Renewable Energy Credit (REC) Program ERCOT Retail 101

1. Renewable Energy Credit (REC) Program ERCOT Retail 101

2. Discussion Topics • Definition and Overview • Types of Renewable Energy • Rules and Responsibilities • ERCOT Renewables Website

3. Texas Definition Of Renewable Renewable energy technology is any technology that: • Exclusively relies on an energy source that is naturally regenerated over a short time • Derived directly from the sun, indirectly from the sun • Derived from moving water • Derived from natural movements and mechanisms of the environment.

4. Texas Definition Of Renewable Renewable Energy Technology does not rely on: • Energy resources derived from fossil fuels • Waste products from fossil fuels • Waste products from inorganic sources.

5. Examples Of Renewables Renewable Energy Sources are: • Wind Generators • Solar Panels • Landfill Gas Capture/Utilization Devices • Tidal Flow Energy Capture Devices • Flowing Water Energy Capture Devices • Dams • Geothermal Energy Capture Devices

6. What is a REC? • 1 MWh renewable energy = 1 REC • Each REC is good for three compliance periods (two full years and the partial year in which it was created)

7. REC Program Overview • Affects Competitive Retail Electric Providers & Renewable Generators (MOU/EC) • Texas-wide (includes non-ERCOT areas) • Requires Competitive Retailers to submit RECs annually for Compliance

8. REC Program Purpose • Encourage construction and production of renewable energy • Promote the use of renewable energy • Satisfy the State of Texas renewable energy requirements • August 1, 2005 Senate Bill 20 passed, extending the renewable energy requirements to January 1, 2025 with a target of 10,000 MWs

9. New Capacity Ratchets

10. REC Uses • REC Program: • Annual REC Compliance Requirement for CRs • CRs are required to submit RECs annually in proportion to retail load served in TX • PUC Labeling Initiative: • RECs can be used for verification of advertising claims for green power

11. REC Offsets • A REC offset represents one MWh of renewable energy from an Existing Facility that may be used in place of a REC to meet a renewable energy requirement. • Existing Facilities are Renewable Energy Generators placed in service before September 1, 1999. • Offsets used to reduce the mandated retirement of RECs for Competitive Retailers

12. REC Offsets • To qualify for REC offsets in the REC Program, a Retail Electric Provider, Must have applied for REC OFFSETS to the PUCT by June 1, 2001 • REC OFFSETS are not tradable • Valid until PUCT revokes/cancels the awarded offsets or until the generator ceases to generate electricity

13. REC Offsets & Generation & Transmission Cooperatives • G&T Cooperatives may: • Be responsible for the cumulative total of Offsets and their distribution and/or redistribution • Assign/Distribute Offsets to affiliate cooperative members for use when those members Opt-In to the Competitive Retail Market • May redistribute Offsets as additional members Opt-In

14. ERCOT Responsibilities • PUC appointed ERCOT as REC Program Administrator in May 2000 • Register Program Participants • Create REC accounts • Track MWh of renewable energy generated • Create unique REC IDs for each MWh • Distribute RECs to generators, quarterly • Determine annual REC Allocation for Competitive Providers • Retire RECs submitted for compliance

15. ERCOT Responsibilities • Retire REC’s as they expire • Maintain public information website • Provide monthly report of MWH load in Texas • Provide list of REC account holders with contact information • Provide list of Facility ID Numbers, and associated information • Provide reports to the PUCT – Compliance • Verify that Competitive Retailers meet REC compliance requirements

16. MP Responsibilities: Generators • Apply to PUCT for certification as a REC generator • Apply to ERCOT for REC account • If not an ERCOT polled generator then the generator must enter monthly generation data in the ERCOT Web Site

17. MP Responsibilities: Generators • Generate & Sell Energy • Separate Energy from Credits • Two revenue streams for generators • Receive and Sell RECs

18. MP Responsibilities: CRs and Others • Competitive Retail Electric Providers • Apply to ERCOT for REC account after certification • Obtain annual REC Compliance Requirement from ERCOT by January 31st • Submit REC Compliance numbers to ERCOT by March 31st • If load is not ERCOT polled, then CR must enter load data in ERCOT Web Site

19. MP Responsibilities: CRs and Others • Other Entities • No Restrictions on Participation • Apply to ERCOT for REC account

20. ERCOT REC Website • All data available online for 3 years • No limits on REC Account Applications • All Activities Available Online • Account Registration • Trading • Secure Portal for REC Account Holders • Enable Account Activities: View, sort, batch, or singly identify RECs to Transfer or Retire

21. Where is REC Website? Go to the ERCOT Website • www.ercot.com • Select View Other ERCOT Websites • Select Renewable Energy Credits Program-Texasrenewables.com • Select Login (New Users will need to register.) Some features do not require a login

22. Login Register ERCOT Renewables Program Home Page View

23. New Account Registration Form

24. Select Competitive Retailers List of participating CR/REP Contact info

25. Summary • REC Program is Mandated by the PUCT and administered by ERCOT • All CR/REPs serving load must participate • All CR/REPs are responsible for their reported load • Everything can be done from the ERCOT Renewables website

26. Questions?

27. ERCOT Challenge Which of the following is not a renewable energy source? • Solar Panels • Dams • Flowing Water Energy Capture Devices • Wind Generators • Resources derived from fossil fuels Answer - E