Auction Opt-In Term
Each solar installation, as part of its RPS Solar Carve-Out qualification by the Department of Energy Resources (DOER), will be given a set term of years during which it will have the right (but not the requirement) to deposit Solar Renewable Energy Certificates (SRECs) into the Auction Account. The term begins at 40 quarters or 10 years for Compliance Year 2010; however, it may be adjusted annually. All projects installed in a given year will be given the same term established for that year. The term for a project already installed/qualified does not change.
DOER will establish an Auction Account on the NEPOOL GIS system. SRECs that have been generated within the Auction Opt-In Term prescribed to that project by DOER at the time of its qualification for the Solar RPS Carve-Out are eligible to be deposited into the Auction Account. The Auction Account will be open to accept deposits of eligible, unsold SRECs during the final 31 days of the Compliance Year's 4 th quarter trading period (May 16-June 15).
Re-Minted Auction Account Attributes
DOER, in coordination with the NEPOOL GIS, will re-issue the SRECs deposited into the Auction Account as Re-minted Auction Account Attributes. The Re-minted Auction Account Attributes have an initial shelf life of two years, which allows them to be used for compliance for either one of the next two Compliance Years.
Auction Timing and Design
DOER will hold a fixed-price auction for the Re-minted Auction Account Attributes no lter than July 31 and after it has announced the adjustment to the Minimum Standard. The auction will only be held during the years that SRECs have been deposited into the Auction Account.
The Auction is open to any qualified bidders. However, bidders who are not licensed retail electric suppliers in Massachusetts with RPS compliance obligations are required to provide financial security prior to the auction to cover their full bid amounts. The Auction has a fixed price at $300/MWh. Bids are for the volume of Re-minted Auction Account Attributes that bidders are willing to buy for this fixed price.
Auction Safety Valves
If the bid volume is insufficient to clear the volume of available Re-minted Auction Account Attributes, then the shelf life of the Re-minted Auction Account Attributes is increased to three years (enhancing their market value), and the auction is repeated. If the bid volume is still insufficient to clear the volume of the available Re-minted Auction Account Attributes, then the Minimum Standard for the new Compliance Year is re-adjusted by increasing the MWh obligation by the total volume of SRECs that were deposited into the Auction Account. The auction is repeated with the shelf life remaining at three years. If the third (and final) Auction does not clear, the Re-minted SRECs deposited in the Solar Credit Clearinghouse Auction Account shall be allocated to the bidders in a pro-rated manner so that an equal percentage of Re-Minted SRECs are allocated from each Generation Unit that deposited SRECs. The remaining Re-minted SRECs shall be returned to the Owner or Operator of the Generation Unit who made the deposit. These SRECs shall be eligible in any of the three subsequent Compliance Years from the year in which they were generated to meet obligations under the Massachusetts Solar Carve-Out Minimum Standard, and may be sold by the Owner or Operator of the Generation Unit.
Clearing the Auction
Once the auction clears, each bidder is awarded a portion of the total available SRECs proportional to the bidder's bid volume, relative to the total bid volume. Each successful bidder is required to submit payment for the awarded volume within 10 business days.
Auction Revenues and Fee
Revenues received from the Auction are redistributed to the generators who deposited SRECs into the Auction Account, minus an auction fee (5% or $15/MWh). DOER oversees the auction fees received, which are used to defer any auction costs and to benefit the continued development of renewable energy in the Commonwealth.
DOER selected World Energy Inc. headquartered in Worcester, MA to manage and operate the Solar Credit Clearinghouse auction. In the event that there is a deposit into the Auction Account all auction documents have been prepared. To view the documents, click here.
This information is provided by the Department of Energy Resources