After its swift progress through the state’s legislature, Governor Carney signed Senate Bill No. 33 (“SB 33”) on February 10. The bill extends and expands Delaware’s Renewable Portfolio Standard (“RPS”) and alters the previous statute’s RPS freeze requirements, which has long caused controversy at the Public Service Commission (“PSC”). While it encourages more renewables like solar in the future, some think it’s still not enough to catch up to Delaware’s East Coast neighboring states.
The bill, sponsored by State Senator Stephanie Hansen, extends the schedule under Title 26 of the Delaware Code which mandates that an increasing percentage of electrical energy sales must come from renewable energy sources each year. Prior to this bill, this percentage increased incrementally until 2025, plateauing at a goal of 25% renewable energy. SB 33 sets a goal of 40% renewable energy by 2035, increasing both the goal and the timeline.
As passed, solar energy accounts for a quarter of the total 2035 RPS’ solar carve-out, the solar energy specific portion of the renewable energy mandate, or 10%, reinforcing the need for a solar renewable energy certificate (“SREC”) program. Under the RPS, utilities must procure SRECs, which each represent 1 MWh of renewable energy generation, to comply with the solar carve-out requirement and avoid paying an Alternative Compliance Payment (“ACP”). SRECs are generated by registered residential and commercial solar energy systems in the state.
At this point, only Delmarva Power, the only state regulated utility with compliance obligations under the RPS, is required to purchase DE SRECs. SB 33 does not alter this. Although municipal utilities and rural cooperatives are encouraged to meet the renewable energy goals, they can elect to exempt themselves from the requirements by detailing an alternative approach to achieving a level of renewable energy penetration in their service area. Instead of paying the ACP, they will either contribute to the state’s Green Energy Fund or an independent fund.
Since SB 33 did not alter Delmarva’s position as the sole complier and as such, it is unlikely that the legislation will result in alterations to their SREC procurement structure, which relies on the annual SREC Delaware competitive solicitation for SRECs.
However, this annual solicitation did not occur in 2020. This is due to conflict over the previous RPS statute’s freeze provision at the PSC, which led Delmarva to hold off on a 2020 solicitation. SB 33 fixes the freeze language. Under the new law, an RPS freeze will go into place if more than 15% of the carve-out is met by ACPs rather than through the purchase of SRECs. With this alteration, the legislature added a layer of certainty and it is our hope that the alterations reduce the likelihood of another missed year of the SREC solicitation in Delaware.
We are thankful for SB 33 and its sponsors like State Senate Environmental & Energy Committee Chair Stephanie Hansen. We look forward to Delaware’s bright renewable future.