Ohio RPS, EE and DR Mandates Facilitated Dialogue: Market Restructuring & Renewable Energy June 10-12, 2013 Mexico City, Mexico Hisham Choueiki, Ph.D., P.E. Department of Energy and Environment Public Utilities Commission of Ohio
Ohio Alternative Energy Portfolio Standard 25% by 2025 25% of retail electricity sold by: o Ohio s electric distribution utilities American Electric Power, Dayton Power & Light, Duke Energy, and First Energy, or; o Competitive electric service companies Must be generated from alternative sources: o Renewable energy sources o Advanced energy technology 2
SB 221 25% (of total kwh) by 2025 12.5% may be from advanced energy resources At least 12.5% from renewable,.5% solar At least 6.25% from renewable facilities located in the state, remainder deliverable Compliance payments/forfeitures 3
Renewable Portfolio Standard Policies.. www.dsireusa.org / February 2013. 29 states,+ Washington DC and 2 territories,have Renewable Portfolio Standards (8 states and 2 territories have renewable portfolio goals). 4
with Solar / Distributed Generation Provisions. Renewable Portfolio Standard Policies www.dsireusa.org / February 2013. 16 states,+ Washington DC have Renewable Portfolio Standards with Solar and/or Distributed Generation provisions 5
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Benchmarks By end of year Renewable Energy Solar Energy 12% 10% 8% Renewable Solar 2009 0.25% 0.004% 2010 0.5% 0.01% 2011 1% 0.03% 2012 1.5% 0.06% 2013 2% 0.09% 2014 2.5% 0.12% 2015 3.5% 0.15% 2016 4.5% 0.18% 6% 2017 5.5% 0.22% 4% 2% 0% 2009 2011 2013 2015 2017 2019 2021 2023 2018 6.5% 0.26% 2019 7.5% 0.3% 2020 8.5% 0.34% 2021 9.5% 0.38% 2022 10.5% 0.42% 2023 11.5% 0.46% 2024 + 12.5% 0.5% 7
Alternative Energy Benchmarks (including advanced) 8
Renewable Energy Credits New Ohio Renewable Energy Credit (REC) trading market created by new law in 2009 1 REC = 1 mwh of electricity generated Utilities may own renewable facilities or purchase RECs to meet the renewable portion of the standard PUCO certifies resources; established tracking systems will issue and track RECs RECs have a 5-year lifetime following their acquisition Energy and RECs may be sold as separate commodities 9
Compliance Payments Utilities and electric service companies subject to compliance payments if annual renewable and solar benchmarks are not met. Non Solar: Started at $45/mWh in 2009 2012 compliance payment was $47.56/MWh Solar: $450/mWh in 2009 and declines over time 2012 compliance payment was $350/MWh for solar Exceptions: force majeure; 3% cost cap 10
Certification Application Certification is not mandatory for any renewable project, but necessary to create RECs eligible for Ohio utility compliance No fee to apply May certify facilities prior to commercial operation Application will focus on: o Resource/technology utilized o Placed in-service date o Deliverability to the state One-time review (unless significant change to facility in future) Interested person may seek intervention and request hearing on certification Certification status will be conveyed to applicable attribute tracking system 11
Wind Momentum o Federal PTC (Production Tax Credit) o Price Volatility for Other Fuels (i.e., Natural Gas) o State Renewable Portfolio Standards (RPS) o Interest in Green Power / Clean Energy Sources o Technological Improvements o Climate Change / Energy Independence 12
Wind farms in Ohio can help provide renewable resources to meet Ohio s Alternative Energy Portfolio Standards But Also: A small wind generator owned by a retail customer may enable the customer to use a renewable resource to offset his electrical demand and potentially earn a credit for net metering on his electric bill. 13
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Ohio EDU 2009-2011 Requirements and Performance under the Alternative Energy Portfolio Standard (AEPS) ORC 4928.64 Note: Contents based on Companies' annual compliance filings - numbers may be adjusted following Commission review & decision 2011 Renewable Requirement - Net of Solar Solar Requirement Obligation (MWHs) Performance (MWHs) Obligation (MWHs) Performance (MWHs) AEP-Ohio Columbus Southern Power 186,036 186,036 5,754 5,754 Ohio Power 235,108 235,108 7,271 7,271 Total AEP-Ohio 421,144 421,144 13,025 13,025 Dayton Power & Light 109,190 109,190 3,337 3,337 Duke - Ohio 155,338 155,338 4,804 4,804 First Energy Cleveland Electric Illuminating 124,773 124,773 4,428 4,428 Ohio Edison Company 161,708 161,708 5,707 5,707 Toledo Edison Company 65,830 65,830 2,338 2,338 Total FE (Ohio EDUs) 352,311 352,311 12,473 12,473 EDU TOTALS 1,037,983 1,037,983 33,639 33,639 * CRES numbers not portrayed on this summary sheet * Solar compliance shortfalls addressed via force majeure requests * 2010 Solar Obligation includes compliance shortfalls from 2009 * CONTENTS BELIEVED TO BE CORRECT, BUT INTERESTED PARTIES SHOULD REFER TO APPLICABLE ANNUAL COMPLIANCE FILINGS 16
Advanced Energy Resources Clean coal Advanced Nuclear Fuel cells Customer co-generation Advanced solid waste conversion Utility generation plant or demand-side management efficiency measures Uprated capacity of an existing electric generating facility resulting from the deployment of advanced technology Any new, retrofitted, refueled or repowered generating facility in Ohio Note: RECs are not created from advanced resources 17
Energy Efficiency and Demand Reduction Benchmarks - SB 221 (OAC 4901:1-39) Establishes requirements and processes to determine specific benchmarks for energy efficiency and peak reduction programs Establishes energy usage and demand baselines for measuring annual energy savings and demand reductions Provides mechanisms by which investments achieve energy savings and demand reductions by mercantile customers in their own facilities and can be recognized in electric utility programs as contributing to specific levels of energy savings and demand reductions. 18
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Energy Efficiency Requirement 22% + Reduction by 2025 Could result in annual usage at 13.8 million MWh below 2007 Peak Demand Reduction Standard 7.75% by 2018 Tariffs and special contracts available to commit the demand reduction Customers enrolled in RTO demand response programs are counted if customer commits the peak demand reduction 21
Peak Demand Reduction and Energy Efficiency Benchmarks 22
Peak Demand Reduction and Energy Efficiency Benchmarks Each Electric Distribution Utility filed a report identifying the 2009 baselines and benchmarks. Each Electric Distribution Utility filed a program portfolio plan for energy efficiency and peak reduction programs. Upon approval of the program portfolio plan, an Electric distribution utility may seek cost recovery. Each year, on April 15, the Electric Distribution Utility must file a portfolio status report that demonstrates its compliance status with its benchmarks and provides an assessment of its performance. 23
Mercantile Customer Applications to commit Energy Efficiency and Peak Demand Reduction Ohio Administrative Code 4901:1-39-05(F) o Permits a mercantile customer to file individually or jointly with an electric utility, an application to commit the customer s existing demand reduction, demand response, and energy efficiency programs for integration with the utility s program o Expectation the mercantile customers were to be exempt from the EE/PDR Rider of the tariff they are taking service o Pilot Program adopted by the Commission for ease of application and administration 24
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