A Southern vertically integrated electric company was signing a power purchase agreement (PPA) to secure renewable load. As part of that process, they wanted to know whether a specific tariff for renewable energy would be acceptable to both customers and regulators, and whether it made business sense for the company to pursue for this renewable load. The company needed help investigating green tariff options. Having used MCR to conduct other research and analysis projects, they called on MCR to research and propose suggestions for a green tariff.
Our client wanted to understand what tariff option would be best for its customers to use under this renewable PPA. So MCR conducted an extensive study of the markets for green tariffs and renewable energy credits (RECs) locally and regionally, leveraging research already completed by the utility. We developed a presentation for senior management describing the basics of RECs and green tariffs, as well as green tariff offerings utilized by utilities in their region and in the rest of the United States.
MCR also researched the local jurisdictional authority, examining the dockets, testimony, and orders for other local utilities that had already implemented green tariffs. This information was consolidated to give a complete but summarized view of the regulatory climate for green tariffs. For the utility’s jurisdiction, we were able to show which green tariff options had been successfully implemented, the outlook given by the regulators and their staff on green tariff options, how the local REC market would affect the choice made by the utility, how RECS were accounted for, and what customers were specifically looking for from a green tariff.
Based on this research, we focused on four types of green tariffs that are commonly used and accepted by regulators and customers.
MCR recommended that this IOU move forward with a green power product, as these products are the easiest to implement, are most accessible to all customers, and have a proven track record in our client’s jurisdiction. The client accepted MCR’s recommendation and is expected to file the green tariff once other regulatory priorities are resolved.