January 20, 2011
Westar seeks OK to use RECs to meet RPS
TOPEKA, Kansas, January 20, 2011 — Westar Energy has applied to the KCC for permission to use renewable energy credits (RECs) to meet Kansas’ renewable portfolio standard (RPS) for the years 2011 and 2012. The RPS requires electric utilities in the state to include a certain percentage of renewable energy in their generation mix. For the years 2011 and 2012, the standard calls for 10% of the utility’s peak demand to be from renewable sources. Utilities are permitted to use renew-able energy credits to meet a portion of the requirements for 2011, and for other years at the discretion of the Commission.
Renewable energy credits, or RECs, are tradable commodities that are, in essence, certificates that warranty that the utility has generated or purchased a specified amount of renewable energy. A utility that generates more renewable energy than it needs to satisfy state RPS standards, or that operates in a state without RPS standards, can sell RECs to other utilities that need more renewable energy in their portfolios, but find it more economical to purchase RECs than to generate or purchase renewable energy.
Westar has retained its RECs and now wants to use them to satisfy part of its near-term RPS requirements. Since 2008, Westar has accumulated RECs through the operation of its wind farms and its purchases of wind energy. The company anticipates that wind projects currently planned for construction will help Westar meet RPS requirements in later years, but says that it does not currently generate or purchase enough renewable energy to meet the current standards.
Although the RPS statute calls for penalties if a utility fails to meet the standards, the statute also permits the Commission to waive the penalty if the utility has made a “good faith effort to comply." Westar has requested a waiver. The company says that it has several projects underway that will enable it to meet the standards in later years, and that it should be allowed to use the credits for the renewable energy it generated before the RPS standards were imposed in the interim.
CURB has intervened and is analyzing the application.
KCC Docket No. 11-WSEE-438-MIS