The Treatment of Renewable Energy Certificates, Emissions Allowances, and Green Power Programs in State Renewables Portfolio Standards

Twenty-one states and the District of Columbia have adopted mandatory renewables portfolio standards (RPS) over the last ten years. Renewable energy attributes—such as the energy source, conversion technology, plant location and vintage, and emissions—are usually required to verify compliance with these policies, sometimes through attributes bundled with electricity, and sometimes with the attributes unbundled from electricity and traded separately as renewable energy certificates (RECs). This report summarizes the treatment of renewable energy attributes in state RPS rules. Its purpose is to provide a source of information for states considering RPS policies, and also to draw attention to certain policy issues that arise when renewable attributes and RECs are used for RPS compliance. Three specific issues are addressed:

1. the degree to which unbundled RECs are allowed under existing state RPS programs and the status of systems to track RECs and renewable energy attributes;
2. definitions of the renewable energy attributes that must be included in order to meet state RPS obligations, including the treatment of available emissions allowances; and
3. state policies on whether renewable energy or RECs sold through voluntary green power transactions may count towards RPS obligations.