Renewable Energy Portfolio Standard
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Public ServiceCommission of the District of Columbia Report on the RenewableEnergy Portfolio Standard for ComplianceYear 2015 May 2,2016 TABLE OF CONTENTS E)(ECUTTVESI.JMMARY .............i L Introduction and Background I II. Summaryof the lmplementationof the RenewableEnergy Portfolio Standard............3 RPSRules. ...4 ComplianceRequirernentsfor Electricity Suppliers .......................4 Certificationof RenewableGenerators............... ..........5 Creationand Trackingof RenewableEnergt Credi* ....................7 Recoveryof Feesand Costs.. .......................8 Cleanand Affordable Enerw Act of 2008 .........................8 DistributedGe,neration Amendment Act of 201I ................ ...............10 RenewableEnerey Portfolio StandardAmendment Act of 2014 .......l3 m. RPSCompliance Reports for 2015..... ...................15 IV. The Availability of RenewableResources ...........20 V. Rece,ntActivity andNext Steps.......... ....................26 Attachme,ntl: RenewablePortfolio Standards in OtherStates........ .....................28 Attachmeirt 2: Selected Commission Orders and Notices on the Implementation of the RenewableEnergy Portfolio Standard....... 33 Attacbme,nt3: Map of the Certified Solar Energy Systemsinthe District of Columbia.........4l EXECUTIVE SUMMARY The RenewableEnergy Portfolio StandardAct ("REPS Act") requires the Public Service Commissionof the District of Columbia ("Commission") to annually re,portto the Council of the District of Columbia on the status of implementation of the Renewable Portfolio Standards("RPS";, including the number of renewablegenerators approved by the Commission and eligible to participate in the District's RPS program; the availability of renewableresources; and the certification of the number of credits generatedby the utilities meeting the requirementsof D.C. Offrcial Code 5 34-1432, which outlines the minimum percentagesto be derived from certainrenewable resources-and any other such information as the Council shall considernecessary. This annualreport fulfills the reporting requirement outlined in the REPSAct for the most recentcompliance year of 2015. Pursuantto the Commission's RPS rules, 33 active electricity suppliers with retail electricity salesin the District submittedcompliance reports due on April l, 2016 reportingon their RPS compliancein 2015. Thesereports show that electricity suppliersgenerally met the RPS requirementsthrough purchasing renewable energy credits ("RECs") and making compliance payments. Eighteen electricity suppliers submitted a compliance payment representingin most casesa portion of their complianceobligation. The compliancefees are deposited into the Renewable Energy Development Fund which is administered by the Disffict's Department of Energy and Environment ("DOEE"). The total amount of compliancepayments for 2015was $19,910,000,compared to $6,308,710in feesgenerated in 2014,-an increaseof more than three times the $6.3 million paid for in the 20L4 reporting year. Although the reportedretail salesdid not changesignificantly, the salessubject to the higher solar requirements under the Distributed Generation Amendment Act ("DGAA") of 20ll was 99.2 percentin 2015 comparedto 82.2 percent :rr.2014. In addition, the available capacityfrom solar energysystems certified for the District's RPS program is well below the required capacity,resulting in a shortageof qualifoing solar RECS. Other things the same, this shortageof solar capacitywill only increaseas the solar requirementcontinues to rise over time. As of December 31, 2015, there were 4,407 renewablegenerators approved by the Commissionand eligibleto participatein the District's RPS program. As of April 19,2016, there are 4,545 renewablegenerators approved by the Commissionand eligible to participate in the District's RPS program. Of the facilities approved,4,516 (99.4 percent)use Tier I resources(including biomass,methane from landfill gas,solar, and wind) and29 (0.6 percent) use Tier II resowces(i.e., hydroelectric). Since theserenewable generators may be certified in other statesthat have a RPS requirernentas well, the renewableenergy credits associated with the generatingcapacity are not necessarilyfully availableto meetthe District'sRPS. There are currently 4,395 solar energysystems (including both solar photovoltaicand solar thermal) eligible to meet the District's solar RPS requirement,of which 2,124 are locatedwithin the District. The 2,124 District RPS-eligiblesolar energysystems are located in all 8 wards in the following numbers:ward | - 265; ward 2 - 108;ward 3 -346;ward 4 :338; Ward 5 -271, Ward 6 - 381; Ward 7 -263; and Ward 8 - 152.t Outsideof the District, there are six stateswith more than 100 RPS-eligiblesolar energy systemsincluding Pennsylvania(929), Virginia (493), Maryland (221), North Carolina (156), Delaware(150), and Ohio (132). These six (6) statesaccount for roug$y 92 percentof the non-DC solar energy systemsapproved for the District's RPS program. There are also RPS-eligiblesolar energysystems in eight additionalstates. As a result of the adoption of the DGAA,2 which required all solar photovoltaic and solarthermal facilities certified by the Commissionafter January31,2011 to be locatedin the District or on a distribution feeder serving the District, the District had seen a significant decreasein the numberof solar generatorapplications for the RPSprogram. In particular,the number of applications,primarily solar, increasedfrom 461 in 2009 to 2,034 in 2010, before falling to 1,846in 2011,and 257 n 2012. However,since 2013, the decliningtrend has been reversed.The RPS applicationsincreased to 391 lr;,2013,473n2014, and7l7 in 2015. As of April 15,2016,the Commissionhas received 146 applications in 2016. The total reportedcapacity associated with the approved4,395 solar energysystems as of April 19,2016 is about 39.6 megawatts("MW'). About 19.2 MW of this capacityis located in the District. The current reported solar capacity is up from 38.8 MW of solar capacityas of December31,2015. Currently,the capacityindicated in the District is roughly in parity with the out-of-statesolar capacity that was grandfatheredinto the RPS program. This is generallyconsistent with the decreasein the retirementof out-of-statesolar RECs for the 2015 complianceyear; specifically in the 2015 complianceyear, only 56.1 percentof the RECs were from out-of-statesystems, compared to nearly 7l percentout-of-state solar RECs ' retired in the 2014 complianceyear. While the amount of DC-basedcapacity is still increasing,it is still well below the solarcapacity that is necessaryto meet the solar RPS requirementof the DGAA. That needis an estimated59.0 MW for 2015 to meet the required0.70 percentof all District of Columbia retail electricity sales and 69.9MW in 2016 to meet the required0.825 percentof all District of Columbia retail electricity sales. The enactmentof the Community RenewableEnergy Act and of legislation lifting the 5 MW cap on the size of solar installationsowned by District agenciesthat are eligible for certification have the potential to acceleratethe number of DC- basedsolar RECs that may be availableto suppliersfor compliancepurposes in the upcoming years. On the other hand, the amount of electricity supply sold by retailers in the District that is exempt from compliancewith the increasedrequirements of the DGAA is also declining significantly. The DGAA included a "grandfathering" provision that exempts electricity ' SeeAttachment 3. 2 D.C. Act 19-126 (August l, 2011). The permanent version of this legislation, the Distributed GenerationAmendment Act of 201l, becamelaw on October20,2011. SeeD.C.Law 19-0036. 3 A REC representsone megawatt-hourof electricity generation,attributable to a particularrenewable energysource. supply contractsthat were executedprior to the effective date of the legislation (August 1, 20ll), from the higher RPS requirement. As multi-year contacts have expired, the percentageof such exemptsales has decreasedfrom 96 percentin 2011 to 71 percent n2012 to 37 percentin 2013and then about l8 percentn2014. ln 2015,roughly 0.8 percentof sales were r€,portedas exempt from the DGAA requirement. For the 2016 complianceyear, the estimatedsolar capacityneeded to meet the RPS solar requirernentof 0.825 percent of sales is about 70 MW. As of April 19, 2016, the Commissionhas certified only about 39.6 Mw-including the out-of-statesystems that were grandfatheredinto the program. Thus, compliancecosts will most likely continueto rise over time.a The Commission tracks the number of renewable energy credits submitted for compliance. A breakdown of the number of RECs for 2015, submitted by fuel type, is provided in the table below: RenewableEnergy Credits Submitted fior 2015 Compliance No. of REGs Share of Tier Tier I Resource BlackLiquor 301,405 26.5o/o Itletranefrom landfill C'as 109.724 9.60/o Wind 225,40 19.8o/o Wood Waste 4,/}5,786 39.2Yo l,lon-SolarTier | (out-of-stiatesolar) 17.918 1.60/0 Solar 38.167 3.4o/a TotralTierI 1.138.480 100.0% Tierll Resource F{ydroelectic 220,528 100.0% MunicipalSolidWaste 0.0o/o TotalTierI and ll 1.359.008 The Commissionaddressed the changesthat were adoptedby the Council in the Fiscal Year 2015 Budget SupportAct of 2014 in a Notice of Final Rulemaking('NOFR') that appearedin the D.C. Register on October 30,2015. This Act amendedthe RPS statutesto allow solar energy systems larger than 5 MW in capacity located on property owned by the District, or by any agency or independentauthority of the District, to meet the solar requirement.