In 2005,
Senate Bill 74 established a renewable portfolio standard (RPS) requiring retail electricity suppliers to purchase 10% of the electricity sold in the state from renewable sources by 2019.
Senate Bill 19 of 2007 increased the RPS target to 20%, of which 2% must come from solar photovoltaics (PV). The RPS applies to the state's investor-owned utilities, municipal utilities, and rural electric cooperatives. Municipal utilities and rural electric cooperatives were allowed to opt out of the RPS requirements if they established a voluntary green power program and created a green energy fund, all of which have chosen to do so. Sales to industrial customers with a peak load of more than 1,500 kilowatts (kW) are exempt from the standard's requirements.
Eligible renewable-energy technologies include solar electric, solar heating and cooling that offsets electricity, wind, ocean tidal, ocean thermal, fuel cells powered by renewable fuels, hydroelectric facilities with a maximum capacity of 30 megawatts (MW), sustainable biomass, anaerobic digestion, and landfill gas.
The 2007 amendments set two separate compliance schedules. Schedule 1 (S1) describes the general renewable energy benchmarks while Schedule 2 (S2) applies only to wholesale renewable energy purchases for Standard Offer Service (SOS) for compliance years 2007, 2008, and 2009. Under Schedule 2, the benchmarks that were in place during the 2005 and 2006 SOS auctions are preserved. Beginning in June 2011 the schedules are identical and the new PV requirement is the same in both schedules. It should also be noted that the PV target is not in addition to the main target, it is included within it:
- On and after 6/1/07: 2.0% (S1), 1.0% (S2), ---- (PV)
- On and after 6/1/08: 3.0% (S1), 1.5% (S2), 0.011% (PV)
- On and after 6/1/09: 4.0% (S1), 2.0% (S2), 0.014% (PV)
- On and after 6/1/10: 5.5% (S1), 5.0% (S2), 0.018% (PV)
- On and after 6/1/11: 7.0%, 0.048% (PV)
- On and after 6/1/12: 8.5%, 0.099% (PV)
- On and after 6/1/13: 10%, 0.201% (PV)
- On and after 6/1/14: 11.5%, 0.354% (PV)
- On and after 6/1/15: 13%, 0.559% (PV)
- On and after 6/1/16: 14.5%, 0.803% (PV)
- On and after 6/1/17: 16%, 1.112% (PV)
- On and after 6/1/18: 18%, 1.547% (PV)
- On and after 6/1/19: 20%, 2.005% (PV)
Beginning in compliance year 2010, and in each year afterward, the PSC may review the schedule and recommend that the state legislature accelerate or decelerate the schedule as necessary. Beginning in compliance year 2014, and in each year afterward, the PSC itself may accelerate or decelerate the schedule given certain market conditions.
For all suppliers, no more than 1% of each year's total retail sales may be met by eligible renewable resources placed into service on or before December 31, 1997. In compliance year 2020 and each year afterward, all eligible renewable resources used to meet the standard must be placed into service after December 31, 1997.
Energy sold or displaced by a customer-sited eligible energy resource can generate renewable energy credits for RPS compliance, provided the system is sited in Delaware. The output from generators of less than 100 kW may be aggregated for RPS compliance. The PSC will certify generation units as "eligible energy resources". Certified generators are entitled to a renewable energy credit (REC) for each megawatt-hour (MWh) of energy they generate. Delaware RECs are tracked by the
PJM-EIS Generation Attributes Tracking System (GATS). A REC can generally be used for RPS compliance in any compliance year that begins less than three years after the date the REC is created. The exception to this is when RECs that are held by the Delaware Sustainable Energy Utility (SEU), which is required to act as a REC aggregator for customer-sited renewable energy facilities. The three-year REC lifetime is "tolled", or suspended, during any period in which a REC is held by the SEU. This provision was added by S.B. 173 in July 2009 and revised rules are currently under development.
Suppliers must submit report an annual report detailing their compliance status. Suppliers who fail to comply with the standard's requirements must pay into the Delaware Green Energy Fund an alternative compliance payment (ACP) of $25 per MWh of shortfall. The ACP increases in subsequent years for suppliers who elect to pay it. After the first year that suppliers pay the ACP, the ACP increases to $50 per MWh. After the second year, it increases to $80 per MWh. The solar ACP begins at $250 per MWh and increases to $300 if the electricity supplier has opted for the ACP in any previous year. The ACP then increases to $350 with subsequent uses. The Delaware Energy Office has the authority to review and adjust the ACP and solar ACP given certain market conditions.
Several renewable energy technologies receive special multipliers under the Delaware RPS. Suppliers will receive 300% credit toward RPS compliance for in-state customer-sited photovoltaic generation and fuel cells using renewable fuels that are installed on or before December 31, 2014. However, as indicated in a January 2009
notice from the PSC, the 300% multiplier cannot be applied to SRECs used for compliance with the PV carve-out. For PV carve-out compliance purposes, SRECs are counted on a 1-to-1 basis. The 300% credit formerly applied to all solar electric generation prior to the 2007 amendments.
Suppliers will also receive 150% credit toward RPS compliance for energy generated by wind turbines sited in Delaware on or before December 31, 2012. Finally,
S.B. 328 (2008) offered PSC regulated electric companies (i.e., Delmarva Power & Light, the state's only investor-owned utility) a 350% credit for offshore wind facilities sited on or before May 31, 2017.
Suppliers may recover actual dollar-for dollar costs of RPS compliance -- with a conditional exception of alternative-compliance payments -- through a non-bypassable surcharge on customer bills.
In
Order No. 6931 dated June 6, 2006, the PSC adopted and approved the Rules and Procedures to Implement the original Renewable Energy Portfolio Standard. Revised rules consistent with the 2007 amendments were adopted by
Order No. 7377 in April 2008. A further revision relating to the 350% multiplier for offshore wind was adopted by
PSC Order No. 7494 effective February 10, 2009.
