The Latest on SRECs and Net Metering

In the Press · September 12, 2011

On August 2, 2011, the Massachusetts
Department of Energy Resources (DOER), proposed a set schedule for the Solar
Carve-Out Alternative Compliance Payment (ACP) of the Massachusetts Solar
Renewable Energy Certificate (SREC) program. Stakeholders argue that the
current ACP structure, which gives the DOER the authority to reduce the ACP by
10% yearly, has created doubt in SREC pricing and hesitation for participating
in long-term SREC contracts.     

The change would maintain the
current ACP of $550 per MWh generated through 2013, and then decrease it by a
fixed 5% each following year through 2021. The goal would be to provide more
certainty for future SREC pricing and encourage project financing and
negotiations for long-term SREC contracts. The DOER anticipates releasing a
final draft of the proposed amendment by October 2011.

The DOER is required to announce, by
the end of August of each year, the next year’s Total Compliance Obligation for
the SREC program. The Total Compliance Obligation is the amount of SRECs that
must be purchased during that year pursuant to the Massachusetts Renewable
Portfolio Standard. On August 31, 2011, the DOER released an announcement
stating that the Total Compliance Obligation for compliance year 2012 is 81,559
MWh (or 81,559 SRECs). This is an increase of approximately 4% over compliance
year 2011.    

DPU and Net Metering
Regulations

On July 22, 2011, the Massachusetts
Department of Public Utilities (DPU) announced a draft order amending the net
metering provisions of G.L. c. 164, Sec. 138 and 139 (Order). The Order, in
part:

(i) defines "net metering facility of a municipality or
other governmental entity" as a facility that is "owned or operated
by a municipality or other governmental entity, or a facility to which the
municipality or other governmental entity is assigned 100% of the output"

(ii) creates separate net metering capacities for municipal
or other governmental entities at 2% of the investor owned utilities’
(IOU’s)  historic peak load, and for all other entities
 (non-municipality or other governmental entities) at 1% of the IOU’s
historic peak load

(iii) limits to 10 megawatts the amount of generating
capacity eligible for any net metering facility owned or operated by a
municipality or other governmental entity

(iv) clarifies that capacity and energy are to be measured
in alternating current (AC) and not direct current (DC), consistent with the
configurations of the electric distribution system.   

While the DPU’s Order does not
address the need to provide assurances of eligibility for net metering systems,
the DPU has indicated that such a plan is still being developed. 

Capitol Hill Discusses
Net Metering

Massachusetts Senate Bill 1664 is
currently pending before the Joint Telecommunications, Utilities and Energy
committee of the Senate. The Bill, in part, amends G.L c. 164, Sec. 139 by
increasing the net metering capacity to be "equivalent with the aggregate
capacity of the SREC market." The Bill has been pending with the Committee
since February 2011.
       
If you would like more information about any of the
information presented here, or want to learn more about renewable energy and
energy efficiency regulations, please contact
Craig M. Tateronis at
617 456 8021 or ctateronis@princelobel.com.