Connecticut's Public Utilities Regulatory Authority approved on Tuesday aNew Hampshire-based, 75-MW biomass power plant as eligible to generate Class Irenewable energy certificates.
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The facility, called Burgess BioPower, has a 20-year power purchaseagreement with Public Service Company of New Hampshire.
PSNH will purchase a maximum of 400,000 RECs annually. Assuming 90%efficiency, Burgess BioPower would be capable of generating 591,300 RECs peryear, which means RECs would be leftover that can be sold in other markets,such as Connecticut.
Berlin Station, LLC owns Burgess Biopower. The manager is Cate StreetCapital, an investment firm. The power plant's initial operations began inNovember 2013.
A 75-MW, non-intermittent renewable facility represents a significantinjection of REC supply for a region that is generally struggling to keep pacewith escalating renewable requirements.
In New Hampshire, for example, the Public Utilities Commission recentlyopened an investigation about the REC shortage, and whether it should takeaction to help alleviate the undersupply by tweaking the demand requirements. Otherwise, load-serving entities must pay a penalty fee when they areunable to obtain all of the RECs required under the renewable portfoliostandard. New Hampshire's alternative compliance payment is set at$55.37/Class I REC in 2014, an amount adjusted each year to account forinflation.
PSNH expects a shortfall regarding the 2013 Class I obligation, accordingto a letter it filed in early May with the PUC. The utility has conductedpublic solicitations twice so far in 2014, but received no proposals.
Efforts will continue to be made to purchase Class I RECs through brokersand suppliers until a June 15 deadline reached, PSNH said. Despite theseefforts, the utility does not believe it will be able to buy enough RECs to bein full compliance for 2013, it said.
But the outlook should change in 2014 when Burgess BioPower comes online,PSNH said. The RECs acquired from Burgess BioPower and other sources should besufficient to meet demand, it said.
As for the RECs generated in excess of the amount purchased by PSNH,Monday's decision means these certificates can be directed towardConnecticut's Class I market.
However, competition for the same RECs will exist because BurgessBioPower also qualifies as an RPS-eligible resource in Rhode Island and Maine.
--Geoffrey Craig, email@example.com--Edited by Derek Sands, firstname.lastname@example.org