What is a Renewable Energy Credit?
A Renewable Energy Credit (REC) generally represents the environmental and renewable attributes of renewable electricity as a separate commodity from the energy itself. A REC can be sold either "bundled" with the underlying energy or "unbundled" into a separate REC trading market.
Currently, unbundled RECs do not count for RPS compliance, though the CPUC is considering the use of tradable (unbundled) RECs within the California RPS.
DRA Position on T-RECs
DRA has consistently voiced concerns that the development of any tradable REC scheme will be a minefield for potential gaming.
T-RECs Endanger the Credibility of the California RPS
While unbundled or tradeable RECs may help utilities meet their fast approaching RPS obligations in 2010, they endanger the credibility of the RPS when the unbundled or tradeable RECs from out-of-state renewable energy facilities are attached to electricity imports from coal power plants.
Public Utilities Code Section 399.11(b) provides that the benefits of renewable energy procurement to California customers are as follows:
- Increasing California’s reliance on eligible renewable energy resources promotes stable electricity prices
- Protects California's public health
- Improve California's environmental quality
- Stimulates California sustainable economic development
- Create new California employment opportunities
- Reduce reliance on imported fuels.
DRA contends that unbundled or tradeable RECs do not provide any of the benefits stated in Public Utilities Code Section 399.11(b). DRA argues that California ratepayers should be able to examine closely the trade-offs between a utility's need to avoid RPS compliance penalties and the implications and cost of RECs.
Recent DRA Comments and Protests on RECs
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SDG&E Advice Letter 1997-E for Approval of Naturener Glacier Montana Wind Power Purchase Agreement
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Comments on the Definition of a REC
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PG&E Advice Letter 3183-E for Approval of Klickitat County Washington Wind Power Purchase Agreement