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PSC Won't Provide Automatic Approval Process For Retail Supplier Green Power Offers Which Are Below PSC-Set Rate, As PSC Chair Wants "A Little More Control" Over Supplier Applications
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The Maryland PSC won't create an automatic approval process for generic green power offers within certain price limits, as the PSC approved, for publication in the state register, rule language for new regulations governing the offering and marketing of green power offers
The PSC's order today initiates a public comment period with the publication of the proposed rules in the state register. Final approval is still required; however, the language to be published by the PSC generally represents a consensus among stakeholders, in light of Commissioners' stated positions on outstanding issues
Notably, the PSC today struck, from the rule language to be published in the register, proposed provisions that would have granted automatic approval for certain supplier green power offers
SB 1 only allows retail suppliers to sell "green power" to residential customers at either: 1) a price set by the PSC generically, or 2) a price established through a company-specific petition from a retail supplier (all discussion of green power in this story is limited to residential service except where noted otherwise)
Under the implementation of SB1, retail suppliers must be specifically approved by the PSC to offer green power to residential customers. This required approval is separate from the need to obtain a retail supplier license
Under such green power approval process, the supplier must, in order to offer green power, first receive approval from the PSC for the supplier's rate under the supplier's green power offer. As previously reported, the PSC is to establish a generic price for green power offers, with suppliers able to individually seek approval for a rate which differs from the generic rate
Proposed rules would have, under certain circumstances, automatically approved a retail supplier's application to offer green power
Specifically, proposed language would have provided that, if the supplier's green power offer has a rate below the generic green power rate set by the PSC (or, if no generic green power rate has been adopted by the PSC, the supplier's offer has a rate that is below the 12-month trailing average SOS rate), then such supplier's green power application would have automatically been deemed approved upon filing with the PSC. The proposal would have allowed the PSC, within 7 days of such application, to set a procedural schedule to halt the automatic approval, but with automatic approval still being granted if the PSC did not substantively address the application within 30 days
Separately, proposed language would have also provided that a supplier's green power application for a rate in excess of the PSC rate (or SOS-based rate) would have been approved if the PSC did not act on the application within 45 days
The PSC struck both of these automatic approval provisions from the rule language to be published in the register
Chair Frederick Hoover said that automatic approval is not appropriate given the novelty of the application process for green power offers. Hoover wanted to err on the side of caution and have "a little more control" over the application process in the initial implementation
Commissioner Bonnie Suchman noted that suppliers may raise the issue of automatic approval after the PSC gains experience with the green power application process
The only non-consensus matter remaining in the rulemaking related to a proposed rule concerning the reporting and the retirement of RECs, or other green attributes, for any part of a green power offer whose source is not eligible for Maryland's RPS
This rule essentially implicates what types of green power will be allowed, and what power or RECs are eligible to be green power
Statute requires that 51% of a residential green power offer shall rely on resources or RECs that are eligible for the Maryland RPS. There is an open question as to what may be used for the remaining 49% of a green power offer, particularly if the supplier wishes to offer 100% green power, with possibilities including allowing the use of: (1) non-green power (with issues related to system power hinging on pricing as opposed to the use itself), (2) green power that doesn't meet the state's RPS and which can't be retired in PJM GATS (which generally would mean national RECs), (3) RECs which can be retired in PJM GATS but which don't meet the Maryland RPS (if such RECs exist), or (4) Maryland RPS-eligible RECs (see discussion here)
The PSC elected to strike proposed rule language governing any reporting or retirement obligation related to any green power not eligible for the Maryland RPS that may potentially be used for green power offers, as the Commission said that an order on what RECs and sources will be eligible for inclusion in a green power offer will be addressed in a forthcoming order (presumably an order on green power pricing in Case 9757)
The struck language had stated, "A supplier shall document, in a manner chosen by the Commission, the amount of
renewable energy credits associated with residential electricity marketed as renewable or
green, and that do not qualify as renewable energy credits as defined in Public Utilities
Article § 7–701, Annotated Code of Maryland."
During a rulemaking session today (Dec. 19), PSC Staff said that, if national RECs are permitted, the proposed rule language is necessary in order to require suppliers to report retirements to facilitate PSC review of supplier offers and compliance
Suchman, who was acting as chair for the rulemaking session as Hoover joined remotely, said, "This will be addressed in the pending order."
Without elaborating on how the PSC may dispose of the issue of what RECs qualify for inclusion in a green power offer above the 51% linked to Maryland RPS eligibility, Suchman said that the struck rule language is, "not necessary".
While one potential decision, which would make the relevant proposed rule language unnecessary, could be that national RECs will not be allowed (making the proposed language moot), the PSC could potentially also accomplish the desired reporting of non-GATS retirements via a directive in a PSC order, outside of the rule, and thus observers should be cautious about assigning intent to Suchman's statements.
Additionally, notwithstanding the statement that the PSC's pending order will address eligibility for green power, the PSC still adopted language which, on its face and due to how SB1 is structured, reads as requiring that any RECs used for "green power" -- not only the 51% of a green power offer which must meet Maryland RPS eligibility -- must be retired in PJM GATS, thus ostensibly making national RECs, or similar, ineligible for being marketed as "green power" (which would include a prohibition on calling a product 100% "renewable" or 100% "green" if all RECs are not retired in PJM GATS), though such an outcome may not be the intent of the PSC in adopting the language
The language, which readers can judge for themselves, states, "A supplier shall retire, in a PJM Environmental Information Services, Inc. Generation
Attribute Tracking System reserve subaccount where the Subaccount Name is labeled 'Green
Power' and accessible by the Commission, one renewable energy credit for each megawatt-hour
(MWh) of retail sales of electricity marketed to residential customers as 'green power' as
defined in Public Utilities Article § 7-707, Annotated Code of Maryland."
Under SB1 and Public Utilities Article § 7-707(a), "green power" is defined as, "energy sources or renewable energy credits that are marketed as clean, green, eco–friendly, environmentally friendly or responsible, carbon–free, renewable, 100% renewable, 100% wind, 100% hydro, 100% solar, 100% emission–free, or similar claims."
Adopting consensus language, the PSC did affirm that an obligation under the rule to retire, in PJM GATS, RECs for green power offers shall apply only to residential green power offers, clarifying earlier language which could have been read as mandating that non-residential green power offers must have RECs retired in PJM GATS, which would have limited the states from which suppliers could source RECs for non-residential green power offers (see discussion here)
The PSC otherwise generally adopted for publication, as proposed in a consensus draft, rules governing: supplier applications to offer green power plans, disclosure requirements for green power plans, and retirement obligations related to green power plans
A full discussion of these consensus rules is here. The discussion from our prior linked story reflects the rules approved today for publication, unless otherwise indicated in the above discussion in this story
The rules do not address the rate cap for green power plans, which is being addressed in a separate proceeding (Case 9757)
RM84, RM 84
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PSC Says Green Power Eligibility (Use Of National RECs) To Be Addressed In Forthcoming Order, As Rules Adopted Today
December 19, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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