July 2007: Maine, Delaware and Pennsylvania Increase RPS Requirements

About The Author:

Robert A. Olson is a partner in the law firm of Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law, public utility law and related commercial transactions.

He can be reached at:

Brown, Olson & Gould, PC
2 Delta Drive
Suite 301
Concord, NH 03301
rolson@bowlaw.com
(603) 225-9716

July 2007

MAINE, DELAWARE AND PENNSYLVANIA
INCREASE RPS REQUIREMENTS

By Robert A. Olson, Esq. and David J. Shulock, Esq. -- Brown, Olson and Gould, P.C.
(originally published by PMA OnLine Magazine: 2008/01/19)

During this legislative session, the states of Maine, Delaware, and Pennsylvania have amended their renewable portfolio standards.

On June 22, 2007, Maine’s governor John Baldacci signed into law LD 1920 “An Act to Stimulate Demand for Renewable Energy.” This bill adds a new class to the Maine RPS by requiring competitive electricity providers to include in their energy portfolios a certain percentage of energy from “new renewable capacity resources.” New capacity resources include small power production facilities under FERC rules in effect on January 1, 1997 or generators with a capacity of 100 MW or less relying upon fuel cells, tidal power, solar arrays, wind power, geothermal installations, hydroelectric generators that meet all federal and state fish passage requirements and, biomass generators. To qualify as “new,” the facility must have an in-service date after September 1, 2005, or must have resumed operations after that date and after a two-year or longer hiatus from operations, or must have been refurbished after September 1, 2005 and be operating beyond its previous useful life or be employing an alternate technology that significantly increases the efficiency of the generation process. The percentage requirement for new capacity resources begins at one percent in January 2008, and escalates by one percent per year to ten percent in 2017. Competitive electricity providers may comply with this requirement through the use of renewable energy credits (“RECs”) or alternative compliance payments (“ACPs”) to be set by the Maine Public Utilities Commission. The bill permits the Maine PUC to suspend increases in the percentage requirement if it finds that investment in new renewable capacity resources is insufficient and the resulting use of RECs or ACPs has burdened electricity customers, or if ACPs are used to meet the requirements for three or more consecutive years.

On July 1, 2007, the State of Delaware General Assembly passed Senate Bill 19 “An Act to Amend the Delaware Code to Increase the Renewable Energy Portfolio Standard.” The bill doubles the state’s RPS requirement. Delaware first adopted an RPS requirement in 2005, to become effective in 2007. The RPS adopted in 2005 would have required investor-owned utilities to provide ten percent of their energy from renewables by 2019. Senate Bill 19 now requires investor-owned utilities to provide twenty percent of their energy from renewables by 2019. Percentage requirements for the first three years, 2007-2009 remain as they were under the 2005 law, and then increases to five percent in 2010. Municipal and cooperative utilities do not have to comply with the RPS requirements. The only investor-owned utility in Delaware is Delmarva Power, which provides approximately twenty-eight percent of electricity in the state.

On July 17, 2007, Governor Edward Rendell of Pennsylvania signed into law House Bill 1203, “an Act Amending the Alternative Energy Portfolio Standards Act.” This bill clarifies that alternative energy credits are to “remain the property of the alternative energy system until the alternative energy credit is voluntarily transferred by the alternative energy system” and that “Unless a contractual provision explicitly assigns alternative energy credits in a different manner, the owner of the alternative energy system . . . owns any and all alternative energy credits associated with or created by the production of electricity . . .” House Bill 1203 also modifies the definition of Tier I Alternative Energy Source to include solar thermal energy and provides yearly step increases for the amount of energy sold that must be from solar technologies beginning with 0.0013% in 2007 and ending with 0.5% in 2020 and thereafter. Under previous legislation, the step increases were larger and occurred only once every four years, although the ultimate requirement of 0.5% was the same.