Renewable Portfolio Goal

Utah enacted The Energy Resource and Carbon Emission Reduction Initiative (S.B. 202) in March 2008. While this law contains some provisions similar to those found in renewable portfolio standards (RPSs) adopted by other states, certain other provisions in S.B. 202 indicate that this law is more accurately described as a renewable portfolio goal (RPG). Specifically, the law requires that utilities only need to pursue renewable energy to the extent that it is “cost-effective” to do so. The guidelines for determining the cost-effectiveness of acquiring an energy source include an assessment of whether acquisition of the resource will result in the delivery of electricity at the lowest reasonable cost, as well as an assessment of long-term and short-term impacts, risks, reliability, financial impacts on the affected utility, and other factors determined by the Utah Public Service Commission (PSC). For electric co-ops, cost-effectiveness is determined using criteria established by the co-op’s board of directors and for municipal utilities it is determined using criteria established by the municipality’s legislative body.

Goals

Under S.B. 202 — to the extent that it is cost-effective to do so — investor-owned utilities, municipal utilities, and electric co-ops must use eligible renewables to account for 20% of their 2025 adjusted retail electric sales. Adjusted retail sales include the total kilowatt-hours (kWh) of retail electric sales reduced by the kWh attributable to nuclear power plants, demand-side management measures, and fossil fuel power plants that sequester their carbon emissions. For example, if a utility has electric sales of 100 million megawatt-hours (MWh) in 2025, and 10 million MWh was produced at a nuclear plant, the utility would need to produce 20% of 90 million MWh from renewable energy sources to be in compliance.

While RPS policies adopted by most states include interim targets that increase over time, Utah’s goal has no interim targets. The first compliance year is 2025 (although utilities must file progress reports on January 1st of 2010, 2015, 2020, and 2024). Progress reports must indicate the actual and projected amount of qualifying electricity the utility has acquired, the source of the electricity, an estimate of the cost for the utility to achieve their target, and any recommendations for a legislative or program change.

Eligible Technologies

For the purposes of the law, eligible renewables include electric generation facilities that became operational after January 1, 1995, and produce electricity from solar, wind, biomass (under certain conditions), hydroelectric (under certain conditions), wave, tidal, or ocean-thermal energy, geothermal, municipal solid waste, compressed air energy storage (if the energy used to compress the air is generated from a renewable source), or waste gas and waste heat, including methane gas from abandoned coal mines or coal degassing operations with a state-approved mine permit. Solar thermal installations can also count towards the goal with no limit, and their contribution is determined by assessing the amount of fossil fuel consumption they displace. Electricity may be produced within the state, or within the geographic boundary of the Western Electricity Coordinating Council. Notably, each kWh of electricity produced using solar energy counts as 2.4 kWh for the purposes of meeting the goal. 

Renewable Energy Certificates

Utilities may meet their targets by producing electricity with an eligible form of renewable energy or by purchasing renewable energy certificates (RECs). S.B. 99, enacted in March of 2009, granted authority to the PSC to develop or approve a system to track RECs. The legislation specifically referenced the Western Renewable Energy Generation Information System (WREGIS) as an acceptable trading platform. To date the PSC has not adopted a system to track RECs. 

RECs issued pursuant to the state’s guidelines do not expire and may be banked.