to growth of renewable energy capacity in certain areas but pose significant challenges

Constitutional challenges to some incentives for local generation

Alternative Compliance Payment

Punitive or persuasive?

18 States + DC have ACP, fine or PUC authority to establish

Are solar ACPs sufficient to make the resource cost effective?

State ACP/Fee SACP SourceCA $0.05/kWh

DE

$25/MWh; $50/MWh in 2nd year; $80/MWh in 3rd year

$400/MWh; $450/MWh; $500/MWh

26 Del. C. § 358(d) & (e).

DCTier I: $0.05/kWh; Tier II: $0.01/kWh $0.50 (ends 2018)

D.C. Code § 34-1434

IL2009: $0.645 - $0.764/MWh 2010: $0.211 - $0.256/MWh

220 ILCS § 5/16-115D

ME $60.93/MWh35-A M.R.S. §3210(9)

MDTier I: $0.02/kWh; Tier II: $0.015/kWh

2010: $0.40/kWh; 2011-12: $0.35/kWh; 2013-14: $0.30/kWh; 2015-16: $0.25/kWh; 2017-18: $0.20/kWh; 2019-20: $0.15/kWh; 2021-22: $0.10/kWh; 2023+: $0.05/kWh

MA$58.58/MWh in 2008 (adjusted annually)

NH

Class I: $60.93/MWh; Class II: $160.01/MWh; Class III: $29.87/MWh; Class IV: $29.87 NH Code §362-F

NJN.J.A.C. § 14:8-2.10

NV

Utilities: At least the difference bewteen average cost of kWh of renewable electricity and average cost of kWh of conventional electricity NAC § 704.8881

NCNone; PUC has authority to establish

OH $45/MWh (minimum)

$450/MWh in 2009 declining to $50/MWh in 2024+

OH PUC 4909:1-40-08

OR $50/MWh (set by PUC) ORS 469A.180

PA $45 per credit needed200% ave. market value of solar RECs 73 P.S. § 1648.3

RI $50/MWhCRIR 90-060-015

TXNone; PUCT has authority to establish ACP H.B. 1090

WA $50/MWhWAC 480-109-050

WI None; possible finesWis. Stat. 196.378(5)

WV None; PSC to establish in 2015WV Code § 24-2F-1

Minimum must be higher than estimated competeitive market cost of 1) cost of RECs/SRECs or 2) installing/purchasing the required renewable energy

Federal RPS?

Recent action in the U.S. Senate - American Clean Energy Leadership Act (S. 3813) - Clean Energy Standard Act of 2010 (S. 20)

Pay attention to: - federal preemption - eligible resources - ACP could present procedural challenges - Mid-term election results will affect ability to pass in lame duck session or next year

Source: National Renewable Energy Laboratory, Feb. 2009