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distribution utility to which the one or more of the utilities provides wholesale service) in
Minnesota by 2025. The RPS schedule for other Minnesota utilities is as follows:
12% by 12/31/2012
17% by 12/31/2016
20% by 12/31/2020
25% by 12/31/2025
The February 2007 amendments also modified Minnesota's non-mandated, "good faith"
renewable-energy objective. The revised objective, which applies to all utilities, calls for
eligible renewables to account for 1% of all retail electricity sales in 2005 and 7% of all
retail sales by 2010. The Minnesota Public Utilities Commission (PUC) measures
utilities' efforts to meet the objective to determine whether utilities are making the
required "good faith" effort.
In December 2008 the PUC issued an order clarifying how it will evaluate this "good
faith" effort during the years (2006 - 2009) for which no benchmarks are defined by the
statute. The order requires utilities to retire renewable energy credits (RECs) equivalent
to 1% of their annual retail sales for the 2007-2009 compliance years (i.e., the calendar
year). In effect, this appears to both establish a mandatory baseline compliance
benchmark and allow utilities to bank RECs -- subject to the REC trading lifetime
described below -- in preparation for meeting the more stringent 7% objective in 2010. It
could also be interpreted as setting a precedent for addressing similar issues in future
years. Only RECs recorded and tracked through the Midwest Renewable Energy
Tracking System (M-RETS) may be used for compliance with the "good faith" objective
and future standards (see description below).
The 2007 legislation required the PUC to establish a program for tradable RECs by
January 1, 2008. The PUC approved the Midwest Renewable Energy Tracking System
(M-RETS) for this purpose in October 2007 and required all utilities to make a
substantial and good faith effort to register renewable generation assets by March 1,
2008. The program treats all eligible renewables equally and may not ascribe more or
less credit to energy based on the state in which the energy was generated or the
technology used to generate the energy. Notably, Xcel Energy may not sell RECs to
other Minnesota utilities for RPS-compliance purposes until 2021. In December 2007,
the PUC made certain additional determinations for the operation of the REC trading
system, listed below:
RECs will have a trading lifetime of 4 years according to the year of generation
(i.e., all credits generated during 2008, regardless of the month, will expire at the
end of 2012).
The purchase of RECs through M-RETS may be used in utility green pricing
programs, subject to the shelf life described above.
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