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FERC will take your RECs

It's all about the RECs (renewable energy certificates) and FERC is about to steal all of

them (NMPRC rule 572.13.c.1.b; NMPRC case 05-00352-UT). I was at the Science, Tech, and

Telecom Committee yesterday (Monday, June 7, 2010; State Capital) and Dr. Daniel Fine from

New Mexico Institute of Mining and Technology told the committee that Federal Law would

preempt State Law in regards to renewable energy, and that the "revenue" was going towards
 
deficit reduction. Existing [pv net-metered] participants would get an upfront check to satisfy
 
existing contracts. He seemed to imply that these events would occur before the end of
 
JULY.

It would seem to be confirmed: RECs will soon become just an energy tax, not a currency.

Investors will not be able to harvest RECs for their own investment interest; only the

utility and the government will be buying and selling RECs. The rest of us will simply pay

the tax.

On Thursday, June 03, 2010, at the Re-Energize America conference held in Las Cruces, New

Mexico I asked the following question to Matt Rogers (Senior Advisor to the Secretary of

Energy for the Recovery Act):

"Do you believe that third party ownership of commercial scale PV grid-tie systems in

conjunction with open market trading of decoupled renewable energy certificates will drive

electricity prices below current wholesale prices?"

Matt Rogers answered: "yes"

The fantastic picture I am describing is this: An investor (from a cold, dark state) pays

to put a solar array on the rooftop of a local New Mexico business (lots of sun). He gives

the electricity to the business at discount (ppa; approaching FREE over time) and sells the
 
RECs on an open auction. Lots of similar investors do the same, and soon the price of
 
electricity falls for all. The state's economic development department now says to prospects:
 
bring your company to New Mexico, we have cheap/free electricity. The effects are far greater
 
if the owner of the generator owns the RECs. Current open market REC prices appear to be
 
above 30 cents/kWh in the Northeast  http://www.srectrade.com/auctionhistory.php.

...but kiss that all goodbye. FERC is about to steal ALL the RECs and the only benefit you

might receive is through a power purchase agreement whereby you fix your electric rate for

a period of years, but have NO possibility of harvesting/benefiting from the RECs. Now, no

economic growth potential exists, no investment-return, and the small renewable energy business
 
owner soon becomes extinct; for it will only be through the utility company and the government
 
(PACE) that you will purchase and install solar arrays (or wind turbines). Remember, RECs are
 
a currency if the owner of the generator owns the RECs (572.13.c.1.a); RECs are a tax if the utility
 
or government owns the RECs (NMPRC 572.13.c.1.b; PRC 05-00352-UT).

"Renewable Energy Certificates" implies asset and ownership.
"Renewable Energy Credit" implies you have no ownership nor control of its value.
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