FERC Regulation of Renewable Energy Certificates?

In the midst of the San Francisco-based California Public Utilities Commission focusing on how to count out-of-state renewable power towards its Renewables Portfolio Standard and what transactions should be considered Renewable Energy Cerificate-only transactions, an important note from our DC energy partner, Jim Mitchell about possible FERC regulation of RECs.

WSPP (formerly, the Western Systems Power Pool) filed in Federal Energy Regulatory Commission Docket No. ER12-1144-000 a proposed new service schedule under the WSPP Agreement to establish standardized terms for purchases and sales of renewable energy certificates (RECs) either separately from sales of electric energy or as a bundled product with energy.   The proposed service schedule identifies six separate REC products.  Parties to REC transactions would be required to specify the REC Product, quantity, price, vintage, transfer date, and the environmental attributes being conveyed.  WSPP noted that an increasing number of states have adopted requirements for electricity providers to supply a specified percentage of their power from renewable energy resources, and that many electricity providers meet their obligations to do so through purchases of RECs.  Because the FERC has previously indicated that it lacks jurisdiction over sales of RECs, the jurisdictional basis for the filing is not clear.  Although acceptance of the proposed service schedule may result in FERC regulation of purchases and sales of RECs, WSPP asked the FERC to confirm its understanding that such transactions are not sales of electric energy for resale under the Federal Power Act. Comments to the FERC are due by March 14, 2012.