SUMMARY

Regional Greenhouse Gas Initiative Brief

Ten states in the Northeast and Mid-Atlantic ( Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont) have agreed to take part in the Regional Greenhouse Gas Initiative (RGGI), a regional cap-and-trade program for greenhouse gas emissions arising from the electricity sector in those states, commencing January 1^st, 2009.  In response, Green-e Energy is updating program rules governing:

1)      the requirements for certification of renewable energy sales made within RGGI states, and

2)      the eligibility of renewable energy generated in RGGI states but sold outside of RGGI states. 

These Green-e Energy rule changes are listed below, and go into effect for Green-e Energy Certified sales starting January 1, 2009.  Because RGGI policies are enforceable by law, Green-e Energy can not offer grandfathering of any affected Green-e Energy rules.  This document is a summary of the Green-e Energy rule changes.  Please see the attached Policy Update for a more detailed description of all the rule changes.

Green-e Energy Policy Changes

1.                  Effective January 1, 2009, renewable energy from eligible generators located in RGGI states (including Delaware) can only be Green-e Energy Certified if sold to end use customers located in the nine RGGI states that have voluntary renewable energy set-aside provisions (all RGGI states with the exception of Delaware).  Such customers may still purchase Green-e Energy Certified renewable MWhs generated outside of RGGI states. 

2.                  Green-e Energy will no longer certify wholesale transactions of renewable MWhs generated in RGGI states.

3.                  Renewable MWhs sold in Green-e Energy Certified transactions must meet the eligibility definitions determined by both the state of the sale and the Green-e Energy National Standard.  In the case where one set of rules is more stringent than the other, the more stringent rules must be followed.  A summary of these rule changes is included in the table below.

Summary of Resulting New Green-e Energy Rules

State	New Date for retail sales in state	Renewable Resources Eligibility	Geographic Eligibility	Where MWhs Can Be Sold Generated in State	Other Rules and Restrictions
Connecticut	Jan. 1, 1997	No ocean resources	Green-e Energy National Standard	RGGI states other than DE
Delaware					Ineligible
Maine	Sept. 1, 2005	100 MW and under only; no ocean resources	Green-e Energy National Standard	RGGI states other than DE	Tracking Systems must be used where available in ME
Maryland	Not yet finalized	Resource definitions not finalized	Not yet finalized	RGGI states other than DE
Massachusetts	Dec. 31, 1997; no pre-1997 vintage waivers	Hydro over 25 MW ineligible; wood must be waste wood; behind-the-meter restrictions; no ocean resources	The electricity generated with RECs must be imported into ISO-NE with the RECs	RGGI states other than DE
New Hampshire	Jan. 1, 1997	No solar hot water heating; no methane; no Class III or IV renewables; no ocean resources	Green-e Energy National Standard; may require electricity import like MA	RGGI states other than DE	Some rules still not finalized.
New Jersey	Jan. 1, 1997	No ocean resources	Green-e Energy National Standard	RGGI states other than DE
New York	Jan. 1, 2003	Run-of-the-river hydro over 5 MW must be LIHI certified; no ocean resources	Green-e Energy National Standard	RGGI states other than DE
Rhode Island	Jan. 1, 1997	No ocean resources	Green-e Energy National Standard	RGGI states other than DE
Vermont	Not yet finalized	Resource definitions not finalized	Not yet finalized	RGGI states other than DE

The US EPA hosts a broader summary of RGGI state information, which is available here: http://www.epa.gov/greenpower/documents/events/rggi_status_table.pdf

Additional Issues Pertaining to RGGI and Green-e Energy Policies

Verification and Reporting Timing
Each RGGI state has developed its own timelines for compliance with its voluntary renewable energy set-aside provision.  Green-e Energy is monitoring these state deadlines as they are announced and will develop verification protocols and deadlines for 2009 Green-e Energy Certified sales reporting accordingly.

Full Policy Update

Regional Greenhouse Gas Initiative Summary

Ten states in the Northeast (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont) have agreed to take part in the Regional Greenhouse Gas Initiative (RGGI), a regional cap-and-trade program for greenhouse gas emissions arising from the electricity sector in those states, commencing January 1^st, 2009.  Green-e Energy would like to notify all program participants that RGGI policies will affect sales of renewable energy made within RGGI states, as well the eligibility for Green-e Energy Certification of the sale of renewable energy generated in RGGI states but sold outside of RGGI states.

The Green-e Energy National Standard currently requires that bundled renewable electricity and unbundled renewable energy certificates (RECs) (collectively "renewable MWhs") contain their full CO₂ emissions reduction benefits. In a region where the emissions from the electric power sector are capped, certain policy provisions must be made to ensure that this core tenet of Green-e Energy policy is preserved; otherwise, Green-e Energy will no longer be able to certify renewable energy transactions in the capped region. In RGGI, nine of the ten states (all of the above except Delaware) have adopted a provision that allows retail voluntary market sales of renewable MWhs that are generated in a RGGI state and sold into a RGGI state other than Delaware to have CO₂ emissions allowances retired on behalf of the sales.  The rules and mechanisms for retiring emissions allowances on behalf of retail voluntary renewable energy sales are referred to as set-aside provisions.

Under these nine states' rules, renewable MWhs can maintain their CO₂ emissions avoidance value through the retirement of RGGI emissions allowances on their behalf. This will allow these renewable MWhs to retain their Green-e Energy eligibility, as they will prevent a certain amount of CO₂ from being emitted under the cap. Accordingly, in states that do not retire allowances on behalf of the voluntary renewable energy market, sales of renewable MWhs will not be credited with any CO₂ emissions reductions benefits under the emissions cap, and thus will not be considered eligible for Green-e Energy certification.  

Each of the nine states has developed its own requirements for the process of retiring allowances on behalf of retail voluntary renewable MWh sales, and these requirements must be followed in order to ensure that such transactions remain eligible for Green-e Energy certification, and that retirement of such renewable MWhs allows for the ability to make the valid environmental claim that purchasers expect. In response to the creation of these state-specific policies, Green-e Energy must change a number of rules to maintain the requirements of the Green-e National Standard.  

These Green-e Energy rule changes are listed below, and go into effect for Green-e Energy Certified sales starting January 1, 2009.  Because RGGI policies are enforceable by law, Green-e Energy can not offer grandfathering of any affected Green-e Energy rules.

Green-e Energy fully supports set-aside provisions for renewable energy sales in these nine RGGI states as a leading example of how cap-and-trade can preserve the emissions reduction benefits of the voluntary renewable energy market.  Sellers of RGGI renewable MWhs into the nine RGGI states with voluntary renewable energy set-aside provisions must follow states' rules in order to ensure that voluntary renewable energy sales retain their full value.

Due to the RGGI rules addressing the treatment of voluntary renewable energy purchases, effective January 1, 2009 renewable energy from eligible generators located in RGGI states (including Delaware) can only be Green-e Energy Certified if sold to end use customers located in the nine RGGI states that have voluntary renewable energy set-aside provisions.  Such customers may still purchase Green-e Energy Certified renewable MWhs generated outside of RGGI states.  Please read all of the text below for important rules regarding the treatment of renewable MWhs generated and sold in RGGI states.

Green-e Energy Policy Changes Arising from RGGI Rules

Each state participating in RGGI has developed its own definition of the types of renewable energy that may apply to have RGGI emissions allowances retired on their behalf.  Renewable MWhs sold in Green-e Energy Certified transactions must meet the eligibility definitions determined by both the state of the sale and the Green-e Energy National Standard.  In the case where one set of rules is more stringent than the other, the more stringent rules must be followed.

A summary table of the following rules is provided at the end of this document.

Wholesale versus Retail Sales of RGGI Renewable MWhs
Because there is no mechanism in RGGI for wholesale transactions of renewable MWh generated in RGGI states to have CO₂ emissions allowances retired on their behalf, Green-e Energy can no longer certify wholesale transactions of renewable MWhs generated in RGGI states.

Geographic Eligibility within and outside of RGGI
Because a renewable MWh generated in a RGGI state must have CO₂ emissions allowances retired on its behalf to meet Green-e Energy requirements, RGGI renewable MWhs that are sold in Delaware or outside of RGGI are not eligible for Green-e Energy certification.  See Table 1 for Green-e Energy eligibility of RGGI renewable MWhs inside and outside of RGGI.

Table 1:  Green-e Energy Eligibility by Location of Generation and Location of Retail Sale

		Renewable MWh sold to retail customers in:
		RGGI minus DE	All other states incl. DE
Renewable MWh generated in:	RGGI state incl. DE	Must get allowance to be eligible	Ineligible, since no allowance available
	All other states	Eligible; no RGGI allowance necessary	Eligible; no RGGI allowance necessary

Generator Operational Date ("New" Date) Definitions
The Green-e Energy eligibility "new" date of January 1, 1997 remains in effect, with the following exceptions:

Maine: Eligible renewable MWhs purchased in Maine must come from facilities that first came online on September 1, 2005 or later.  Therefore, renewable energy facilities in any RGGI state that were built prior to that date may not sell their renewable MWhs into Maine in Green-e Energy Certified transactions.

Massachusetts: Eligible renewable MWhs must come from facilities that first came online on December 31, 1997, or later, which is a year later than Green-e Energy's "new" date.  Massachusetts also has a provision for facilities online before this date to apply for a "vintage waiver" so that they may sell renewable MWhs into the state and receive allowances for those sales.  Green-e Energy will recognize facilities that have been both granted a vintage waiver by Massachusetts and that first came online between January 1, 1997 and December 31, 1997.  For facilities that first came online before 1997, Massachusetts vintage waivers will not be recognized by Green-e Energy.

New York: Eligible renewable MWhs must come from facilities that first came online on January 1, 2003, or later.  Therefore, renewable energy facilities in any RGGI state that were built prior to that date may not sell their renewable MWhs into New York in Green-e Energy Certified transactions.

Additional State Restrictions and Considerations
Delaware: Green-e Energy will not certify sales of renewable MWhs generated in RGGI states and sold into Delaware because Delaware does not have a set-aside provision for voluntary renewable energy sales.  Renewable MWhs generated in Delaware and sold into one of the other nine RGGI states may be eligible for Green-e Energy certification, provided that those MWhs meet the eligibility requirements of that RGGI state.

Maryland, New Hampshire and Vermont: These three states are either still deciding on their rules or may be revising their rules soon.  If and when their rules are changed, Green-e Energy may issue further rules in response.

State Renewable Resource Type
Each RGGI state has its own definitions of which types of renewable resources will be eligible to have allowances retired on their behalf.

In order for a sale of RGGI state renewable MWhs into a RGGI state other than Delaware to be Green-e Energy Certified, the renewable MWhs sold must come from facilities that meet the resource eligibility definitions of both Green-e Energy and the RGGI state into which the renewable MWh was sold.

Connecticut, New Jersey and Rhode Island: The RGGI Model Rule definition of eligible renewables, used by these three states, matches Green-e Energy's definition with one exception: Green-e Energy does not yet have a specific provision for wave and tidal energy resources.  Therefore, sales of wave and tidal electricity generated in a RGGI state is not eligible for Green-e Energy certification unless and until Green-e Energy adopts wave and tidal resources as eligible.

Maine: Renewables sold in the state must meet the definition of Maine Class I renewables in the Maine Portfolio Requirement 65-407 CMR Chapter 311.  For Green-e Energy purposes, this means that renewable MWhs generated by facilities with nameplate capacities of over 100MW may not be sold as Green-e Energy Certified in Maine.  This also means that renewable MWhs from tidal power and hydropower in a RGGI state may not be sold in Maine as Green-e Energy Certified (unless the hydro facility is either certified by the Low Impact Hydropower Institute, a run-of-the-river facility with a nameplate capacity of 5MW or less, or a turbine in a pipeline).  Fuel cells, biomass and municipal solid waste may be eligible if they meet the Green-e Energy National Standard, but may not be eligible in all cases.

Maryland: Maryland is expected to propose new rules addressing resource, geographic and generator vintage eligibility rules.  Once these rules are put into place, Green-e Energy will issue further guidance regarding Maryland.

Massachusetts: Renewables sold in Massachusetts must meet the state's RPS Class I definition of renewable energy generating sources as well as Green-e Energy eligibility rules.  Therefore, ocean thermal, wave and tidal resources are not eligible; hydroelectric facilities that are above 25MW in capacity are not eligible; hydroelectric facilities must be Low Impact Hydropower Institute certified; biomass from wood sources are only eligible if the wood sources can be shown to meet Green-e Energy's criteria for being waste wood; marine or hydrokinetic energy is not eligible; a Class I renewable generating source may be located behind the customer meter within the ISO-NE control area if the output is verified by an independent verification system participating in the NEPOOL GIS accounting system and approved by the Massachusetts Department of Energy Resources.

New Hampshire: Renewables sold in the state must meet New Hampshire's RPS rules. Ocean resources, solar hot water that displaces electric water heating, and methane gas that fall into Class I are not eligible for Green-e Energy.  Class I biomass, hydrogen fuel cells and hydroelectric resources must meet the Green-e Energy eligibility rules.  Class II solar is eligible for Green-e Energy.  Class III and Class IV renewables are ineligible, as they are comprised of pre-1997 generation facilities.

New York: For renewable MWhs from run-of-the-river hydro greater than 5MW sold in New York to be eligible for Green-e Energy certification, the hydro facility must be certified by the Low Impact Hydropower Institute.  Ocean thermal, wave and tidal are not eligible.

State Geographic Eligibility
Similar to above, the geographic eligibility requirements of both Green-e Energy and the RGGI state into which the renewable MWh was sold must be met in order for the renewable MWh sale to be Green-e Energy Certified.  While Green-e Energy does not have geographic requirements for RECs, if Green-e Energy Certified renewable MWhs are used to supply a Green-e Energy Certified renewable electricity program in a RGGI state, buyers and sellers should be aware of Green-e Energy geographic requirements for electricity products.  These requirements are available in the Green-e Energy National Standard.

Massachusetts: In order for renewable MWhs from RGGI states to be eligible in Massachusetts, the electricity generated with the renewable MWhs must be delivered into ISO-NE.

New Hampshire: Once the state conforms to RPS eligibility requirements, it may have similar requirements as Massachusetts around electricity delivery.

Tracking System Use for RGGI Compliance
Maine: In order to have allowances retired for voluntary renewable energy sales, documentation provided to the state's environmental agency must be derived from data from a tracking system if possible; there are some eligible generators in Maine that are outside the footprint of the NEPOOL-GIS tracking system that may provide data from the entity that oversees the electricity transmission system in a generator's area.

Other RGGI states may begin requiring use to tracking systems at some point, in which case Green-e Energy will require tracking system use for sales into those RGGI states as well.

Additional Issues Pertaining to RGGI and Green-e Energy Policies

Verification and Reporting Timing
Each RGGI state has developed its own timelines for compliance with its voluntary renewable energy set-aside provision.  These timelines include the date a renewable MWh seller must report to the state's environmental agency, the date the agency will retire the allowances, and the date the retirements are actually made.  In many states, the deadline for reporting retail voluntary sales to the environmental agency falls after Green-e Energy's deadline for delivery of the annual Green-e Energy Verification Submission.  Green-e Energy is monitoring these state deadlines as they are announced and will develop verification protocols and deadlines for 2009 Green-e Energy Certified sales reporting with them in mind.

Full Carbon Value and Renewable MWh Sales Exceeding Available Allowances
Each RGGI state will put aside a finite number of allowances that can be retired on behalf of voluntary renewable MWh sales in the state.  There is the possibility that the volume of renewable MWhs sold in a state could exceed the allowances that have been put aside to ensure that each renewable MWh can claim its full carbon value.  Based on the manner in which states' rules are currently written, there are two possible results in terms of the carbon value assigned to a particular renewable MWh.  Either all renewable MWhs sold in the state in that year receive the same carbon value, which would be less than a renewable MWh would have received if the allowances had not been exhausted, or allowances are retired on a first-come-first-served basis such that later sales receive little or no carbon value.

Based on analysis of renewable MWh sales in RGGI states in recent years performed by Green-e Energy and others, this scenario of allowances falling short of renewable MWh sales is unlikely within the first year or two of RGGI implementation, but it is a very real risk over the course of RGGI implementation.  Green-e Energy will continue to work on this issue internally and externally, and will release a policy statement on this issue as soon as possible.  For 2009 RGGI sales, renewable MWhs must be granted their full possible carbon value as prescribed in the state voluntary renewable energy set-aside provision in order for their sale to be eligible for Green-e Energy certification.

Summary of Resulting New Green-e Energy Rules

State	New Date	Renewable Resources Eligibility	Geographic Eligibility	Where MWhs Can Be Sold	Other Rules and Restrictions
Connecticut	Jan. 1, 1997	No ocean resources	Green-e Energy National Standard	RGGI states other than DE
Delaware					Ineligible
Maine	Sept. 1, 2005	100 MW and under only; no ocean resources	Green-e Energy National Standard	RGGI states other than DE	Tracking Systems must be used where available in ME
Maryland	Not yet finalized	Resource definitions not finalized	Not yet finalized	RGGI states other than DE
Massachusetts	Dec. 31, 1997; no pre-1997 vintage waivers	Hydro over 25 MW ineligible; wood must be waste wood; behind-the-meter restrictions; no ocean resources	The electricity generated with RECs must be imported into ISO-NE with the RECs	RGGI states other than DE
New Hampshire	Jan. 1, 1997	No solar hot water heating; no methane; no Class III or IV renewables; no ocean resources	Green-e Energy National Standard; may require electricity import like MA	RGGI states other than DE	Some rules still not finalized.
New Jersey	Jan. 1, 1997	No ocean resources	Green-e Energy National Standard	RGGI states other than DE
New York	Jan. 1, 2003	Run-of-the-river hydro over 5 MW must be LIHI certified; no ocean resources	Green-e Energy National Standard	RGGI states other than DE
Rhode Island	Jan. 1, 1997	No ocean resources	Green-e Energy National Standard	RGGI states other than DE
Vermont	Not yet finalized	Resource definitions not finalized	Not yet finalized	RGGI states other than DE

The US EPA hosts a broader summary of RGGI state information, which is available here: http://www.epa.gov/greenpower/documents/events/rggi_status_table.pdf

 

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