General Program Overview

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Renewable Energy Credit Trading Program
David C. Schanbacher, P.E. TNRCC Air Program
Coordinator
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Graphics Courtesy of

• Roy McCoy
• Manager, Congestion Renewable Credits

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Renewable Energy Credit (REC) Program

• Required by Texas Restructuring Legislation
• Goal Develop 2000 MW new Renewable Capacity in
  TX by 2009
• Full Program began January 1, 2002

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New Capacity Ratchets
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TX Definition of Renewable
Renewable energy technologyAny technology that
exclusively relies on an energy source that is
naturally regenerated over a short time and
derived directly from the sun, indirectly
from the sun, or from moving water or other
natural movements and mechanisms of the
environment. Renewable energy technologies
include those that rely on energy derived
directly from the sun, or wind, geothermal,
hydroelectric, wave, or tidal energy, or on
biomass or biomass-based waste products,
including landfill gas. A renewable energy
technology does not rely on energy resources
derived from fossil fuels, waste products from
fossil fuels, or waste products from inorganic
sources.

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REC Program Overview

• Affects Competitive Retail Providers Renewable
  Generators
• Texas-wide (includes non-ERCOT areas)
• Requires Generators to be Certified by PUC
• Requires Competitive Retailers to submit RECs
  annually for Compliance

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REC Attributes

• Generated from Renewable Resource
• Hydro, Solar, Wind, Geothermal, Biomass
• 1 MWh renewable energy 1 REC
• Each REC is good for two compliance periods after
  the year of generation (three year life)

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REC Uses

• REC Program Annual REC Compliance Requirement
  for Competitive Retail Providers
• Submit RECs annually in proportion to retail load
  served in TX
• PUC Labeling Initiative RECs will (likely) be
  used for verification of advertising claims for
  green power

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REC Program ERCOT Administrator 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
• Retire RECs as they expire

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Administrator Responsibilities Continued

• Maintain public information Website
• Monthly report of MWH load in Texas
• List of REC account holders with contact
  information
• List of Facility ID Numbers, and associated
  information
• Report to the PUCT Compliance
• Verify that Competitive Retailers meet REC
  compliance requirements

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Participant Responsibilities Generators

• Apply to PUCT for certification as a REC
  generator
• Apply to ERCOT for REC account
• Generate Sell Energy
• Separate Energy from Attribute as Renewable
• Two revenue streams for the same product
• Flexible pricinglower Energy cost and recover
  difference through sale of RECs
• Receive RECs
• Sell RECs

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Participant Responsibilities Competitive
Retailers Others

• Competitive Retail Providers
• Annual REC Compliance Requirement
• Apply to ERCOT for REC account
• Other Entities
• No Restrictions on Participation
• Apply to ERCOT for REC account

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REC Software Design Account Holder Functionality

• All Activities Online
• Account Registration
• Secure Portal for REC Account Holders
• Enable Account Activities View, sort, batch, or
  singly identify RECs to Transfer or Retire

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Software Scaling Potential Transaction Volumes

• At outsetassume 1000 MW generation 35 CF
  8760 3,066,000 unique IDs in year 1
• If trade 3 times before retirement 9 million
  transactions for Year 1 RECs alone!
• All data available online for 3 years
• No limits on REC Account Applications

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REC Software Design ERCOT Perspective

• ERCOT Load and Generation Data used to calculate
  annual REC requirements (Siebel output)
• Nonmetered and nonERCOT data API or manually

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Questions?