District of Columbia Solar Carve-Out
District of Columbia Solar Carve-Out
Background
Late last year, the DC Council passed The Local Solar Expansion Act. It was signed into law by the Mayor on January 10, 2023. The Bill is currently in the 30-day Congressional review process for new DC laws. The law will go into effect on the later of March 1, 2023, or the date of Congressional approval.
Renewable Energy Portfolio Standards This bill relates to DC’s Renewable Energy Portfolio Standards (REPS) which mandates that electricity delivered to DC customers include minimum percentages of renewable energy. These percentages were originally enacted in 2004 (green below) and were subsequently updated twice, in 2016 (blue) and 2018 (gray). The REPS are not changed in the new legislation and the 2018 REPS remain in effect. Currently, 38.8% of delivered electricity must be from renewable sources during 2023. This rises to 100% in 2032 and beyond.
Solar Carve-Out
What has changed is the solar carve-out.
DC requires that certain percentages of the overall REPS requirement come specifically from solar electricity generation facilities sited in the District of Columbia, or on Pepco transmission feeders serving the District. This is the solar carve-out.
These percentages were established in the original 2004 REPS requirements (green below) and subsequently updated in 2016 (blue), 2018 (gray) and now 2023 (red). The carve-out was last capped at 10% and has now been raised to 15%.
Alternative Compliance Payment
In the event load serving entities (LSEs) cannot procure sufficient output from DC sited solar generation facilities to meet their DC customer’s needs, LSEs can satisfy their RPS solar carve-out obligations by making an Alternative Compliance Payment (ACP) to the District of Columbia government. The ACP levels phasedown over time.
The Local Solar Expansion Act slows the phasedown. The original ACPs (green below), along with those subsequently updated in 2016 (blue), 2018 (gray) and now 2023 (red) are shown below.
Grandfathering
The Local Solar Expansion Act incorporates a three-year grandfathering period for contracts executed before March 1, 2023. These contracts will not be subject to the new solar carve-out and Alternative Compliance Payment mandates until March 1, 2026.
To learn more about what this means for your DC electricity accounts, including an estimate of the economic impact, reach us at the contact information below.
The Avalon Advantage – Visit our website at www.avalonenergy.us, call us at 888-484-8096, or email us at [email protected].
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