Dive Brief:
- Exelon-subsidiary Potomac Electric Power Company (Pepco) is working to reach a new renewable long-term power purchase agreement (PPA) to serve 5% of the District of Columbia's Standard Offer Service (SOS) energy needs.
- Pepco issued a request for proposals (RFP) for the PPA in October 2020, and expects the PPA to be signed within the next two months. Regulators finalized amendments to the District's SOS rules in a March 17 meeting, when it also approved Pepco's revised SOS retail rate and directed the utility to file a revised tariff.
- Clean energy advocates are excited about Pepco's new renewables PPA, because the power supply mix for the utility's SOS program is set through annual competitive auctions in the PJM Interconnection. "That is what helps ensure the new investment in [clean enegy] jobs and infrastructure build-out," David Smedick, senior campaign representative for Sierra Club's Beyond Coal and Dirty Fuels campaigns in Delaware, Maryland and D.C., said in an email.
Dive Insight:
Pepco's SOS serves customers who do not choose an alternate electric supplier, and Smedick says many of the energy supply contracts for the program run about three years.
"So it's not necessarily all fossil, it just depends on the latest auction results and contracts," he said.
The "primary thing" renewables advocates like about the new green requirement is that it is tied to new renewable generation in PJM, said Smedick. He added, "we believe that the 5% commitment could be higher and think it could and should be ramped up in the coming years to be more consistent with the District's climate targets."
The District is aiming to reach 100% renewable energy by 2032.
"We’re taking direct action to reduce greenhouse gas emissions by promoting the construction of new renewable energy generation within the PJM Interconnection grid region," D.C. Public Service Commission Chairman Willie Phillips said in a statement.
Pepco's new renewable PPA is projected to be completed by May of this year "and approved by the commission by August," according to utility spokesperson Jamie Caswell.
The utility's RFP sought a mix of new utility-scale solar and onshore wind resources located within PJM, to produce 154,000 MWh annually. Pepco said that generation equates roughly to a 50 MW onshore wind facility or a 70 MW solar facility. Renewables paired with energy storage are also being considered, the utility said.
Pepco is looking for PPA proposals running 15 or 20 years, with an in-service date of June 1, 2024.
"Long term contracts for clean energy are a critical tool to grow wind and solar infrastructure and jobs, lower utility bills, and combat climate change," Smedick said. "In the region and across the country it's clear that long term contracts with wind or solar are already cost-competitive with, and often less costly than, existing [SOS] procurement."
Pepco's program, said Smedick, will save D.C. ratepayer dollars "because it directly connects the SOS program to a clean energy project that doesn't suffer from harmful fuel price fluctuations that are often seen in the coal and fracked gas industries."
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DC first in Mid-Atlantic to require long-term renewable PPA for standard offer customers - Utility Dive
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