Bidder
Frequently Asked Questions
(FAQs)
for the 2016 Massachusetts RPS
Solar Credit
Clearinghouse Auctions
Auction Date: July 29, 2016
Issued by:
The Commonwealth of Massachusetts
Department of Energy Resources
100 Cambridge Street, Suite 1020
Boston, MA 02114
http://www.mass.gov/doer
Issued on July 6, 2016
Administered by:
EnerNOC, Inc.
100 Front Street, 20th Floor
Worcester, MA 01608
Bidder – SREC Auctions Frequently Asked Questions
Contents
1
Frequently Asked Questions Overview ............................................................................ 1
2
Auction Related Questions .............................................................................................. 1
3
SREC Policy Related Questions ...................................................................................... 7
Issued on July 6, 2016
Page ii
Bidder – SREC Auctions Frequently Asked Questions
1
Frequently Asked Questions Overview
In the course of conducting the 2016 Solar Credit Clearinghouse Auctions, the Massachusetts
Department of Energy Resources’ (DOER) administered an online question and answer
process. This document generalizes and summarizes some of the frequently asked questions
(FAQs) received through the online question and answer process.
All relevant documents referenced in this FAQ document, including the SREC Auction Notices
for the 2016 Solar Credit Clearinghouse Auctions and Qualification Applications for the 2016
Solar Credit Clearinghouse Auctions can be found in an electronic format at the following
website (Auction Website):
https://www.wesplatform.com/WebPortal/Public/Announcement.aspx?ID=7Pi67GLu9ng%3d
Please note: These Questions and Answers are provided to assist applicants in understanding
the auction process and the corresponding requirements. However, all the information needed
to participate in the 2016 SREC Auctions can be found in the SREC Auction Notices. Please
review the SREC Auction Notices carefully before completing the Qualification Applications.
2
Auction Related Questions
Questions and answers provided in this section relate to the auction, clearing, and settlement
procedures.
1. SREC Auction Notice Section 6.3 states "If there is an odd number of SREC deposited
a random number generator will be used for any ties." Please describe the
methodology and seed selection method used for this random number algorithm.
Bids are evaluated by their assigned random number that is generated by a computer. The
Auction Platform utilizes the built in random number generation capabilities of Microsoft.net.
Specifically, the Auction Platform employs the random number generator implemented in
Microsoft.net’s Random class. Microsoft.net’s random number generator, seeded with an
integer representing the current time and date from the computer’s system, will produce a
sequence of random numbers that meet the statistical requirements for randomness.
2. The SREC Auction Notice doesn't clearly state how partial SRECs are handled. For
example, if only 10% of SRECs clear, then systems that entered any number of
SRECs not a multiple of 10 would have partial SRECs that cleared, e.g. a system that
entered 9 SRECs would clear .9, which is not possible. Another system that entered 1
SREC would clear .1, again not possible. Will you treat both these systems the same
and apply your random number algorithm, i.e. the system that entered only 1 SREC
has just as much chance of selling 1 SREC as the system that entered 9 SRECs? Note
that this would create a large disparity that discriminated against larger system; in
the above example the small depositor would have a 10% chance of selling 100% of
their SRECs while the larger depositor would have a 10% chance of selling only 11%
of their SRECs.
SREC Auction Notice Section 5.1 Auction Overview describes the SREC settlement
process. Figure 6, SREC Tiebreaking Process Example, illustrates the answer to this
question. In this example cumulative demand exceeds the quantity of SRECs offered for
sale; however, even if cumulative demand is less, the procedures are essentially the same.
Issued on July 6, 2016
Page 1
Bidder – SREC Auctions Frequently Asked Questions
As stated in the notice, if cumulative demand is less than the quantity of SRECs offered for
sale after the third auction, each bidder’s bid is awarded a pro-rata share of the total SRECs
offered for sale proportional to each of the bidder’s bid quantity, relative to the total
cumulative demand. As shown in the figure, bidders who submit small bids may receive no
awards. In this example, the pro-rata share of a small bid may be rounded down to zero (0)
resulting in no awards to that bidder.
This same procedure will be utilized for SREC sellers. If cumulative demand is less than the
quantity of SRECs offered for sale after the third auction, each seller’s offer quantity is
awarded a pro-rata share of the total SRECs offered for sale proportional to each of the
seller’s offer quantity, relative to the total available supply.
Bidders and sellers that only enter only 1 SREC may not receive an award, due to rounding,
if aggregate demand is significantly less than aggregate supply. The Auction Platform does
allow bidders to submit an unlimited number of bids; however, the more bids submitted the
greater the potential for unpredictable rounding outcomes.
3. If none of the auctions clear, are the SRECs sold on a pro-rata basis (e.g. if demand is
only equal to 50% of supply, 50% of a depositor’s SRECs will be sold).
Please see the planned outcomes for each of the SREC I and II auction rounds.
1. If cumulative demand is insufficient to clear the quantity of either SREC I and/or II
offered for sale, then the said 2017 SREC I and/or II Auction(s) is deemed “void” and the
shelf life of the SRECs is increased to three (3) years after the year in which the SRECs
were generated (enhancing their market value), and a second 2017 SREC I & II Auction
is repeated within three (3) business days.
2. If the cumulative demand in the second 2017 SREC I and/or II Auction is still insufficient
to clear the quantity of SRECs offered for sale, then the second 2017 SREC I and/or II
Auction is deemed “void”, and the Minimum Standard for the next Compliance Year (the
year subsequent to one in which the SRECs were generated) is adjusted for a second
time by DOER by increasing the MWh obligation by the total volume of SRECs that were
deposited into the Auction Account. The 2017 SREC I and/or II Auction is repeated a
third time within three (3) business days with the shelf life remaining at three years.
3. If the third (and final) auction for 2017 SREC I and/or II does not clear, the SRECs are
allocated to bidders in a pro-rata manner. This means that each bidder receives the
quantity of SRECs for which it had bid based on a pro-rata distribution of from the
SRECs that had been deposited from each GIS Asset. Each SREC depositor will sell an
equal percentage of SRECs. The remaining (uncleared) SRECs are returned to the
Owners or Operators of the GIS Assets that made the deposits, and those Owners or
Operators can then sell those SRECs for compliance in any of the three (3) Compliance
Years subsequent to the year in which they were generated.
If neither of the first two auction rounds clear, then no SRECs are transacted. If the third
auction also fails to clear, the SRECs will be sold on a pro-rata basis.
4. The SREC Auction Notice provided information about the settlement and wire
transfer process for bidders, but there isn’t anything about how SREC depositors
should indicate the bank account to which funds should be wired after the auction
Issued on July 6, 2016
Page 2
Bidder – SREC Auctions Frequently Asked Questions
for each NEPOOL account. Please provide information about how to tell the
Auction Platform where to wire the funds? Since a depositor cannot remove
SRECs from the NEPOOL clearinghouse auction account once the SRECs are
deposited, it is important to know before what the process is for getting paid for
them after the auction.
After the auction clears, bidders have ten (10) days to make payment. Within ten (10) days
after receipt of payments World Energy will deposit funds from the sale of the SRECs into
depositor’s or aggregator’s bank accounts. Depositors need to submit the SREC Auction
Proceeds Transfer Form to World Energy providing their bank account information. . The
SREC Auction Proceeds Transfer Form has been posted on the Procurement Website and
is also contained in Appendix A of the SREC Auction Notice.
5. There are a lot of materials on line for bidders in the upcoming MA SREC Auction.
However, as depositors into the auction, is there any information we have to
provide in order to be set up to receive the incoming funds from bidders? Will we
be asked for bank transfer information at a later date? Do we need to submit any
application materials to become eligible?
Please see the response to Question 4.
6. Do depositors have to submit the Qualification Application or only the
bidder? When is it due?
Depositors do not have to submit the Qualification Application. Bidders must fill out the
Qualification Application and submit it to the SREC Auction Manager by due date listed in
the SREC Auction Notice. However, depositors do need to fill out and submit the SREC
Auction Proceeds Transfer Form, which can be found on the Procurement Website and in
Appendix A of the SREC Auction Notice.
7. When do the depositors receive the proceeds of their SREC sales in the auction?
The date will vary depending on which round ends the auction. Bidders have ten (10) days
to settle their purchases and within ten (10) days after that date, depositors and aggregators
will receive payment for their SRECs. Auction proceeds will be disbursed to system
aggregators, if applicable, and it will be up to the aggregator to distribute the funds to
individual asset owners.
8. Can market participants, even if they are not bidders, watch the auction as it takes
place? Essentially will there be the ability to watch bids accumulate (or not
accumulate) during the auction itself?
No, neither bidders nor market participants can watch the auction as it takes place. Only the
Auction Manager and DOER will be able to view the auction as it takes place. Bidders will
only be able to see the bids they have placed in the RFP.
Issued on July 6, 2016
Page 3
Bidder – SREC Auctions Frequently Asked Questions
9. Will the SREC Auction manager publicize the names of bidders registered for the
auction prior to the auction beginning?
No, to protect against possible collusion, the names of registered bidders will not be made
public.
10. How soon after the auction occurs will the final results be publicized?
For an auction round that does not clear, the next round of the auction must be conducted,
per DOER regulation, within three (3) business days. To accommodate this schedule, the
results of the Auction (i.e., whether it clears or not) will be publicly announced within 24
hours after the conclusion of the Auction.
11. How the results of the Massachusetts SREC auction will be disclosed?
Auction results will be posted on DOER’s website www.mass.gov/doer.
12. What year of compliance obligation is the basis for the limit between need
collateral and do not need collateral?
The compliance year obligation that will be used to determine whether a bidder needs to
submit financial security is the prior year’s compliance obligation.
13. What is the difference, and where can we find the GIS Account Number, The
Company ID number, The GIS Asset ID #, and the Unit ID #?
The information required on Qualification Application Form 3 – Evidence of a NEPOOL GIS
Account is the following:

Company Name of the NEPOOL GIS Account Holder

Company Identification Number of the NEPOOL GIS Account Holder

NEPOOL GIS Account Contact
Information necessary to complete this form must be obtained from the NEPOOL
Generation Information System (NEPOOL GIS).
14. Can you confirm that the maximum amount of security required to be posted is
$100,000?
The requirement to post financial security as well as the amount depends on whether the
Applicant is a licensed RES in Massachusetts with a RPS compliance obligation and
whether it is bidding in excess of its actual compliance obligation. Financial security
requirements for each of the three (3) scenarios are as follows:
•
If the Applicant is a licensed RES in Massachusetts with a RPS compliance
obligation and is not bidding in excess of its actual compliance obligation, then
financial security does not need to be posted. Such Applicants will receive a
financial security credit equal to their actual compliance obligation based on the
amount of load they served in the previous compliance year.
Issued on July 6, 2016
Page 4
Bidder – SREC Auctions Frequently Asked Questions
•
If the Applicant is a licensed RES in Massachusetts with a RPS compliance
obligation and is bidding in excess of its actual compliance obligation, then
financial security must be posted to cover its excess bid amounts. Such
Applicants will also receive a financial security credit equal to their actual
compliance obligation plus any additional financial security that was posted.
•
If the Applicant is a non-Retail Electric Supplier in Massachusetts without a RPS
compliance obligation, then financial security must be posted to cover its full bid
amounts.
In order for an Applicant, who is required to provide financial security, to participate in an
SREC Auction, financial security, in United States dollars (USD), must be received from the
Applicant no later than date and time listed in the SREC Auction Notice.
The amount of financial security submitted or credited to the Applicant, in the case it is a
licensed RES in Massachusetts with a RPS compliance obligation and is not bidding in
excess of its actual compliance obligation, will be set as such Applicant’s financial bidding
limitation in a SREC auction.
There is no maximum or minimum financial security required to participate. Each bidder
must independently determine how much financial security to provide depending upon its
own unique circumstances.
15. Does posting the maximum amount of security allow you to bid for as many
SRECs as you wish?
Please see the response to Question 14.
Questions for the 2016 Auctions for SREC’s I & II
16. Is the Financial Security amount required to be filled in on the application due on
July 13th or do we have until July 22nd (the date the financial security is due) to
determine the exact amount that we’ll be sending?
The response due on July 13th is for each bidder to indicate a non-binding amount of
financial security they anticipate posting. It provides us with an expectation of what is to be
posted. Bidders are able to post a different amount of financial security up to the July 22nd,
so long as the amount is within the parameters stated in the respective auction notice.
17. Are we also able to post no financial security if we decide by the 22nd not to
participate in the auction (even if we indicated a larger amount that we initially
planned to post)?
Yes, please see the response to question 16.
Issued on July 6, 2016
Page 5
Bidder – SREC Auctions Frequently Asked Questions
18. Per the email from the DOER on July 6th, Bidders without a retail obligation are
limited to posting a maximum of 10% of the total auction volume. This is a change
from last year. Can you confirm that this is the case?
Effective prior to the 2015 DOER SREC I auction, Bidders without compliance obligations
may only post financial security in an amount up to 10% of the value of the total auction
quantity. Bidding limitations would then be enforced to allow Bidders to submit bids for
quantities valued at or below their bidding limitation. Bidders will not be able to submit bids
in excess of their bidding limitation and, therefore, could not be awarded SRECs in excess
of their bidding limitation.
19. If a Retail supplier’s previous year’s compliance obligation that is greater than the
total volume of the SREC auction, can they bid for the total volume of the auction
without having to post financial security? Can they bid in excess of the total
auction volume?
Bidders with compliance obligations may bid up to the full auction quantity (depending on
the assigned compliance obligation and whether or not additional financial security is
posted).
To answer your first question; yes, an entity with a greater obligation than the total volume in
the SREC auction can bid on the total volume without having to post financial security. For
the second question; no bidders will be able to submit bids for quantities in excess of the
total auction quantity.
20. We intend on taking part of both SREC auctions. Do we have to submit two
Qualification Applications? One for each of the SRECs?
Yes, bidders are required to submit an application for each auction they wish to participate
in. In the event a bidder intends on participating in both SREC I and SREC II auctions, an
application for each is required to be submitted.
21. Assuming we are told our load is 10,000 MWh and given that the percentage of
SREC IIs for next year is 0.7851%, for this example, our SREC II requirement in
2016 will be 79 SREC IIs. Should I decide to bid for more SREC IIs then the 79, may
I bid for 10% of the total of 66,440 or only (66,440 – 79 = 66,361)? In other words,
do I need subtract my required SREC II obligation from the auction total and then
can only bid on the 10% of the remainder?
You do not need to subtract the compliance quantity from the total auction quantity when
determining the maximum amount of financial security that may be posted. The additional
financial security would be handled independently and could be up to 10% of the value of
the total auction quantity.
Issued on July 6, 2016
Page 6
Bidder – SREC Auctions Frequently Asked Questions
3
SREC Policy Related Questions
Questions and answers provided in this section relate to the auction, clearing, and settlement
procedures.
1. How much will DOER adjust the SREC obligation in the second auction if the first
auction fails?
The SREC compliance obligation is adjusted before the first round of the auction, and again
if the second auction fails. The number of SRECs that are added to the obligation each time
is equal to the number of SRECs that were deposited into the auction account.

For the 2013 Solar Credit Clearinghouse Auction, 38,866 SRECs were deposited
into the auction account.

For the 2014 Solar Credit Clearinghouse Auction, the number of SRECs deposited
into the auction account will be announced on Tuesday, June 17, 2014.
In the first auction, 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 second auction is held. If
the bid volume in the second auction is insufficient to clear the volume of the available Reminted Auction Account Attributes, then the SREC obligation in 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 prorated manner so that an equal percentage of Re-Minted SRECs are allocated from each
Generation Unit that deposited SRECs. The remaining Re-Minted SRECs will be returned to
the depositor with their 3-year shelf life.
Issued on July 6, 2016
Page 7
Bidder – SREC Auctions Frequently Asked Questions
2. How will reminted SRECs be designated in NEPOOL so that market participants know
they are "reminted" SRECs?
The re-minted SRECs will be flagged in NEPOOL GIS to denote the extended life.
Specifically, the RPS designation goes from “MA Solar Carve-Out Unit” to “MA Auction Solar
Carve-Out Unit”. This new designation allows the re-minted SRECs to maintain the
additional two or three year life span in NEPOOL GIS (depending on which round the
auction clears), and differentiates the re-minted SRECs eligible to be banked multiple years
vs. the SRECs that cannot. The re-minted SREC will maintain the original serial number.
3. Can SRECs deposits be made up until June 15?
Yes.
Questions for the 2017 Auctions for SREC’s I & II
1. What will happen if the SREC I and/or II auctions do not have sufficient demand to
meet the supply?
Each auction round has a different protocol. Below I have copied and pasted the information
directly from the “SREC I and II Auction Notice” detailing the procedure for each of those
instances:
Figure 1 displays the clearing process for the 2017 SREC I & II Auction(s).
Figure 1: SREC I & II Auction Clearing Process
1. If cumulative demand is insufficient to clear the quantity of either SREC I and/or II
offered for sale, then the said 2017 SREC I and/or II Auction(s) is deemed “void” and the
shelf life of the SRECs is increased to three (3) years after the year in which the SRECs
were generated (enhancing their market value), and a second 2017 SREC I & II Auction
is repeated within three (3) business days.
2. If the cumulative demand in the second 2017 SREC I and/or II Auction is still insufficient
to clear the quantity of SRECs offered for sale, then the second 2017 SREC I and/or II
Auction is deemed “void”, and the Minimum Standard for the next Compliance Year (the
Issued on July 6, 2016
Page 8
Bidder – SREC Auctions Frequently Asked Questions
year subsequent to one in which the SRECs were generated) is adjusted for a second
time by DOER by increasing the MWh obligation by the total volume of SRECs that were
deposited into the Auction Account. The 2017 SREC I and/or II Auction is repeated a
third time within three (3) business days with the shelf life remaining at three years.
3. If the third (and final) auction for 2017 SREC I and/or II does not clear, the SRECs are
allocated to bidders in a pro-rata manner. This means that each bidder receives the
quantity of SRECs for which it had bid based on a pro-rata distribution of from the
SRECs that had been deposited from each GIS Asset. Each SREC depositor will sell an
equal percentage of SRECs. The remaining (uncleared) SRECs are returned to the
Owners or Operators of the GIS Assets that made the deposits, and those Owners or
Operators can then sell those SRECs for compliance in any of the three (3) Compliance
Years subsequent to the year in which they were generated.
2. How do I calculate my RFP compliance obligations for this 2017 MA DOER SREC
Auction?
Each Retail Electric Supplier (RES) in Massachusetts will have a RFP compliance obligation
based on their load service for the year. Please see the example below:
LSEs
2016 Load
(MWh)
2017 Minimum
Standard
RES Example A
RES Example A
1,000,000
1,000,000
1.6313%
2.8628%
Requirement
(SREC qty)
16,313
28,628
Category
(SREC)
SREC I
SREC II
I will email to each entity with their RPS compliance obligations once calculated by the MA
DOER.
3. Is the Qualification Application a binding document? If we choose to alter the amount
of financial security that we deposit, will it be an issue?
No, the Qualification Application is not a binding document.
Please email the [email protected] if you choose to submit a
different amount of financial security than original indicated.
Issued on July 6, 2016
Page 9