Section-by-Section Summary of the Renewable Energy Portfolio Standard of 2004 (B15-0747)

Section 2. Findings and Purpose
The Council of the District of Columbia finds that promoting the growth of renewable electricity is in the public interest and that electricity suppliers and consumers share an obligation to increase their use of renewable energy.

Section 3. Definitions
The section defines:

The types of renewable energy sources included and divides them into two tiers.
An electricity supplier as anyone involved in selling electricity and related services, but excludes those involved with supplying “electricity and electricity supply services solely to occupants of a building for use by the occupants.”
A renewable energy credit as representing one megawatt-hour of electricity sold at retail in the District of Columbia, and derived from a tier 1 or tier 2 resource.

Section 4. Renewable Energy Portfolio Standard
Sets forth the requirement that a certain percentage of electricity sales by District of Columbia electricity suppliers must be derived from eligible renewable sources, as follows:

In 2006, not less than 1.5% must be from tier one renewable sources, and this percentage will increase by .5% per year until 2018, at which time it will be 7.5%.
From then on it will be 8.5% in 2019, 9.5% in 2020, and 11% in and after 2021.
In the years 2006 through 2014, an additional 2.5% must be met by tier 2 or tier 1 sources.
From 2014, the percentage of sales that may be met with tier 2 resources will diminish by .5% per year, until 0% in 2019, at which point tier 2 sources will no longer be eligible for meeting the RES.
Lastly, there is a provision that, after a ramping up from 2006 to 2009, 0 .16% must come from demand metered solar energy beginning in 2010, and continuing indefinitely.

Section 5. Renewable Energy Credits
Energy from a tier one renewable source is eligible for meeting the standard regardless of when the generating system or facility was placed in service, and may be applied to meeting tier 2 requirements, but energy from tier two sources is only eligible from a facility operational prior to January 1, 2004.

Prior to 2006, credits from wind and solar sources are valued at 120%, and in the years 2006-2008, will be valued at 110%.
Prior to 2009 credits, credits from landfill or wastewater treatment methane sources will also be valued at 110%.
Credit for solid waste incineration shall be limited to 20% of the standard for tier 2 resources, and shall be made ineligible after 2012.
Biomass cofiring credit will be given for the fraction of qualifying biomass cofired with other fuels.
All sources must comply with all applicable environmental and administrative requirements.

Section 6. Reporting Requirements Compliance Fee.
Each electricity supplier shall submit an annual compliance report, which will include to what degree the supplier has succeeded or failed in meeting the requirements of the standard. In the case of failure to meet the standard, the supplier shall pay a fee of 2.5 cents per kilowatt-hour (kwh) of tier 1 requirements not met, 1 cent for each kwh of tier 2 requirements not met, and 30 cents per kwh of solar requirements not met.

Section 7. Recovery of fees and costs.
Suppliers may recover the costs associated with compliance to this act, but may only recover a compliance fee if it is the least-cost measure to ratepayers as compared to investing in tier 1 renewables, or if there are insufficient tier one renewable sources available to comply with the standard.

Section 8. Renewable Energy Development Fund
All fees, payment, investment money received, and all interest on such monies, will be deposited into the fund to be used for encouraging the development of solar energy resources in the District of Columbia, through the use of loans and grants administered by the District of Columbia Energy Office.

Section 9. Renewable Electricity Trading System
The Energy Office shall establish and maintain an internet-accessible market-based renewable electricity trading system, though it may contract with a for-profit or non-profit entity to assist with administration.

Section 10. Application of Renewable Energy Credits.
Credits may be used to meet the standard by submitting them as evidence of compliance, or sold or otherwise transferred, shall exist for three years from the date created, but may be diminished or extinguished by the supplier or purchaser of the credit.

Section 11. Rules, Duties, and Powers of the Commission.
The Commission has, among other authorities associated with regulating utilities, the authority to impose a cost-recovering administrative fee on credit transactions, and shall report to the Council on the status of the implementation of this act and shall adopt regulations governing the applications and transfer of credits, the reporting requirements within 90 days after enactment.

End. April, 2004