EPIC Releases Paper on Renewable Energy Credits

News Release


Scott Anders, Director, Energy Policy Initiatives  Center (619) 260-4589
Ashley Wood, Director of Communications, USD  School of Law (619) 260-4097


Energy Policy Initiatives Center Releases Report on Renewable Energy Credits (REC)

RECs could be important tool to help region meet renewable energy targets


[Download Report]

San Diego, Calif., June 28, 2007—The Energy Policy Initiatives Center (EPIC), a nonprofit research center at the University of San Diego (USD) School of Law, recently released a report that provides a detailed analysis of how the provisions of Senate Bill 107 affect the development of renewable energy credits – or RECs – in California.

“The discussion of RECs is important to the San Diego region,” according to Scott Anders, EPIC’s director. “As we continue to evaluate the need for additional transmission to meet state mandated renewable energy targets, tradable RECs could be one way to provide electric utilities more flexibility in meeting those targets.”

“The basic concept underlying RECs is straightforward,” said Bruce Elder, a third-year USD law student and author of the report. “With each unit of electricity produced, a renewable generator produces two outputs simultaneously, electricity and environmental benefit. RECs are certificates that represent the environmental attributes or “greenness” of renewable production. These RECs can potentially be separated from the associated electricity and sold, either to a voluntary market comprised of purchasers who seek to buy green bragging rights or to a utility that is under a statutory obligation to procure a growing percentage of electricity from renewable sources.”

The report examines the key provisions of SB 107 related to RECs, including the definition, restrictions on creation and transactions, and use of RECs for compliance with California’s renewable portfolio standard, or RPS, which requires electric utilities to purchase 20% of their energy supplies by renewable sources by 2010.

“California’s electric utilities still cannot use tradable RECs to satisfy their RPS requirements, but SB 107 is a step in that direction,” said Elder. “SB 107 authorizes the use of RECs for RPS compliance but gives the California Public Utilities Commission discretion to develop the rules of the game.”

The EPIC report also identifies important issues not addressed in the bill that are critical to development of REC markets in the future.“SB 107 is noticeably silent on several important issues related to RECs,” Elder said.“It does not address the use of RECs in the voluntary market, use of RECs from renewable distributed generation, or some of the legal issues relating to whether a REC is property.”

To download copies of the paper, please see the EPIC website at www.sandiego.edu/epic.


Energy Policy Initiatives Center (EPIC)

EPIC is an academic and research center of the University of San Diego School of Law that studies how energy policy issues affect the San Diego County region and California. EPIC integrates research and analysis, law school study and public education, and provides legal and policy expertise and information about efficient and environmentally responsible solutions to our future energy needs.

USD School of Law

The University of San Diego School of Law is a center of academic excellence focused on preparing its students for legal practice in the new century.One of the most selective law schools in the country, the School of Law’s nationally recognized faculty create a demanding, yet welcoming environment that emphasizes individualized education.USD law school graduates consistently score higher than the state average on the California Bar Exam and go on to practice law throughout the country and abroad, forming an influential network of alumni.The USD School of Law is one of only 80 law schools in the country to have a chapter of The Order of the Coif, the most distinguished rank of American law schools. The school is accredited by the American Bar Association and is a member of the Association of American Law Schools.Founded in 1954, the law school is part of the University of San Diego, a private, nonprofit, independent, Roman Catholic university chartered in 1949. Please visit the Web site at www.law.sandiego.edu for more information.