PPL Reaches Settlement on Long-Term SREC Contracts for Default Service

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November 24, 2010

PPL Electric Utilities, the Office of Consumer Advocate, the Office of Small Business Advocate and several other parties have submitted a settlement that resolves all but one issue regarding changes to the procurement of solar RECs (SRECs) for PPL's residential default service customers (P-2008-2060309).

The stipulation would allow PPL to amend its current default service plan to procure a portion of its SRECs required under the Alternative Energy Portfolio Standards Act over a long term delivery period, with such SRECs offsetting those required from the full requirements suppliers (see 5/25).

PPL would use an RFP process to purchase long-term SRECs to meet the SREC requirements of residential customers based upon the purchase of 3,000 SRECs per year, resulting in target quantities of 27,000 SRECs for Solicitation 1 (a delivery period of 9 years), 24,000 SRECs for Solicitation 2 (a delivery period of 8 years), and 21,000 SRECs for Solicitation 3 (a delivery period of 7 years).

An independent RFP Manager would submit a confidential solar market benchmarking analysis to the Commission prior to each SREC bid closing date.

In addition to the SREC RFP procurement amounts, additional SREC amounts will be set aside for procurement on a bilateral contract basis from solar systems with a DC rating of 15 kW or less.

The set aside amount shall be equal to 1,000 SRECs for the 9-year term, 1,100 SRECs for the 8-year term and 1,600 SRECs for the 7-year term.

Solar systems with a DC rating of 15 kW or less that desire to participate in the set aside shall be required to contract with a solar aggregator, which shall in turn contract with PPL Electric.

The price to be paid to solar aggregators under the set aside shall be equal to the average SREC price for the applicable SREC RFP, which shall be deemed to include any administrative fee retained by the solar aggregator.  The solar aggregator may retain an administrative fee not greater than 10% of the bid price for each SREC.

The single issue left to litigation concerns whether solar aggregators under the small system set aside program should be required to certify that they have long term contracts for solar Tier I renewable energy credits.

SREC procurements for non-residential classes would not be modified.

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