Regulatory Issues for Market Integration
and Trade in Renewable Energy Resources
in the U.S. Midwest Region
JOHN E. FEIT
Organization of MISO States
MARCH 7, 2011
Market Integration of Renewable Resources
• The Most Significant Factor in the Integration of
Renewable Energy and the Development of a Market
for Renewable Energy in the Midwest is the
Separation of Renewable Energy Into Two Pieces.
• 1. Physical Energy - MWH
• 2. Renewable Attributes
• Physical Energy – MWHs
• Sold into the Midwest ISO Energy Market at the
Location of the Renewable Generator.
• There is No Distinction in the Midwest ISO Energy
Market Between Renewable MWH and
Conventional MWH.
• Separation of the Renewable Attributes from the
Physical Energy has Facilitated the Emergence of a
Separate Renewable Energy Market.
• Renewable Energy Attributes are Converted Into
Renewable Energy Certificates – RECs.
• There is a Separate Market for Renewable Energy
Certificates.
Market for Renewable Energy Certificates
• Midwest Renewable Energy Tracking System
M-RETS
Established Voluntarily by States in Upper Midwest
1 MWH of Renewable Energy → 1 M-RETS Certificate
Functions of the Midwest Renewable Energy
Tracking System
Verification of Renewable Energy Production.
Does a Generator Qualify as Renewable?
How Much Renewable Energy Does it Produce?
Tracking of Renewable Certificates that are Bought and Sold.
Certification of Renewable Energy Production
Midwest Renewable Energy Tracking System:
Certifies the Renewable Energy Production from Each
Renewable Generator Using Meter Data.
Tracks of M-RET Certificates as they are
Bought and Sold.
Facilitates a Market in M-RET Certificates.
Qualification of Renewable Resources
What Qualifies as a Renewable Resource is
Determined by Each State.
Some Resources Qualify in Some States but Not Other
States.
YES
Maybe
Solar
Existing Hydro
Wind
Burning Municipal Waste
Hydro
Resources Located in
Methane from Manure
Another State
Cost Recovery Issues for Regulators
• How to Recover Costs in Rate Structures?
• How to Compensate Utilities for Risks?
• Timing of Cost Recovery.
Issues for Regulators Relating to Incentives
• How to Implement Incentives that Minimize Cost?
• How Much of an Incentive is Just Enough?