Renewable energy certificates, also known as RECs, could soon be a transferrable entity in at least one market, potentially widening the market and profitability for the renewable energy sector. A proposed rule change to Rule 17 of the GCPC (General Power Contract Provisions) by the Western Area Power market (WAPA) is expected to make that a reality.
The proposal maps out language to change Rule 17 by converting it to 17.1 and adding a subpart – 17.2 that would allow customers to resell or otherwise dispose of claimed federal hydropower RECs. Because WAPA specifically deals with hydropower, their rule change speaks directly to hydropower generation. However, the rule change could – in theory – extrapolate across the entire renewables menu: hydropower, wind power, and solar power generation.
“WAPA’s proposed revision to GPCP number 17 [which] would allow customers with electric service contracts to resell renewable energy certificates (RECs) that they receive [from WAPA] as an attribute of their federal hydropower allocations.” – Dave Gorlin, WAPA Attorney/Advisor presenting at the Western Area Power informational meeting in November, 2024.
GPRS’ Market Segment Leader for Renewable Energy, Ryan Mewha, views the changes as positive market drivers. “I think this will expand innovation in the industry, bringing new technologies and players into the space. Privately trading RECs will create ownership for the purchaser to utilize the credits with the most qualified trade partners involved to complete the projects on time, on budget, and safely.”
What is a REC?
A renewable energy certificate, sometimes also called a renewable energy credit, is an instrument for the power generation and transmission marketplace that represents “the property rights to the environmental, social, and other non-power attributes of renewable electricity generation.”
For a REC to be issued, one megawatt-hour (MWh) of electric power must be generated and delivered to the electrical grid via a renewable energy source. RECs do have monetary value and in other markets, like the eastern U.S. east of the Ohio Valley, RECs are registered with a third-party known as MRATs to certify them.
“There is a substantial market surrounding them [RECs] as states, utilities, and businesses all try to meet these renewable energy goals.” – Brent Osiek, WAPA
36 states and the District of Columbia all have state-driven renewable energy portfolio standards and/or renewable energy goals.
RECs can be generated in multiple markets, and the U.S. Environmental Protection Agency (EPA) provides a summary of their attributes for customers that includes:
• Certificate data
• Certificate type
• Tracking system ID
• Renewable fuel type
• Renewable facility location
• Nameplate capacity of project
• Project name
• Project vintage (build date)
• Certificate (generation) vintage
• Certificate unique identification number
• Utility to which project is interconnected
• Eligibility for certification or renewable portfolio standard (RPS)
• Emissions rate of the renewable resource
However, the EPA cautions that these attributes can change or have additional requirements, depending on the market generating the REC.
How are RECs Currently Used?
When electricity flows through the power grid, neither it or the grid can define its origin/generation for regulatory and measurement purposes, so RECs allow the EPA, utilities, wholesalers, and customers a reliable way to account for, track, and assign ownership of renewable energy generation and its usage. RECs are required if consumers need to substantiate their claim to renewables generation, ownership, and/or use. This allows consumers to target their purchases to renewable (green) energy sources to drive a more sustainable electricity marketplace.
How Would the Proposed Rule 17 Change Affect REC Usage?
The current GPCPs contain 45 provisions. Most are standard and deal with run-of-the-mill utility concerns like non-payment, metering, and construction safety, along with equal opportunity employment, etc. Some iterations of these regulations (for WAPA) have been in force since the 1950s. So, from time to time, revision is necessary.
The proposed change to Rule 17 is clarity. “This proposed change maintains [WAPA’s] longstanding prohibition against reselling from electric service power and energy.” WAPA’s Brent Osiek shared in the November 4, 2024 meeting to explain the changes and invite public customer comment.
Specifically, rule 17 would become 17.1 and the addition of subsection 17.2 would read as follows:
17.2 Contractors receiving environmental attributes associated with any firm electric power or energy allocated under the contract may use, dispose of, transfer, or resell such environmental attributes in accordance with good utility practice.
“RECs are now viewed much more favorably than they were a decade ago. So, in short, hydropower RECs have more value than they used to. In the west, we’ve all experienced the impacts of drought, and among its many impacts has been reducing the value of hydropower. So, allowing the resale of RECs would allow customers the opportunity to directly gain some additional value from their hydropower allocations.” – Brent Osiek – WAPA
Osiek defines “good utility practice” as “common sense” processes and practices that one would expect from a person engaged in the utility industry.
When Will the Rule Change Go into Effect?
The current timeline for the changes to Rule 17 lays out reaching a decision in December of 2024. Customers would be notified in January of 2025, and from then on, WAPA would execute “amended contracts” with its customer that include their ability to transfer, sell, or dispose of their hydropower RECs.
The Western Area Power Administration’s (WAPA) comment period for changes to Rule 17, Resale of Firm Electric Service (Wholesale for Resale) ended on December 4, 2024. The GCPC Revision and REC presentation from WAPA, including video, and follow-up answers to questions posed during the November 4, 2024 meeting on the topic are available on their website.
How GPRS Helps Renewable Energy Generation Projects Stay Safe
Whether you are installing hydroelectric, solar, or wind power generation and/or transmission, or EV charging stations, GPRS has more than two decades of expertise and the nationwide footprint you need to give you complete control of your site with accurate subsurface existing conditions documentation, interactive sharable layered utility maps, and a suite of above and below-ground visualization services to keep your projects on time, on budget, and safe.
GPRS Intelligently Visualizes The Built World® for customers nationwide. What can we help you visualize?
Frequently Asked Questions
How does GPRS support renewable energy generation and transmission?
GPRS provides advanced subsurface utility locating, concrete scanning, and mapping solutions to ensure safe, efficient construction and maintenance of renewable energy generation and transmission projects. Our expert services mitigate risk, enhance project accuracy, and streamline workflows. Learn more about our renewable energy solutions here.
How many REC markets are there in the U.S.?
The U.S. features two primary Renewable Energy Certificate (REC) markets: compliance and voluntary. Compliance markets are driven by state Renewable Portfolio Standards, mandating utilities to source a specific percentage of energy from renewables. Voluntary markets enable consumers and businesses to purchase RECs to offset their carbon footprints.
GPRS enhances renewable energy projects by offering precise subsurface utility locating, concrete scanning, and comprehensive mapping services. Our expertise ensures safe and efficient construction and maintenance, mitigating risks and improving project accuracy. Discover more about our services here.
