Client: Mid-Atlantic Renewable Energy Coalition (MAREC)
Authors: Liz Stanton, PhD, Anna Sommer, Tyler Comings, and Rachel Wilson
Pennsylvania’s 2004 Alternative Energy Portfolio Standards (AEPS) Act requires the Commonwealth’s electric distribution companies and electric generation suppliers to purchase Tier I alternative energy credits (AEC) equal to 6 percent of their retail sales by 2017, rising to 8 percent in 2021. Clinic Director and Senior Economist Liz Stanton, PhD, Anna Sommer of Sommer Energy, LLC, Tyler Comings and Rachel Wilson examined the potential benefits of longer term contracting (10 years and 20 years) for the renewables needed to meet one-half of AEPS as compared to the current practice of purchasing renewable generation and associated AECs at procurement auctions every six months. The conclude that, over a ten-year period from 2018 to 2028, 20-year renewable power purchase agreements (PPAs) for one-half of Pennsylvania’s incremental AEPS requirement would save ratepayers $134 to $331 million. AEC updated price inputs to this analysis in July 2019 and found that renewable PPA costs would continue to compare favorably to auction prices.