Published on January 3rd, 2011 | by Susan Kraemer5
Eight Idaho Wind Farms Hope to Sell Renewable Energy Credits to California
January 3rd, 2011 by Susan Kraemer
Should we let Idaho earn money from selling us wind credits and yet keep their energy there? That is the question for California regulators to decide this month.
Eight wind farms in Idaho want to sell the renewable energy credits that could be generated by their wind energy to California utilities who are mandated to add more renewable energy to the grid. Idaho utilities have no such requirements, so wind farms in Idaho really can’t get a fair price for building new clean wind power infrastructure locally.
It is a completely novel idea.
Federal Energy Regulatory Commission (FERC) spokeswoman Barbara Connors told the SF Chronicle that the suggestion is unique, but a lot of things have yet to be tried in the renewable energy industry.
Basically, they’re saying to us, ‘This is how we read things and do you see it the same way?'” Connors told The Times-News. “If this had happened before, they probably wouldn’t be asking us.”
Idaho Winds LLC petitioned FERC Dec. 15 to approve the plan that involves selling wind energy and related Renewable Energy Credits (RECs) to a third party.
When you sell RECs, you don’t actually have to supply the energy itself to your customer.
What you sell is just a credit, a proof, indicating that renewable energy is produced. The energy can still be used by the entity making the energy and selling the credit.
An example of how RECs get used twice is how solar homeowners in New Jersey can earn cash from the power made on their roofs, even though it simultaneously lowers their own electric bill. Basically utilities that must buy renewable energy credits are paying to have renewable energy made somewhere. Its all good.
So the wind power would still be used in Idaho. But California would be responsible for helping make it cost- effective to build new energy infrastructure in Idaho. And given that we do need to add more environmentally sustainable renewable energy to the world grid, does it matter who gets to use it?
Idaho’s novel request brings up an interesting question for the California Public Utilities Commission to decide this month.
The CPUC is reconsidering regulations concerning renewable energy credits bundled with energy, according to commission spokesman Andrew Koch, who said the commission is meeting January 13th to vote on a change to allow both bundled contracts that include energy and renewable energy credits, and credit-only contracts.
“We’re going to see if we can refine the whole process,” Koch said. “This may open up a different avenue.”
Should California restrict utilities to producing the renewable energy, that they are mandated to produce, locally here in California? Some would say yes. Building new renewable energy infrastructure here keeps the economic benefits in California, (and green jobs are a major benefit here: the one bright spot in an anemic jobs picture) and the CPUC works for the state; so it should decide the case in a way that benefits California job seekers.
But there is an argument the other way too. If successful, the petition could lead to other Idaho renewable energy companies to attempt the same thing. This would lead to the growth of more renewable energy in Idaho. Otherwise, with no Renewable Energy Standard pushing utilities to add more renewable power there, it’s not going to happen. And every state that adds clean energy benefits me and my descendants – not just the state that I live in.
It’s kind of the REDD question. Don’t we all benefit when developing countries add more renewable energy?
So for myself; I’m leaning towards a vote to allow the wind farms in Idaho to sell their RECs to California utilities, while keeping the clean power they generate right there in Idaho. What do you think? How do you think our CPUC should vote on January 13th?
Image: Wolfgang Staudt
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