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Against the backdrop of election year politics and consideration of extension or elimination of the Production Tax Credits (PTCs), the Congressional Research Service (CRS) issued a report last week entitled, “U.S. Renewable Electricity: How Does the Production Tax Credit (PTC) Impact Wind Markets?” This report examines the possibility of an extension of the PTC, and the potential impacts such an extension (either long- or short-term) would have on the U.S. wind market. Not surprisingly, the conclusions are mixed and layered with uncertainty.

The report trumpets that 2012 will be a record year for the wind industry. Due in large part due to the pending expiration of the PTC, the U.S. wind sector deployed 10-12 GW of wind power this year—an unprecedented amount. However, all indications are that the expiration of the PTC will cause a severe market downturn in 2013 and beyond. No wonder the wind industry has been pushing Congress so hard for an extension. But does an extension make good economic sense?…

Continue Reading Economists Weigh in on the PTC Extension

My partner Seth Hilton will be presenting on Tuesday March 1st on Tradable Renewable Energy Credits in California.

Tradable Renewable Energy Credits in California
Tuesday, March 1 at 12:00 p.m. CST/ 10:00 a.m. PST

In January, 2011, the California Public Utilities Commission lifted its moratorium on the use of Tradable Renewable Energy Credits for compliance…

A legal update from our colleague Seth Hilton:

Ten months after initially authorizing the use of tradable renewable energy credits (TRECs), the California Public Utilities Commission (CPUC) today lifted its moratorium on approval of TREC transactions. CPUC Dec. 11-01-025. Today’s decision, however, retains restrictions on TREC transactions that could limit the amount of out-of-state…

From our colleagues Beverly Pearman and Jeremy Sacks:

Massachusetts Department of Public Utilities (“DPU”) has modified the two programs challenged by TransCanada Power Marketing Ltd. (“TransCanada”) in a federal law suit. TransCanada filed its complaint on April 16, 2010, alleging that portions of the Green Communities Act that were intended to increase in-state renewable energy resources were unconstitutional because they favor Massachusetts producers in violation of the Commerce Clause. The Commerce Clause generally prohibits states from enacting laws that burden out-of-state businesses in order to give a competitive advantage to in-state businesses.

The first modification came in early June as a result of settlement negotiations. Massachusetts modified the Solar Carve-Out program to grandfather in rates for Alternative Compliance Payments (“ACP”) that were contractually committed or renewed before January 1, 2010. ACP are paid by electric companies that do not hold the required amount of Solar Renewable Energy Credits (“SRECs”) that must be produced only by facilities located in Massachusetts. In exchange for this rule change, TransCanada dismissed its claims challenging the Solar Carve Out on June 9, 2010, but continued to press forward with its Commerce Clause challenge to a Request for Proposals for Long-Term Contracts for Renewable Energy Projects (the “RFP”) issued by the Massachusetts Department of Energy Resources (“DOER”) this year.…

Continue Reading Massachusetts Suspends In-State Requirement for Renewable Energy Generation and Modifies Solar Carve Out

On Thursday March 11, 2010, the California Public Utility Commission (the "CPUC") created a market for tradable renewable energy credits ("TRECs") in the state.  That’s big news.  In its 149-page decision, the CPUC stated that investor-owned utilities ("IOUs"), energy service providers, and community choice aggregators may now use TRECs to comply with California’s ambitious renewable portfolio standard ("RPS").  These entities are now permitted to purchase a portion of their RPS compliance from generation sources other than those they own (e.g., distributed solar generation facilities within the state and certain out-of-state facilities).

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Continue Reading Tradable RECs Now Count Toward California’s RPS

The California Public Utilities Commission ("CPUC") issued a proposed decision on December 23, 2009 that would, if adopted, allow California investor-owned utilities, energy service providers, and community choice aggregators to purchase renewable energy credits alone, without the associated energy (sometimes referred to as "unbundled renewable energy credits ("RECs)" or "tradable RECs"), to satisfy their obligations…