The following report provides a monthly summary of proposed and recently enacted legislative and regulatory policy affecting the renewable energy markets in the United States. It also serves as the first iteration of a Karbone renewable energy policy commentary series. The series will be updated regularly on a monthly basis.
Last week, the Senate introduced a revised version of HB114, maintaining the RPS mandate but reducing the non-solar requirement to 8.5% and solar requirement to 0.34% by 2022, and keeping it as such before ending the program entirely in 2027. HB114 also loosens the siting requirements for wind projects, seeking to invite investors back to developing in OH.
Today, May 23, 2018, New Jersey Governor Phil Murphy finally signed Bill A3723, new legislation to support the states’ renewable energy market. The bill originally passed both houses on April 12th after initially being introduced on March 22nd. Broadly endorsed by clean energy advocates, the legislation ramps up SREC and Non-Solar Class I REC obligations with ambitious targets through the course of the next decade.
On May 8th, the Connecticut Senate approved SB 9, seeking to restructure the state’s renewable energy program. The bill includes a boost to the RPS market, an extension of the ZREC program and changes to the net-metering policy in the state. Karbone will further detail the impact of this bill on the broader NEPOOL Class I REC market in an upcoming research report.
Green-e Eligible Wind and Solar RECs have experienced price convergence recently. This price convergence marks an interesting break from the historical premium at which Green-e Eligible Solar RECs traded compared to wind, primarily due to unique revenue requirements and less installation rates. Nevertheless, recent shifts in the supply & demand dynamics for both commodities have exerted directional pressure on pricing to converge.
On April 19, the Pennsylvania PUC approved a Final Implementation Order for HB118, formally restricting the qualifications of out-of-state solar systems to meet in-state solar compliance requirements, with an exception for any contracted generation that predated the legislation, effective October 2017.
On April 3, the Illinois Commerce Commission (ICC) approved a final order that addresses several key issues of how the State will meet its ambitious renewable goals under the Long Term Procurement Plan (LTPP). The attached research brief provides an overview of the changes in the Final Order and their implications.
Arizona is setting out to diversify its fuel mix and promote more renewable energy adoption. This year, two proposals have been put forth to increase Arizona’s current Renewable Energy Standards (RES) target of 15% by 2025, which has already been met by the State’s obligated utilities.The attached research brief provides an overview of the initiatives and their challenges, as well as a cause for hope.
The PJM Tier I market tested its five-year price lows this past October before mounting a slow but impressive rebound through the first quarter of 2018. While there have been hiccups over the course of this relative recovery, the overall trajectory has been decidedly positive as underlying market fundamentals seem to making a case for forward price strength. Between low installation rates for new qualifying wind facilities, increasing RPS requirements, and ambitious clean energy legislation proposed across a number of states, there is reason to expect tightening supply/demand dynamics on the horizon. The following report details the drivers behind the recent PJM Tier I price resilience and the arguments for potential future appreciation.
The Illinois Power Agency (IPA) this month filed a final version of its Long-Term Renewable Resources Procurement Plan, building on a proposal of the plan released last October. This plan introduces a number of changes to the IL Renewable Portfolio Standard (RPS), setting ambitious goals and measures to advance the development of new renewable resources in the state.