Florida and California Commissions Allow Renewable Energy Generators to Keep Renewable Energy Credits

January 12, 2007

Both California and Florida regulatory commissions have ruled that renewable energy generators own the renewable energy credits associated with their facilities. Sale and trade of the credits is expected to spur investment in renewable energy in both states.

On January 9, the Florida Public Service Commission (PSC) adopted new rules allowing developers of renewable energy more ways to price their energy. The new rules clarify that renewable energy credits (RECs) remain the exclusive property of the renewable generator. In addition, the rules require that all electric utilities must report the level of renewable generation in their service areas on an annual basis.

"Encouraging the growth of Florida’s renewable energy market will help the state reduce its growing dependency on natural gas for electric production and provide consumers with a diverse fuel mix less subject to volatile price fluctuations," said PSC Chairman Lisa Polak Edgar in a press release. She said the rules "represent a balance between the interests of developers of renewable energy generation, Florida’s investor-owned utilities, and the state’s consumers."

On January 11, the California Public Utilities Commission (PUC) ruled that distributed generation owners can keep or sell all of the RECs associated with their facilities.

With the PUC's decision, system owners can retire the credits or sell them. Currently in California, sales of RECs are confined to the voluntary market.

The commission expects that allowing distributed generation owners the benefit of REC values will promote solar and other renewable distributed facilities in California and advance economic and technological developments in the state.

PUC Commissioner John Bohn said the decision was the "practical way to…promote deployment of solar technologies," adding that the PUC should focus on doing all it could to support solar development.

For more information on Florida’s new rules, see the January 9 PSC press release.

Sources: January 12 article in SNL Energy Renewable Energy Week, the January 11 article in SNL Interactive, and the January 11 Dow Jones article picked up by CNN Money