On the back of significant bipartisan lobbying regarding the advantages and disadvantages of biomethane as an RPS resource under the new RPS Senate Bill SBX2, on March 28th 2012, the California Energy Commission held a workshop to consider the suspension of the RPS eligibility guidelines related to biomethane. The suspension would apply to power plants that are currently RPS certified or pre-certified to use biomethane and those that are not.
Pricing in the CT Class 1 REC markets have retreated on the back of impending policy developments. Connecticut Senate Bill (SB) 450 contains a proposal supporting the development of Micro-Grids, providing for Combined Heat and Power (CHP) generation to qualify as Class 1 Renewable Energy Credits (RECs). Micro-Grids are defined as small-scale localized grids located in the state of CT. CHP is currently classified as a CT Class 3 REC. Ahead of this news, Class 3 RECs were well offered, with value pegged just above the market floor of $10.
On December 15th 2011, the CPUC unanimously approved the proposed decision implementing portfolio content categories for the renewables portfolio standard program. This much awaited decision is one of the critical components that will help shape the market for retail sellers mandated under SBX2 (1X) which became effective December 10, 2011.
The NEPOOL Class I market has been characterized by strong development that enabled the states to meet them obligation and bank additional RECs. However, Massachusetts (MA) and Connecticut (CT) have lagged with in state development.
With a new Governor in office, Senators Simitian, Kehoe and Steinberg are attempting to legislate the ARB’s executive order to extend the CA RPS, such that California utilities and retail electric sellers would need to provide 33% of electricity sales from renewable sources by 2020. The most recent attempt to undertake this (SB 722) narrowly missed getting passed in 2010. This new piece of legislation largely mirrors the previous bill’s parameters with portfolio content categories, also known as buckets, for classifying RPS renewable resources and limiting the quantities for each of the types.
On March 11 2010, after much anticipation, the CPUC adopted decision 10-03-021 to allow for the use of tradable renewable energy certificates (TRECs) as a compliance commodity to help IOUs and ESPs meet their RPS mandated target. The decision, while enabling TRECs, limited their volumes to 25% of RPS and capped prices at $50 per TREC, until December 31, 2011.