Transcript Earnings per Share

Pepco MD & Pepco DC
Renewable Portfolio Standard Requirements
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Renewable Energy – Maryland and the District
 In Maryland and the District, the law directs electric
suppliers to buy renewable energy credits (RECs) – not
renewable energy itself – in amounts sufficient to meet
each year’s Renewable Portfolio Standard (RPS)
 A “REC” is a credit associated with the verified
production of one megawatt hour of electricity from a
renewable energy facility
 If a supplier does not purchase enough RECs in any
given year, it must pay an alternative compliance fee to
make up the difference
 The sellers of electricity in each jurisdiction must meet
their portion of that year’s RPS requirement based on
their percentage of load in each jurisdiction
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Pepco and the RPS Standard
 Pepco is a supplier of electricity in both jurisdictions
 Because of deregulation and customer choice, Pepco
supplies electricity to some but not all of its customers –
it’s called Standard Offer Service (SOS)
 HOWEVER, Pepco does not own generating stations,
so how can it provide SOS and meet RPS standards?
 Pepco buys the electricity needed to supply SOS
customers from other electricity suppliers, through
auctions supervised by the PSC
 The SOS supply purchased through those auctions
includes the costs of RPS compliance
 The generators that provide electricity for Standard
Offer Service supply must either buy their share of
RECs, or pay an alternative compliance fee
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RPS Facts – Maryland and the District
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RECs are classed as either Tier I or Tier II
Tier I includes wind and solar, among other technologies
Tier II chiefly means large hydro and solid waste
Tier II is to be phased out over time
Most facilities can be located in and around the 13-state PJM
region – not just Maryland or the District
 Solar requirements are “carved out” of the total RPS requirements
– a special subset of RECs just for solar, called “SRECs”
 Both Maryland and the District have moved to limit SREC
eligibility to solar facilities located within the State/District
 New Maryland legislation just proposed by Governor O’Malley
would create a new subset of Tier I RECs, this time for offshore
wind facilities
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Pepco MD RPS Requirements
Year
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Solar CarveOut %
0.10%
0.20%
0.30%
0.40%
0.50%
0.55%
0.90%
1.20%
1.50%
1.85%
2.00%
Other Tier I
6.40%
8.00%
10.00%
10.10%
12.20%
12.55%
14.90%
16.20%
16.50%
16.85%
18.00%
Pepco MD Projected RPS Requirements
Pepco MD SREC Approx. SREC
Tier II
Requirement
Capacity (MW)
2.50%
15,195
11
2.50%
31,360
22
2.50%
47,175
34
2.50%
63,146
45
2.50%
79,240
57
2.50%
87,476
62
2.50%
143,673
103
0.00%
192,311
137
0.00%
241,327
172
0.00%
298,762
213
0.00%
327,831
234
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Pepco MD REC
Requirement
1,352,395
1,646,416
1,965,627
1,989,112
2,329,671
2,393,667
2,777,685
2,596,196
2,654,593
2,721,160
2,950,481
Approx. REC
Capacity (MW)
515
626
748
757
886
911
1057
988
1010
1035
1123
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Pepco DC RPS Requirements
Year
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Solar CarveOut %
0.50%
0.50%
0.60%
0.70%
0.83%
0.98%
1.15%
1.35%
1.58%
1.85%
2.18%
Other Tier I
5.00%
6.50%
8.00%
9.50%
11.50%
13.50%
15.50%
17.50%
20.00%
20.00%
20.00%
Pepco DC Projected RPS Requirements
Pepco DC SREC Approx. SREC
Tier II
Requirement
Capacity (MW)
2.50%
58,656
42
2.50%
60,242
43
2.50%
72,246
52
2.50%
84,538
60
2.00%
99,886
71
1.50%
118,889
85
1.00%
139,760
100
0.50%
164,410
117
0.00%
192,787
138
0.00%
226,132
162
0.00%
269,846
193
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Pepco DC REC
Requirement
879,846
1,084,361
1,264,308
1,449,223
1,634,497
1,819,729
2,005,253
2,192,134
2,440,340
2,444,672
2,481,342
Approx. REC
Capacity (MW)
335
413
481
551
622
692
763
834
929
930
944
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MPSC Slide on Maryland RPS Compliance
RPS Compliance Year
RPS Obligation (MWh)
2006 Retired RECs (MWh)
ACP Required ($/MWh)
RPS Obligation (MWh)
2007 Retired RECs (MWh)
ACP Required ($/MWh)
RPS Obligation (MWh)
2008 Retired RECs (MWh)
ACP Required ($/MWh)
RPS Obligation (MWh)
2009 Retired RECs (MWh)
ACP Required ($/MWh)
RPS Obligation (MWh)
2010 Retired RECs (MWh)
ACP Required ($/MWh)
Tier 1
Total
Tier 2
(non-solar) Tier 1 Solar
- 1,300,201 1,820,274
520,073
- 1,322,069 1,874,943
552,874
$38,209
$24,917
$13,293
- 1,384,029 1,937,641
553,612
- 1,382,874 1,936,248
553,374
$36,374
$23,751
$12,623
2,934 1,479,305 2,665,678
1,183,439
227 1,500,414 2,684,815
1,184,174
$8,175 $1,235,934
$9,020 $1,218,739
6,125 1,535,655 2,770,301
1,228,521
3,260 1,509,270 2,793,475
1,280,946
$270 $1,148,265
$395 $1,147,600
15,985 1,601,723 3,539,778
1,922,070
15,451 1,622,751 3,569,569
1,931,367
$217,620
$0
$217,600
$20
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MPSC Slide on Renewable Resources
Since the inception of Maryland’s RPS (2007), 2337
MW have been registered
Solar
Non-solar
Total
RPS TOTAL
# units
MW
2795
62.7
40
2274
2835
2337
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MD PROJECTS
# units MW
1953
38.4
9
129
1962
167
69%
7%
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What Else is PHI Doing on Renewable Energy?
 In Delaware, PHI utility Delmarva Power buys RECs directly to
meet RPS requirements
 Delmarva Power entered into long-term contracts with Maryland
and Pennsylvania wind farms that are operational
 Delmarva Power is working with Bloom Energy to build a large
scale fuel cell generation project in Delaware
 Delmarva Power is working with developers on large scale solar
projects in Delaware
 PHI utility Atlantic City Electric helped pioneer the offshore wind
renewable energy credit carve out in New Jersey, which Governor
O’Malley has incorporated into his offshore wind bill
 PHI subsidiary Pepco Energy Services provides energy savings
and renewable energy solutions as part of its services to
commercial and government customers
 Pepco and Delmarva Power MD are looking into the feasibility of
proposing utility-owned, large scale solar projects to the MPSC.
However, the SOS procurement process complicates the subject
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QUESTIONS?
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