Alternative Compliance Payment Rates
Any Retail Electricity Supplier that is required to comply with the Massachusetts Renewable Energy Portfolio Standard (RPS) and Alternative Energy Portfolio Standard (APS) regulations may, if necessary, discharge some or all of its obligations by making an Alternative Compliance Payment (ACP) in the appropriate amount to the Massachusetts Clean Energy Center (MassCEC). The ACP rate for the first year of each standard was specified in regulation . The ACP Rate for each subsequent Compliance Year must be published by DOER by January 31 of that year and must be adjusted in accordance with the previous year's Consumer Price Index (see table below).
The RPS Class I Solar Carve-Out has a different ACP Rate and adjustment that the rest of RPS Class I and is not based on the Consumer Price Index. For all contracts associated with Basic Service load sold by regulated distribution companies to retail customers, as well as for all Competitive Retail Competitive Supplier load under contracts entered on or after January 1, 2010, the Solar Carve Out Rate for 2010 was specified by Regulation at $600. Per the “Guideline on the Forward Schedule of the Solar Carve-Out Alternative Compliance Payment (ACP) Rate,” issued by DOER on December 28, 2011, the ACP Rate remains fixed at $550 per MWh in Compliance Years 2011, 2012, and 2013. Following Compliance Year 2013, the ACP Rate is set to decline by 5% annually. As the Solar Carve-Out ACP Rate schedule is only published for 10 years in advance, each year the ACP Rate for 10 years henceforth must be set by January 31 of the applicable year. For 2022, DOER sought comments on a proposed 5% reduction of the 2021 ACP Rate of $365 per MWh, resulting in a 2022 ACP Rate of $347 per MWh. Having received only positive comments from stakeholders regarding this reduction, DOER officially announced the 2022 Solar Carve-Out ACP Rate of $347/MWh on January 31, 2012.
It should also be noted that Competitive Retail Electric Suppliers may meet their Solar Carve-Out compliance obligations for load under contract prior to January 1, 2010, with an Alternative Compliance Payment at a rate equal to the RPS Class I ACP rate for the applicable Compliance Year.
ACP Rates for the 2013 Compliance Year:
- RPS Class I = $65.27 per MWh
- RPS Class I Solar Carve-Out = $550.00 per MWh
- RPS Class II Renewables = $26.79 per MWh
- RPS Class II Waste Energy = $10.72 per MWh
- APS = $21.43 per MWh
The MassCEC will give each Retail Electricity Supplier a receipt for each ACP transaction. Each Supplier must include copies of its receipts in its Annual Compliance Filing. Suppliers must submit filings for the 2012 Compliance Year to the Dept. of Energy Resources (DOER) no later than Monday, July 1, 2013.
Annual ACP Rate Adjustments
DOER must publish each Compliance Year's adjusted rate for ACPs by January 31 of that Compliance Year (per the RPS/APS regulations). The ACP Rate is equal to the previous year's ACP Rate adjusted up or down according to the previous year's Consumer Price Index (CPI). DOER uses the "Consumer Price Index - All Urban Consumers: Northeast Region All Items," which is issued by the U.S. Bureau of Labor Statistics and is not seasonally adjusted. DOER uses the following formula to calculate the adjusted ACP rate each year:
ACP Rate of Next Compliance Year = (ACP Rate of current Compliance Year) x (CPI of current Compliance Year / CPI of previous Compliance Year)
RPS Class I ACP Rate
RPS Class I Solar Carve-out ACP Rate
RPS Class II Renewable Generation ACP Rate
RPS Class II Waste Energy ACP Rate
APS ACP Rate
This information is provided by the Department of Energy Resources.