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PSC Clarifies Allowable RECs For Green Energy Products
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The Maryland PSC has issued an order clarifying the types of RECs which are permitted to be used to offer a green energy electricity product to residential customers in Maryland
As previously reported, 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
Under SB1, "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." [Public Utilities Article § 7-707(a)]
SB 1 mandates that, for residential customers, a retail supplier may not market a product as "green power" unless, among other things, the product includes green energy or RECs, both of which must meet the standards to qualify for use in Maryland's RPS, in an amount that equals or exceeds the higher of the following: (1) 51% of the product's supply, or (2) is at least 1% higher than the RPS which is applicable in such year
The PSC recently established the generic price cap for green power offers
See info on the price cap here
In doing so, the PSC also addressed REC eligibility for green power products
As previously reported, a prior PSC order establishing the acceptable generic green power product, "directs retail electric suppliers to retire all RECs composing an approved green product, 51% and above, into a PJM tracking system accessible by the Commission."
While such language indicated that the PSC is prohibiting the use of any RECs that cannot be retired into a PJM GATS account accessible by the Commission (ostensibly limiting RECs to Maryland RPS eligible RECs) -- even for the part of the product above the 51% -- the PSC had also ordered retail suppliers to use the following disclosure as part of offering green power products: "In your contract, [X]% of the RECs qualify for Maryland’s renewable portfolio standard. The remaining [Y]% of RECs are [the specific product being marketed]."
In seeking clarification, the Office of People's Counsel observed that the second sentence in this language is not needed if the PSC's intent is that only Maryland RPS RECs can be used in green products
See more background here
In an order issued today, the PSC, "restates and
further clarifies that all retail electric suppliers are directed to retire all RECs comprising
an approved green product into a PJM tracking system accessible by the Commission." [while the PSC's language does not include the term residential, given the nature of SB1 and the term "approved" green product, this direction is limited to residential service]
In light of this holding, the PSC struck the above-cited disclosure which had suggested that non-Maryland RPS RECs may be used
"In light of the clarification provided above, the Commission removes the language,
'The remaining [Y]% of RECs are [the specific product being marketed],' from the
disclosure required in accordance with PUA § 7-707(f) and (g)," the PSC said
The PSC will instead require suppliers to use the revised disclosure below:
The electricity delivered to your home is generated from a
variety of sources, both renewable and nonrenewable.
Energy from renewable resources, such as wind and solar,
cannot be tracked directly into your home. Instead, the
energy your home uses will support renewable energy
sources through the purchase of renewable energy credits
(“RECs”). A REC represents the environmental and social
good associated with 1 megawatt hour of renewable
electricity generation. RECs may be sold separately from the
electricity itself, so the buyer of a REC may be different than
the buyer of the electricity. In your contract, [X]% of the
RECs qualify for Maryland’s renewable portfolio standard.
By purchasing RECs that qualify for Maryland’s renewable
portfolio standard, you are supporting renewable energy
development in the region. Increased demand for, and
generation of, renewable electricity can help reduce
conventional electricity generation from fossil fuels in the
region where the renewable electricity generator is located.
It may also have other environmental benefits such as
reducing regional air pollution.
Addressing retail suppliers' concerns about the process that the PSC used to set the initial green power rate, the PSC again reiterated that the initial proceeding was meant as a low-risk starting price point, that nothing prevented suppliers from offering evidence from subject
matter experts on applicable market data, that suppliers remain free to seek a supplier-specific green price, and that future annual green price proceedings, "will allow the Commission and interested
parties to review and adjust in accordance with lessons learned, price fluctuations, and
market indicators."
Case 9757
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March 4, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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