Alternative and Renewable Energy Portfolio Standard

Summary

Note: This bill was repealed on February 3rd, 2015 by a nearly unanimous vote for HB 2001.

In June 2009, West Virginia enacted an Alternative and Renewable Energy Portfolio Standard that requires investor-owned utilities (IOUs)* with more than 30,000 residential customers to supply 25% of retail electric sales from eligible alternative and renewable energy resources by 2025.

While this law contains some provisions similar to those found in Renewables Portfolio Standards (RPSs) adopted by other states, West Virginia's standard does not require a minimum contribution from renewable energy resources. The standard can be met using only alternative resources without any renewable resources. As a result, the renewable energy portion of the standard functions as a non-binding goal.

Compliance
The standard sets the following minimum benchmarks for electric utilities based on their annual electricity sales:

• 10% from 2015 to 2019
• 15% from 2020 to 2024
• 25% by January 1st 2025

Each utility submitted a compliance plan in 2010. These initial compliance plans, along with periodic progress reports, will be evaluated by the Public Service Commission (PSC) after January 1, 2015 to verify compliance. The PSC may impose non-compliance assessments if the utility fails to comply with the standard.

Elegible Technologies

To qualify, electricity produced by alternative and renewable resources must be generated or purchased from a facility in West Virginia or in the PJM Service Territory (the regional transmission organization which serves the state). The West Virginia Public Service Commission (PSC) is authorized to certify additional resources as either alternative or renewable. Furthermore, projects that reduce or offset greenhouse gas emissions and certain demand-side or efficiency projects may be certified and counted towards meeting the standard.

Alternative Energy Resources
In West Virginia, "alternative energy resources" include coal technology, coal bed methane, natural gas, fuel produced by a coal gasification or liquification facility, synthetic gas, integrated gasification combined cycle technologies, waste coal, tire-derived fuel, pumped storage hydroelectric projects, and recycled energy (through June 2010).

Renewable Energy Resources
The definition of "renewable energy resources" includes solar-electric, solar thermal energy, wind power, run-of-river hydropower, geothermal energy, fuel cells, and certain biomass energy and biologically-derived fuels. S.B. 350 enacted in April 2010 changed "recycled energy" from classification as an "alternative energy resource" to a renewable energy resource (effective in June 2010).

Energy Credits & Credit Multipliers

An alternative energy credit (AEC) is equal to a megawatt-hour (MWh) of alternative or renewable electricity generation. The PSC uses a public registry and PJM's GATS system to track transactions. Compliance is based on alternative energy credits (AECs), and banking of excess credits is allowed.

Credits will be awarded in the following way:

• One credit for each MWh of electricity generated or purchased from an alternative energy resource facility. It should be noted that utilities may meet no more than 10% of the standard with credits obtained from electricity generated from natural gas.
• Two credits for each MWh of electricity generated or purchased from a renewable energy resource facility
• Three credits for each MWh of electricity generated or purchased from a renewable energy resource facility located on a reclaimed surface mine in West Virginia
• Customer-generators will be awarded one credit for each MWh of electricity generated from an alternative energy resource facility and two credits for each MWh of electricity generated from a renewable energy resource facility.
• The PSC is authorized to award one credit to an electric utility for each ton of carbon dioxide-equivalent reduced or offset by approved projects.
• The PSC is also authorized to award one credit to an electric utility for each MWh of electricity conserved by an approved energy efficiency or demand-side management project, provided that the project savings are verified and certified according to PSC rules (to be determined).

* Including electric distribution companies or electric generation suppliers selling to retail customers. Municipal utilities, rural electric cooperatives, and other utilities serving fewer than 30,000 residential customers are specifically excluded from the standard, although the Public Service Commission (PSC) will consider adopting, by administrative rule, alternative and renewable requirements that would apply to these utilities.