Maryland PSC Renewable Portfolio Standard

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Maryland PSCRenewable Portfolio Standard

Kevin Mosier 410-767-8926

kmosier@psc.state.md.us

Michael Lee, Directormlee@psc.state.md.us

Integrated Resource Planning DivisionMaryland Public Service Commission

http://www.psc.state.md.us

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Presentation Outline

• RPS Overview

• Supplier Obligations

• Statistics from the MD RPS Program

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Establishment of RPS Program

• 2004 General Assembly Session• Legislation: Electricity Regulation - Renewable

Energy Portfolio Standard and Credit Trading - Maryland Renewable Energy Fund

• Public Utility Companies Article: Subtitle 7. Renewable Energy Portfolio Standard

• RPS continues to be modified through Legislative changes– (e.g., new solar tier, ACP doubled; geographic scope reduced)

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RPS Overview

• Requires certain standards to be met by the accumulation of renewable energy credits

• Requires electricity suppliers to submit a report each year to the Commission

• Requires electricity suppliers to pay compliance fees if the RPS standards are not met

• Establishes a Maryland Strategic Energy Investment Program to be administered by the Maryland Energy Administration subject to recommendations from the Strategic Energy Investment Advisory Board

• Requires the Commission to establish and maintain a renewable electricity trading system that includes registration of renewable energy facilities: Maryland uses GATS

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Tier 1 Renewable Sources

• Solar (Tier 1 Solar)• Wind• Qualifying biomass• Methane from the

anaerobic decomposition of organic materials in a landfill or wastewater treatment plant

• Geothermal • Ocean

•A fuel cell that produces electricity from a Tier 1 renewable source

•A small hydroelectric power plant of less than 30 megawatts in capacity that is licensed or exempt from licensing by the FERC

•Poultry litter-to-energy

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Tier 2 Renewable Sources

• Hydroelectric power other than pump storage generation

• Waste-to-energy

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REC Prices

• Prices of non-solar RECs vary, but typically range between $0.25 and $2

• Prices for solar RECs are much higher

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Supplier Obligations

• Meet RPS Standards; or

• Make Alternative Compliance Payments;

&

• File RPS Annual Supplier Report

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RPS Requirement Changes

• Tier 1 is 2% in 2009 and increases to 18% in 2022 and on

• Tier 1 solar is 0.010% in 2009 and increases to 2% in 2022 and on

• Tier 2 is 2.5% and the Tier 2 requirement ends in 2019

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Annual RPS Requirements

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Compliance Fee

• Companies that do not meet the RPS requirement must pay a compliance fee

• The fees vary by year and type– Tier I: $20 per MWh in 2008 to 2010; $40 thereafter

– Tier I Solar: falls from $450 in 2008 to $50 per MWh in 2023

– Tier 2: $15 per MWh throughout

– Tier 1 for Industrial Process Load: falls from $8 per MWh in 2008 to $2 per MWh in 2017 and thereafter

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Annual Compliance Fees

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2008 Compliance Fees

• Of $1,005,495 in compliance fees owed in 2008, 98 percent was from solar requirements

• The majority of the companies met their non-solar Tier 1 and Tier 2 requirements by submitting RECs

• Almost all companies paid some amount of compliance fees

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RPS Annual Supplier Reports

• Required from all licensed utilities, suppliers, and brokers

• Due by April 1 each year

• Both brokers and supplier without sales must still file

• Must provide the total price of all Tier 1, Tier 1 Solar, and Tier 2 RECs

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Step-by-Step Instructions for Accessing Supplier Reports

• Commission’s home page is located at:

www.psc.state.md.us

• The “Resources” column at the home page contains a “Renewable Portfolio Standard Documents” link which contains several documents pertaining to the MD RPS Program

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RPS Website

• Applications:– Certification as a Renewable Energy Facility

(non-solar)– Solar Renewable Energy Facility application– Waiver of Compliance Fee

Accessible:http://webapp.psc.state.md.us/intranet/electricinfo/home_new.cfm

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RPS Website (cont’d)

• Help and Direction:– RPS statute and regulations

– Frequently asked questions

– Filing instructions

• Maryland PSC Reports:– Compliance Fee Remittance Report

– Marketed Renewable Electricity Sales Report

– On-Site and Behind-the-Meter Generation Report

– Yearly RPS Supplier Annual Report

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Purpose of Supplier Reports

• Reporting

• Auditing

• Analysis

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Non-Compliance Letter

• Issued June 10, 2009

• Directs suppliers that have not submitted the annual RPS report to respond and show cause as to why the Commission should not:– Suspend or revoke Maryland license– Assess civil penalty

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RPS Results to Date

• Number of RECs RetiredYear 2006: 1,875,943Year 2007: 1,936,248Year 2008: 2,683,619

• Compliance Fees PaidYear 2006: $38,209Year 2007: $36,374Year 2008: $1,005,495*

*Some companies have yet to submit all outstanding payments.

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REC State of Origin2008 Maryland Compliance RECs by Facility Location

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Tier 1 RECs Retired in Maryland by Fuel Type (2008)

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Tier 2 RECs Retired in Maryland by Fuel Type (2008)

Hydroelectric85%

Municipal Solid Waste

15%

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Supplier Obligation Review

• Meet RPS Standards; or

• Make Alternative Compliance Payments;

&

• File RPS Annual Supplier Report

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QUESTIONS AND COMMENTS

Kevin Mosier

410-767-8926

kmosier@psc.state.md.us

Michael Lee, Directormlee@psc.state.md.us

Integrated Resource Planning Division

Maryland Public Service Commission