Green-e Energy would like to draw your attention to a recent development affecting the voluntary renewable energy market.

On January 1, 2008, the Texas PUC implemented docket 33492 of Substantive Rule number 25.173. Under this docket, non-wind renewable electricity facilities first operational on or after September 1, 2005, are granted both a REC and a "Compliance Premium" (CP) for each MWh generated. CPs can be bought by a Load Serving Entity to satisfy its RPS obligations, leaving the REC to be bought by another party, who may be buying the REC to make a voluntary claim outside of any RPS obligation. However, since both the LSE and the buyer of the REC are claiming the benefits of the renewable MWh, a double claim occurs.

The applicable section of the docket reads:

"(l) Target for renewable technologies other than wind power. In order to meet the target of at least 500 MW of the total installed renewable capacity after September 1, 2005, coming from a renewable energy technology other than a source using wind energy as set forth in subsection (a)(1) of this section, the program administrator shall award compliance premiums to certified REC generators other than those powered by wind that were installed and certified by the commission pursuant to subsection (n) of this section after September 1, 2005. A compliance premium is created in conjunction with a REC.

(1) For eligible non-wind renewable technologies, one compliance premium shall be awarded for each REC awarded for energy generated after December 31, 2007.
(2) Except as provided in this subsection, the award, retirement, trade, and registration of compliance premiums shall follow the requirements of subsections (d), (k) and (m) of this section.
(3) A compliance premium may be used by any entity toward its RPS requirement pursuant to subsection (h) of this section.
(4) The program administrator shall increase the statewide RPS requirement calculated for each compliance period pursuant to subsection (h)(1) of this section by the number of compliance premiums retired during the previous compliance period."

This docket is available from the Texas PUC web site, at: http://www.puc.state.tx.us/rules/subrules/electric/25.173/25.173ei.cfm

Resulting Green-e Energy Policy

In order to prevent double counting of renewable generation sold in Green-e Energy Certified products, Green-e Energy requires that for facilities meeting all four of the criteria listed below, RECs and an equal amount of CPs from the same facility are both retired. Any party, not just an LSE, may buy and retire a CP.

Criteria for policy to apply (all must be met):

• Generating facility was first operational on or after September 1, 2005
• Generating facility uses a renewable resource (as defined in the Green-e Energy National Standard) other than wind energy
• Generating facility is locating in Texas
• Generation occurred on or after January 1, 2008

This requirement applies to RECs and renewable electricity used as supply for either 2007 or 2008 Green-e Energy Certified sales. This policy is effective immediately and will remain in effect until further notice.

This requirement allows the buyer of both the REC and the CP to make a full renewable energy claim about the particular MWh of generation. The REC and the CP must both meet the Green-e Energy vintage requirements for the year of sale, though you are not required to procure and retire a REC and a CP that were actually generated simultaneously.

RECs and CPs will be minted and tracked in ERCOT, once the first quarter of generation is reported in generators' ERCOT accounts. Retirement or transfer of RECs and CPs must be substantiated through ERCOT reports and Tracking Attestations by following the methodology laid out in Requirements for Using Tracking Systems in Green-e Energy Annual Verification. This Green-e Energy document is available through the Green-e Energy Verification page of the Green-e web site and was sent to contacts at each company particpating in Green-e Energy as part of a verification email sent in February.

Green-e Energy has made this decision based on discussions with a number of involved parties, all of whom agreed that this policy addresses the issue appropriately and reasonably. The EPA Green Power Partnership shares the same stance on how to address non-wind Texas RECs in the voluntary market.

Please contact Green-e Energy staff at 415-561-2100 or info [at] green-e [dot] org if you have any questions about this policy.

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