Green Markets – Compliance
A Renewable Portfolio Standard (RPS) is a regulatory mandate to increase production of energy from renewable energy. In most instances, RPS imposes a compliance obligation on load serving entities to provide a minimum percentage of electricity supply from eligible renewable resources. The markets created by the states that impose mandatory renewable energy minimums are often referred to as RPS compliance markets. Most US states use these mandates in some form, however the Institute is aware of the following four states that specifically utilize the LIHI Certification Program as a component of determining hydropower eligibility for RPS. These are Delaware and the Commonwealth of Massachusetts, Oregon and Pennsylvannia.
First established under the Massachusetts Electric Utility Restructuring Act of 1997, and then amended per the Green Communities Act of 2008, Massachusetts law authorizes the Department of Energy Resources (DOER) to define the environmental standard for hydroelectric power eligibility for RPS. DOER Regulations provide that a hydroelectric generation unit may qualify for the MA RPS as follows: For RPS Class I, the facility must have up to a 30 MW nameplate capacity installed or efficiency improvements implemented after December 31, 1997, without any dam or water diversion structure constructed after that date. For RPS Class II the facility must have up to 7.5 MW nameplate capacity installed before January 1, 1998. For both RPS classes, the project may not generate Marine or Hydrokinetic Energy, and it must meet appropriate and site-specific standards that address adequate and healthy river flows, water quality standards, fish passage and protection measures and mitigation and enhancement opportunities in the impacted watershed. A unit shall demonstrate compliance to DOER with this standard by using a LIHI Certification. Links to the at 14/15.05(1)(a)6.) are provided:
Established by the Alternative Energy Portfolio Standards Act of 2004, P.L. 1672, No. 213 (AEPS), eligible hydroelectric generation is divided into two tiers; Tier I allows Low Impact Hydropower, and Tier II allows Large Scale Hydropower. Large-scale hydropower is defined as “the production of electric power by harnessing the hydroelectric potential of moving water impoundments, including pumped storage that does not meet the requirements of low-impact hydropower…” and Low-impact hydropower must have a nameplate capacity of 21 megawatts or less, be incremental hydroelectric development and (i) must not adversely change existing impacts to aquatic systems; (ii) must meets the certification standards established by the Low Impact Hydropower Institute and American Rivers, Inc., or their successors; (iii) must provide an adequate water flow for protection of aquatic life and for safe and effective fish passage; (iv) must protect against erosion; and (v) must protect cultural and historic resources.
Oregon state law designates three sources of hydroelectricity as eligible for the Oregon RPS, including Hydroelectric Efficiency Upgrades, Low-Impact Hydroelectric Projects and New Hydroelectric Projects. To qualify as a Low-Impact Hydroelectric Project in OR, the electricity must be from projects that have been certified by LIHI. In one compliance year, a utility can use no more than 50 average MW of generation from LIHI-certified facilities owned by Oregon utilities; and 40 average MW from LIHI-certified facilities not owned by a utility and located in Oregon (90 average MW or 788,400 MWh/RECs total per year). An average MW is the amount of electricity produced by the continuous production of one megawatt over the period of one year (or 8,760 megawatt hours).
Other states requiring hydro to meet environmental standards such as LIHI’s criteria include:Utah – voluntary goal requires hydroelectric power to be certified as low-impact to qualify.
Ohio – requires meeting eight criteria that closely mirror those of LIHI’s.