The Public Utility Commission this week ruled that alternative energy credits included in power purchase agreements entered into prior to the passage of the Alternative Energy Portfolio Standards Act belong to the electric distribution companies and electric generation suppliers.

The ruling primarily affects electricity sold by co-generation plants that are fueled by coal refuse across the state which qualifies as a renewable fuel under the Alternative Energy Portfolio Standards Act.

The Commission voted 3-1 to approve a motion by Commissioner Terrance Fitzpatrick to issue a declaratory order stating that utilities own the credits under long-term purchase power agreements entered into prior to the November 2004 passage of the AEPS Act. Commission Vice Chairman James Cawley issued a dissenting statement.

The AEPS Act generally requires that a certain percentage of all electric energy sold to retail customers be derived from alternative energy sources such as solar, wind, hydropower, geothermal, biomass, and demand side management resources. The law applies to both EDCs and EGSs who must demonstrate their compliance on an annual basis. The level of alternative energy required gradually increases according to a 15-year schedule.

Alternative energy credits were created as a tool to measure compliance with the AEPS Act. The credits act as a concrete way to determine if the EDCs are using the required percentage of energy from alternative sources as required by the Act.

The declaratory order was issued in response to a petition filed by Metropolitan Edison Co. and Pennsylvania Electric Co. Declaratory orders are issued to remove any uncertainty in the law.

NewsClip: Electric Firms Unlikely to Get Break on Caps

12/22/2006