The passage of the Virginia Clean Economy Act (VCEA) mandates a Renewable Portfolio Standard (RPS) for Dominion and Appalachian Power Company. More information on SRECs in Virginia and the RPS can be found here. The Virginia State Corporation Commission (SCC) has purview over a wide variety of rules and regulations in the state including the program rules for SRECs.
As it stands the program rules dictate that SRECs can be retroactively generated to the beginning of the year in which the SREC facility registration was approved. This limits our ability to generate SRECs on your behalf, as your registration was approved in 2022.
We have been actively advocating through our channels to request retroactivity beyond just the beginning of the year of registration, ideally including 2021 and further back if at all possible.
While this rule is still under consideration by the SCC, as Carbon Solutions has been tracking the proceedings, comments from interested parties, and feedback from the SCC, we do not believe the odds of receiving additional retroactive generation is high. The current request for additional comment from the SCC can be found here.
Examples of the effects of the ruling and your options.
Option 1 (The Status Quo):
- Overview: A facility registered on 8/20/2022 will only receive SREC payments back to January 2022. Under the current rule, Carbon Solutions is only able to generate and apply section 7. Retroactive REC Purchases, to any SRECs that are created back to January of the registering year. Please note that registering a system is a separate process that occurs after contracting.
- Example 1:
- A facility registered that has generated 30 SRECs total from the time the interconnection was completed on July 7th, 2019.
- The owner contracted with Carbon Solutions on December 18th, 2021.
- The registration of the system was completed August 20th, 2022.
- The owner would be paid by Carbon Solutions at the contracted rate for 8 SRECs which were generated in 2022. The 22 SRECs generated from 2019-2021 are not able to be generated.
- Example 2:
- A facility registered that has generated 30 SRECs total from the time the interconnection was completed on July 7th, 2019.
- The owner contracted with Carbon Solutions on May 18th, 2022.
- The registration of the system was completed August 20th, 2022.
- The owner would be paid by Carbon Solutions at the contracted rate for 3 SRECs which were generated from the contract date (May 18th, 2022) and 5 Retroactive SRECs at the retroactive rate listed in Section 7 of the contract. The 22 SRECs generated from 2019-2021 are not able to be generated.
- The benefit of Option 1 is that you receive your first payment sooner. The downside is that, if in the unlikely event the rule changes, your facility would likely not qualify for retroactive generation in years preceding 2022.
Option 2 (Unlikely Scenario where the Rule Changes):
- Overview: A facility registered 8/20/2022 would receive SREC payments back to January 2021 (assuming the facility was installed and generating at that time). Under this rule Carbon Solutions would only be able to generate and apply section 7. Retroactive REC Purchases, to any SRECs that are created back to January of 2021. It is possible if the rule were to change that additional years beyond 2021 would be eligible, but this is an even more unlikely scenario.
- Example:
- A facility registered that has generated 20 SRECs total from the time the interconnection was completed on July 7th, 2019.
- The owner contracted with Carbon Solutions on December 18th, 2021.
- The registration of the system was completed on August 20th, 2022.
- The owner would be paid by Carbon Solutions at the contracted rate for 8 SRECs which were generated in 2022 and the 10 SRECs generated from 2021 at the retroactive rate listed in Section 7 of the contract. If the rule change includes SRECs prior to 2021 as eligible, the 12 SRECs generated from 2019 and 2020 would be paid at the retroactive rate listed in Section 7 of the contract.
- The benefit of Option 2 is that you may receive payment for additional retroactive SRECs that is not possible given the current program rule. The downside is that the likelihood of this happening appears to be low, and would delay your payment.