HomeMy WebLinkAbout2012-05-01 RMLD Board of Commissioners Policy Committee MinutesReading Municipal Light Department (RMLD) Board of Commissioners
Policy Committee
General Manager's Conference Room RECEIVED
May 1, 2012 TOWN CLERK
Start Time: 7.30 p.m. READING. M A g S.
End Time: 8:50 p.m.
1011 JUL I l A 9t 4q
Attendees:
Committee Members: Mr. Soli, Ms. Snyder, and Ms. West
Board Members: Ms. O'Neill
RMLD Staff: Messrs. Cameron, Seldon, and Carpenter
Public: Robert Connor, John Rodgers
Mr. Soli brought the meeting to order at 7:30 p.m.
Discussion followed.
Ms. West said that she believes the committee should discuss and create policies, rather than edit them.
Ms. West suggested that the Policy Committee concentrate on the Renewable Energy Policy
recommended by the Power & Rate Committee.
Mr. Soli recommended that Seciton II. D. of the Renewable Energy Policy is stricken because it is not part
of the policy purview.
Ms. West suggested that a standard legal definition be used to define Renewable Energy instead of the
Committee developing its own definition. Mr. Cameron stated that RMLD is getting a legal decision
from General Counsel, which should clear up from a legal point of view the disposition of what is
renewable energy with respect to the sale of RECs for a municipal electric utility, pending further
information.
Ms. West stated that she thought that III. A. should read, "Renewable energy projects include those
whose energy comes from hydro, solar, wind, geothermal, and bio mass" and that the rest of the sentence
should be deleted.
Ms. West made a made a motion seconded by Mr. Soli to remove Section H. D. and change Section III. A.
as restated by Ms. West.
Motion carried 2:1:0. Ms. Snyder against.
Mr. Soli asked if there were any comments on Seciton III.B. There were no comments.
Ms. O'Neill stated that Seciton IIIB. does not support Section III.A. as constructed.
Mr. Soli made a motion seconded by Ms. Snyder to reconsider the amendment to Seciton III.A.
Motion carried 2:1:0. Ms. West against.
Discussion followed.
Mr. Soli made a motion to reinsert the last part of the sentence that was removed in Seciton III.A. and
remove the words "those whose" and insert the word "which ".
Motion carried 2:1:0. Ms. West against.
Ms. West made a motion to removed 5% in Section III.B. and replace it with .5 %. There was no second.
Mr. Soli asked if there were comments on III.C.
Policy Committee Meeting Minutes
May 1, 2012
Ms. West made a motion seconded by Mr. Soli that Seciton III.C. should read "RECs associated with
power supply contracts that are in excess of the percent participation in The Green Choice program will
be sold and the revenue be returned to the Fuel Charge.
Motion carried 2:1: 0. Ms. Snyder against.
Mr. Soli asked if there were any comments on Seconds III. D or E. There were no comments.
Ms. West made a motion that a Section III.F. be inserted that would read as follows, "an amount of funds
equal to the amount of revenue received from the sale of the RECs will be used for energy conservation
and renewable energy project in the following fiscal year."
Motion was not seconded.
Mr. Soli made a motion seconded by Ms. West that a Seciton III.F. be inserted and read, "The value of the
RECs held, sold, or retired by the RMLD shall be included in the monthly financial reports prepared for
the Board of Commissioners as well as included in the RMLD Annual Report. The valuation of the RECs
held and retired shall be based on the market -to- market valuation on the respective reporting date.
Motion carried 2:1:0. Ms. Snyder against.
Ms. West made a motion to reconsider the motion to amend Section III.A. to change the wording after the
word sources to read, "which may or may not include RECs that certify them as renewable energy."
There was no second.
Mr. Soli made a motion seconded by Ms. Snyder to create a Sustainable Energy Policy that can be also
sent to the RMLD Board of Commissioners.
Dissension followed.
Motion failed 1:2:0. Ms. West and Ms. Snyder against.
Ms. West made a motion seconded by Ms Snyder that the Policy Committee recommends that Renewable
Energy Policy as amended by the Policy Committee be sent to the RMLD Board of Commissioners for
edit and approval.
Motion carried 3:0:0.
Motion to Adjourn
At 8:50 p.m. Ms. West made a motion seconded by Ms. Snyder to adjourn the Committee Meeting.
Motion carried 3:0:0.
Revision No. 1 RMLD Policy No. Effective Date Review Date
Renewable Energy Policy
General Manager
Purpose
Per Board Vote
Chairman /Date
A. To develop an approach for implementing the vision of its strategic plan that the
RMLD "demonstrate leadership and excellence in providing low cost, clean and
reliable electric service."
B. To establish general guidelines that promote the inclusion of renewable energy
projects in order to further implement one of the primary strategies of the RMLD's
strategic plan to "procure a long — term diverse and environmentally responsive
power supply portfolio."
ll. Responsibilities
A. RMLD Board of Commissioners
1. Responsible for approving this policy.
B. RMLD Power and Rate Committee
1. Review all staff - recommended renewable energy project proposals and make
recommendations to the Board of Commissioners.
C. General Manager
1. Responsible for implementing this policy.
D. Energy Services Division
1. Responsible for assisting the General Manager in implementing this policy
and associated activities.
2. Responsible for presenting, evaluating, and overseeing the projects
necessary to achieve the goals of this policy.
Ill. Policy Elements
A. Renewable energy projects include those whose energy comes from hydro,
solar, wind, geothermal, and biomass sources and which include the renewable
energy certificates (RECs) that certify them.
B. The goal of the RMLD is to have five percent of its power supply portfolio
come from renewable energy sources by the end of calendar year 2012.
The percentage of the power supply portfolio deriving from renewable
energy resources will increase by one percent per year for the five
year period of 2013 -2017 at which time the RMLD Board will assess this
goal.
C. RECs associated with power supply contracts that are in excess of the
goal for 2012, 2013, 2014, 2015, 2016, and 2017 will be sold and the
revenue received will be returned to the fuel charge.
D. If Massachusetts state law requires the RMLD to participate in the
Massachusetts Renewable Portfolio Standard (RPS) the RMLD will review
and make required adjustments to its power supply portfolio.
E. The RMLD will strive to diversify renewable energy projects by type, size,
and location and will also include environmental impacts in the evaluation
process.
SUSTAINABLE ENERGY POLICY
1. PURPOSE
A. To implement the vision of its strategic plan that the RMLD "demonstrate leadership and
excellence in providing low -cost, clean and reliable electric service."
B. To establish general guidelines that promote the inclusion of sustainable - energy projects in
order to further implement a strategy of the RMLD's strategic plan to "procure a long -term
diverse and environmentally responsive, power- supply portfolio."
11. RESPONSIBILITIES
A. RMLD Board of Commissioners — Responsible for approving this policy.
B. RMLD Power & Rate Committee — Review all staff - recommended sustainable - energy
projects and make recommendations to the Board of Commissioners
C. General Manager — Responsible for implementing this policy.
III. DEFINITIONS
A. Sustainable energy projects are projects whose energy comes from hydro, solar, wind,
geothermal, and biomass sources and which might not include the government - mandated
renewable energy certificates (RECs) certifying that the power came from a renewable source.
B. Renewable energy projects are projects whose energy comes from hydro, solar, wind,
geothermal, and biomass sources and which include the government- mandated renewable energy
certificates (RECs) certifying that the power came from a renewable source.
IV. POLICY ELEMENTS
A. The RMLD is striving to develop a practical approach to including sustainable energy in its
energy portfolio while simultaneously balancing power supply costs.
B. The RMLD sustainability targets are to reach 15 percent sustainability by 2015, 20 percent
sustainability by 2020 and 25 percent sustainability by 2025. These target dates and target values
will be reviewed by the Power & Rate Committee every three years, with a first review in 2015.
C. If Massachusetts law requires the RMLD to Participate in a Renewable Portfolio Standard
(RPS), the RMLD will review and determine adjustments to the RMLD's power supply
portfolio.
D. The Power & Rate Committee will evaluate potential sustainable- energy projects with and
without the RECs in the pricing to determine the effect of each sustainable - energy project on
power supply costs.
E. On an annual basis. the RMLD Board shall determine the number of RECs to be retired and
the number to be sold. The number of RECs to be retired will not be less than the number
required under the Green Choice program for the prior fiscal year.
F. _The value of RECs held, sold, and retired by the RMLD shall be included in the monthly
financial reports prepared for the Board of Commissioners as well as included in the RMLD
Annual Report. The valuation for the RECs held and retired shall be based on mark -to- market
valuation on the respective reporting date.
R. Soli draft 26 April 2012
RENEWABLE ENERGY POLICY
I. PURPOSE
A. To implement the vision of its strategic plan that the RMLD "demonstrate leadership and
excellence in providing low -cost, clean and reliable electric service."
B. To establish general guidelines that promote the inclusion of renewable - energy projects in
order to further implement a strategy of the RMLD's strategic plan to "procure a long -term
diverse and environmentally responsive, power- supply portfolio."
II. RESPONSIBILITIES
A. RMLD Board of Commissioners — Responsible for approving this policy.
B. RMLD Power & Rate Committee — Review all staff - recommended renewable - energy
projects and make recommendations to the Board of Commissioners
C. General Manager — Responsible for implementing this policy.
III. DEFINITIONS
A. Sustainable energy projects are projects whose energy comes from hydro, solar, wind,
geothermal, and biomass sources and which might not include the government- mandated
renewable energy certificates (RECs) certifying that the power came from a renewable source.
B. Renewable energy projects are projects whose energy comes from hydro, solar, wind,
geothermal, and biomass sources and which include the government- mandated renewable energy
certificates (RECs) certifying that the power came from a renewable source.
IV. POLICY ELEMENTS
A. The goal of the RMLD is to have five percent of its power supply portfolio come from
renewable energy sources by the end of calendar year 2012. The goal for the power supply
portfolio deriving from renewable energy resources will increase by one percent per year for the
five year period of 2013 -2017 at which time the RMLD Board will assess this goal.
B. RECs associated with power supply contracts that are in excess of the paragraph 1V.A goals
for 2012, 2013, 2014, 2015, 2016, and 2017 will be sold and the revenue received will be
returned to the fuel charge, i.e., the RECs as follows shall be retired for the following years, and
any RECs in excess of the percentage may be sold:
Year RECs retired (as available), as a percentage of power supply portfolio
2012 5%
2013 6%
2014 7%
2015 8%
2016 9%
2017 10%
C. If Massachusetts state law requires the RMLD to participate in a Renewable Portfolio
Standard (RPS), the RMLD will review and determine adjustments to its power supply portfolio.
D. The RMLD will strive to diversify renewable energy projects by type, size, and location and
will also include environmental impacts in the evaluation process.
E. The value of RECs held, sold, and retired by the RMLD shall be included in the monthly
financial reports prepared for the Board of Commissioners as well as included in the RMLD
Annual Report. The valuation for the RECs held and retired shall be based on mark -to- market
valuation on the respective reporting date.
R. Soli draft 26 April 2012
READING MUNICII
AR 1V ENT
To: RMLD Policy Committee
From: Vinnie Cameron
0,
Subject: Response to Information Request from Commissioner West
Date: April 25, 2012
Commissioner West made the following information request for the Policy Committee
meeting on May 1, 2012.
As we are preparing to discuss the Power & Rate Committee's proposal for RECs,
please provide the following information to the Policy Committee and the Board to
provide pertinent background and details:
1) RMLD staff proposal for REC treatment
The Sustainable Energy Policy proposed to the Power & Rate Committee on April 18, 2012 by
RMLD Staff is attached as Attachment A.
2) Current value of RMLD RECs held
The current value of the RMLD RECs is as follows. The RMLD has approximately 18,000 MWh
worth of RECs from the four Swift River 14ydroelectric plants through March of this near. (In
Attachment B it is estimated that Swift River will provide 24,000 RECs, which reflect a full year
of operation.)
About 60% of these RECs qualiN for Class 2 Connecticut RECs and are worth an estimated
$5,000. The remaining 40% of the RECs qualifiY for Connecticut Class] RECs and are worth an
estimated $300,000. These estimates are based on present market rates for RECs.
3) Current REC % of RMLD power
As stated above the RMLD has approximately 18,000 RECs (18,000 MWh) the RMLD total
sales for FY12 is estimated to be about 700,000 MWh, so the RMLD RECs are abortt 2.6% of the
RMLD total sales. (As stated above, a fistl year of RECs from Swift River is estimated to be
24,000, which zoould equate to 3.4 %.)
4) Current % Green Choice of RMLD power
The RMLD needs to pin-chase 461 RECs in FY12 to satisfl the rcquirernerits of the Green Choice
program.
5) Current % RMLD RECs of total REC market (whatever locations would potentially
purchase our RECs)
Response is contained in Attachment B.
6) DOER guidance about RE generator claims regarding RE and RECs
Response is contained in Attachment C.
7) A summary of the REC treatment of other local municipal utilities (if known)
I contacted the electric nninicipal utilities in Massachusetts to determine zuhat they did with their
RECs, if they had them. The towns of Braintree, Hull, West Boylston, Concord, Middleboro,
Ipswich, Holden, Paxton, Templeton, and Wellesley all replied that they sell their RECs.
Wellesley does have a REC program similar to the RMLD's Green Choice Program so then do
retire an amount of RECs that are nominated by customers in the program.
2
READING MUNICIPAL LIGHT PARTMENT
To: RMLD Board of Commissioners Date: April 13, 2012
From: Vinnie Cameron
Subject: Draft Sustainable Energy Policy
Attached is a draft Sustainable Energy Policy that RMLD Staff and I have developed. It
is similar to the policy that was presented to the Power & Rate Committee last fall,
however, Sections D through I have been changed to reflect how the RMLD should
handle the sale /retirement of the RECs.
The main changes in this policy are related to the amount of RECs to be sold or retired
and what the RMLD should do with the funds received from the sale of the RECs.
Included in the draft policy is a floor of RECs to be retired that is equal to those
required to be retired under the Green Choice program. Instead of buying RECs in the
market the RMLD can retire RECs received through its sustainable energy projects.
Also recommended in this draft is that the Power & Rate Committee review the
amount of RECs to be sold /retired annually during the budget review period and make
a recommendation to the RMLD Board.
The policy also suggests that any amount of funds received from the sale of the RECs
be used to develop sustainable energy projects in the following fiscal year.
ATTACHMENT A
Revision No. I RMLD Policy No, Effective Date
Sustainable Enerey Policy
General Manager
I. PURPOSE
Review Date
Per Board Vote
Chairman/Date
A. To develop a practical approach to addressing the need for sustainable energy
alternatives that are energy efficient while simultaneously balancing power supply
costs.
S. To establish general guidelines that promote practical, cost efficient sustainable
energy alternatives and within the RMLD's power supply portfolio.
II. RESPONSIBILITIES
A. RMLD Commission %.
1. Responsible for approving this A*
2. Representation for the Bo �Oissioners is governed by RMLD
Policy #19 as revised.
B. RMLD Power S Rate
1. Review all R reco ended sustainable energy alternatives and
ensure that they e e policy guidelines.
C. General Manager
1. Responsible for implementing this policy.
D. Energy Services Division
1. Responsible for assisting the General Manager in implementing this policy
and associated activities.
2. Responsible for presenting the General Manager with projects that staff
has determined meet the criteria of this policy.
3. Responsible for evaluating and overseeing the projects necessary to
achieve the goals of this policy.
Policy 01, Revision I
Ill. POLICY ELEMENTS
Page 2
A. The RMLD is striving to develop a practical approach to addressing the need for
sustainable energy alternatives while simultaneously balancing power supply
costs. Sustainable energy sources can include, but are not limited to hydro, solar,
wind, geothermal and biomass - energy.
B. The RMLD will review the power supply portfolio from time to time with the
intention of meeting specific sustainability target percentages. Specifically RMLD
will strive to reach 15 percent sustainability, by 2015, 20 percent sustainability by
2020 and 25 percent sustainability by 2025. These target dates will be reviewed
by the Power and Rate Committee every three years.
C. If Massachusetts law requires the RMLD to Participate in Massachusetts
Renewable Portfolio Standard (RPS) the RMLD will review and make required
adjustments to the RMLD's power supply portfolio.
D. The RMLD will analyze sustainable p pply projects with a competitive
average power supply cost. y►
E. The RMLD will present the susta ne projects to the Power & Rate
Committee with and wUnf t ing to determine the effect of each
sustainable energy pr pply costs.
F. On an annual basis ate Committee will meet to determine the
amount of RECs tha and the amount that will be sold on the
available RECs. The s to be retired will not be less than amount
required under the Green Choice program for the prior fiscal year.
G. In fiscal year following the sale of any RECs, the RMLD will include an amount
equal to the amount of funds received from the sale of the RECs and use those
funds to develop sustainable energy projects either within or outside the RMLD's
service territory.
H. The RMLD will strive to diversify sustainable energy projects by type, size, and
location and will also include environmental impacts in the evaluation process.
I. On an annual basis the Power & Rate Committee will meet to determine the
amount of RECs that will be retired and the amount that will be sold of the
available RECs and make a recommendation to the RMLD Board. The amount of
RECs to be retired will not be less than the amount required under the Green
Choice program for the prior fiscal year.
RMLD Renewable Energy Certificate Question
RMLD Renewable Energy Certificate Question
Vincent Cameron
Page 1 of 1
Sent: Wednesday, February 29, 2012 11:58 AM
To: Lel-acheur, Bob [blelacheur @ci. reading. ma. us]; Hechenbleikner, Peter [ phechenbleikner @ci.reading.ma.us]
Cc: Jane Parenteau; William Seldon; Richard Hahn; Jeanne Foti
Categories: Red Category
Attachments: Fincom Info Request.xls (20 KB)
At the FINCOM meeting on 2/7/12 there was discussion of the Reading Municipal Light Department's
(RMLD) Renewable Energy Certificate (REC) issue. During this discussion, I was asked by a FINCOM
member what the effect of either retiring and selling the RMLD's RECs would have of the REC market.
Attached is an analysis of what I beleive the effect the RMLD RECs would have on the New Engand
REC market.
The attached analysis shows the estimated sales for the electric utilities in states that are under and
Renewable Portfolio Standard (RPS). An RPS is law and governs how many RECs need to be purchased
annually by electric utilities in support of renewable energy in New England. The 2011 Estimated Retail
Sales are based on the actual sales for 2010 escalated 1.1 %, which was the electric sales growth for
New England in 2011 per the ISO -NE Regional System Plan.
The RMLD then estimated the RPS Requirement for each state based on the states RPS percentage
requirement of kWh sales, which totals 4,916,409.
Further down on the sheet the RMLD then calculated the RECs related to the Swift River and Concord
Steam generating projects. In the right hand column is the percentage of the RMLD's RECs from these
projects as a total of the RECs required for all the electric utilities in New England. The result shows
that the RMLD's RECS represent about 1.25% of the total required RECs to be purchased by New
England electric utilities in 2011.
This analysis is for illustrative purposes only since the Concord Steam plant will not be on line until
2013 . However, the analysis shows that the RECs the RMLD will receive from these two projects is a
very small amount as compared to the total RECs estimated to be purchased by electric utilities in
2011.
ATT. -\CH%IE\T B
httvs: / /owa.rmld.com/owa/ ?ae= Item& t = IPM. Note &id= RP-AAAACOkZlrIkKL06uBL6Pvd... 4/27/2012
RPS
Percentage
7.00%
3.00%
2.00%
3.00%
5.00%
4.00%
State
Massachusetts
Maine
New Hampshire
Contecticutt
Vermont
Rhode Island
Total
RMLD RECs
Swift River
Concord Steam
Total RMLD RECs
RECs Analysis
2011 Est. Retail
Sales MWhs
37,662,592
12,524,000
15,198,480
36,562,000
5,548,940
5,650,781
113,146,793
RECs in MWhs
24,000
37,320
61,320
2011 Est. RPS
Req. MWhs
2,636,381
375,720
303,970
1,096,860
277,447
226,031
4,916,409
% of Total RECs
0.49%
0.76%
1.25%
Page 1 of
Vincent Cameron
Subject: FW: REC Information for the Board
Attachments: image001.emz; image003.emz; oledata.mso
From: Andrews, Natalie (ENE) [natal ie. andrews@state. ma. us]
Sent: Thursday, February 02, 2012 10:16 AM
To: Jared Carpenter
Cc: Breger, Dwayne (ENE); Sardo, Dan (ENE)
Subject: RE: Terminoligy question
Jared,
I've found some slides we prepared for a presentation that should help explain what a renewable energy (RE)
generator can claim about their facility. Let me know if you have any other questions.
4/27/2012
What can a RE generator claim's
Assuming the RE generator sells its REC into the MA RPS
Compliance Market, the generator-
• Can accurately claim:
— My facility is the site of H generation
— My facility generates X MWhs of peen energy wbidr helps
serves the Commonwealths' renewable energy obligations
— Myfoc" ycontributesr tons to the Comm onweallbs,
commitments to reduce gre rebus se gas emissions
• Cannot technically daim:
— My facility cansunwz X MWbs of gwe+n energy
— My facility bas reduced its greenhouse gas emissions byr tons
-\TT. -\CH%IE-\T C
rage L or
Regards,
Rut let's be reasonable ...
Marketing claims should be carefully stated and host sites
of RE generations should proudly tout their important
contributions.
Regulatory agencies are not looking to crackdown on
technical violations of claims. but must protect their
ability to accurately account for carbon reductions.
Egregiousviclationscould prompt investigation by the
Attorney General.
Vie must recognize that under RP S, all MA ratepayers are in
fact payingfor these a ttribu tes and should be so
acknowledged.
Reasonableness will prevail.
Natalie Andrews, Renewable Energy Project Coordinator
Massachusetts Department of Energy Resources
100 Cambridge Street, Suite 1020, Boston, MA 02114
Ph: 617.626.7343 Fax: 617.727.0030
htti)://www.mass.gov/doer/
Creating a Greener Energy Future for the Commonwealth
Follow DOER on Twitter: htto: / /twitter.com /MassDOER
Visit the Energy Smarts blog: www. mass.gov /blog /energy
4/27/2012