Renewable Portfolio Standard

NOTE: On July 25, 2016, D.C. Mayor Muriel Bowser approved the Renewable Portfolio Standard Expansion Amendment Act to increase its RPS to 50% by 2032 and make other changes. The Act B21-0650 became effective starting October 8, 2016 after the 30 day period of Congressional Review. 

History:

In January 2005, the District of Columbia Council enacted a Renewable Portfolio Standard (RPS) that applies to all retail electricity sales in the District. The RPS has been subsequently amended several times since. In October 2008 the RPS was amended by the Clean and Affordable Energy Act (CAEA) of 2008 which increased the percentage and number of benchmarks that utilities must meet, including solar water heater as an eligible technology, increased the alternative compliance payment, and amended reporting requirements. In 2010 D.C. Law 18-0223 made minor amendments clarifying the eligibility of solar thermal facilities within the District, and geographical eligibility of renewable resources in general. In March 2011 D.C. Law 18-0303 clarified the certification requirements for non-residential solar thermal systems. In August of 2011, the RPS was amended by both the Emergency Distributed Generation Amendment Act (B19-0384), and the Distributed Generation Amendment Act (B19-10), which increased the solar carve out from 0.4% to 2.50% by 2023.  In 2015 the D.C. Act 20-595 amended the definition of qualifying biomass by eliminating the use of black liquor and use of biomass from old, inefficient facilities as an eligible biomass for a Tier 1 resource. In October 2016, the Renewable Portfolio Standard Expansion Act of 2016 (D.C. Act B21-0650) made significant amendment to the RPS by expanding the Tier 1 RPS resource to 50% by 2032 and the solar requirement to 5% by 2032. 

Eligible technologies and Carve-outs:

District energy suppliers must meet the RPS by obtaining renewable energy credits (RECs) that equal the percentage requirement for electricity sold or by paying specified compliance fees. DC's RPS involves a two-tiered system. “Tier 1” renewable resources include solar (electric or thermal), wind, biomass (greater than 65% efficiency), landfill gas, waste-water treatment gas, geothermal, ocean (mechanical and thermal), fuel cells fueled by "Tier 1" resources, and wastewater used as a heat source as a sink for heating or cooling systems. 

Solar thermal installations must generally use Solar Rating and Certification Corporation (SRCC) certified components in order to qualify as an eligible resource. RECs are awarded to Solar Thermal based on their kWh savings at the ratio 3,412 BTUs = 1kWh. 

“Tier 2” renewable resources include hydropower (other than pumped-storage generation).  Municipal solid waste incineration was previously categorized as eligible Tier 2 resource, however, beginning in 2013 municipal solid waste was no longer eligible  as a Tier 2 resource.  After 2019, Tier 2 renewable resources will not be allowed to be applied toward meeting annual RPS requirements.

Specific minimum percentages of retail electricity sales must come from eligible renewables according to the following schedule:

Based on the final rulemaking issued by the PSC in case 945-E-2581, it appears that the solar requirement is contained within the Tier 1 requirement, meaning that a solar REC used to comply with the solar requirement may also be used to meet the Tier 1 requirement. Energy from Tier 1 resources is eligible for inclusion in meeting the RPS regardless of when the generating system or facility was activated. Per 945-E-2581, to become a certified solar energy system the system capacity must not be larger than 5MW and must either be located within the District or in locations served by a distribution feeder serving the District.  Tier 1 energy may be applied to the percentage requirements of the standard for either Tier 1 or Tier 2 renewable resources. 

RECs have a three-year lifetime from the date of generation during which they are valid for compliance under the standard. The PSC RPS working group will identify any renewable energy resource that has been both certified by another PJM state and is eligible for participation within the D.C. RPS. Annual filings on Tier 1 and Tier 2 eligibility matrices will include this information and will be made available by February 1 of each year.

Credit Multipliers:

Certain renewable resources have in the past received preferential treatment through the use of compliance multipliers. Before January 1, 2007, electricity suppliers received 120% credit toward meeting the RPS for energy generated by wind or solar. Between January 1, 2007 and December 31, 2009, electricity suppliers received 110% credit for energy generated by wind or solar. Before January 1, 2010, electricity suppliers received 110% credit for energy generated by landfill methane or wastewater-treatment methane. 

Compliance: 

Suppliers that fail to comply with the requirements must pay $0.05 per kilowatt-hour (kWh) of shortfall from required Tier 1 resources, $0.01 for each kWh of shortfall from Tier 2 resources. 

Solar energy sources have a unique set of shortfall payment requirements, from 2011 through 2016 at $0.50 per kWh, continue at $0.50 from 2016 through 2023, $0.40 in 2024 through 2028, $0.30 in 2029 through 2032, and $0.05 in 2033 and thereafter. Alternative compliance fees are deposited into the D.C. Renewable Energy Development Fund and may be used to provide support to renewable energy projects. Energy supply contracts entered into prior to August 1, 2011 will not be subject to the increased solar requirements.

In December 2005 the DC Public Service Commission (PSC) adopted interim regulations governing the implementation of the RPS, including the application and transfer of RECs. According to the regulations, the electricity suppliers were permitted by statute to begin receiving and accumulating RECs on January 1, 2006. Effective October 1, 2010, RECs must be purchased from resources located within the PJM Interconnection region or within a state adjacent to the PJM Interconnection region. This portion of the law was amended by D.C. Law 18-0223 in July 2010 to remove confusing language pertaining to RECs associated with electricity delivered into the PJM Interconnection region from an adjacent control area. These terms are defined in greater detail in the rules adopted by the PSC. 

The PSC issued final regulations in January 2008 which require that each electricity supplier submit an annual compliance report detailing the quantities and types of renewable energy purchased and any compliance fees owed. Under these regulations, renewable energy generators must be certified as eligible by the PSC, but system owners may complete an expedited certification process if the generator has been previously certified by an eligible state with similar resource requirements. Further proposed rule changes were issued by the PSC in April 2009 to address the legislative changes made by the CAEA of 2008 with final revised rules adopted in September 2009. PSC issued final regulations in May 2017 in response to the legislative changes made by the Renewable Portfolio Standard Expansion Amendment Act, which adds raw or treated wastewater used as a heat source or sink for a heating or cooling system as a Tier One renewable source, increases the solar energy compliance fee starting with the 2017 compliance year, and increases the capacity of certain participating solar energy systems to fifteen megawatts. 

The RPS program website contains a detailed summary of legislative and regulatory actions since the inception of the program.