The court reversed the lower court’s decision in part and ordered a preliminary injunction against key provisions of Senate Bill 1 that prohibited retail energy suppliers from truthfully marketing their renewable energy products as “green,” “clean,” “100% renewable,” or other similar claims.

“This is a significant win for free speech, consumer choice, and competitive energy markets,” said Chris Ercoli, president and CEO of the Retail Energy Advancement League. 

“From the outset, Senate Bill 1 was a far-reaching attempt to limit consumer access to competitive energy choice. Maryland residents were promised consumer protection, but instead got a law that stripped away their choices, forced customers off competitive products, drove suppliers out of the market, and blocked affordable electricity options — only for provisions of that same law to now be ruled unconstitutional.

“Today’s decision by the U.S. Court of Appeals vindicates the First Amendment right of suppliers to accurately sell electricity products to consumers.

“Consumers benefit from energy suppliers providing truthful information —not arbitrary restrictions on how products can be explained, unless they are from government preferred sources. Competitive suppliers play an important role in expanding access to innovative, affordable and renewable energy options, and they must be able to communicate those offerings appropriately.

“We look forward to continuing the fight of ensuring state policies support — not undermine — consumer access to diverse energy options.”

The U.S. Court of Appeals Fourth District ruled that Maryland failed to demonstrate that the terms used to describe energy products are inherently misleading, and deemed that the district court erred in denying the preliminary injunction requested by REAL and Green Mountain Energy Company. 

REAL was represented by Wiley Rein LLP during this litigation process. Read Wiley’s press release of this ruling here. 

The post Retail Energy Choice Advocates Win Free Speech, Renewable Energy Battle over Maryland Legislation Harming Consumer Options first appeared on Retail Energy Advancement League.

Renewable Energy Certificates (RECs) play a pivotal role in the modern energy market. When electricity is generated, the electrons become indistinguishable once they hit the grid and mix with other electrons, therefore making it difficult to determine their exact sources of generation. RECs help make it easier to distinguish which electrons are from renewable energy versus those that are not. But what exactly are they?

What is a REC?

RECs are a market-based, tradable tool that represents the environmental attributes of one megawatt-hour (MWh) of electricity generation from a renewable energy source. 

RECs can alternatively be called “Renewable energy credits,” “green tags,” or “green energy credits,” but all hold the same meaning. Each REC indicates the source, location, and year of generation. RECs are required to meet regulatory standards set by state regulators and are recommended to follow federal guidelines. They can also be categorized as bundled or unbundled.

Bundled vs. Unbundled

Bundled RECs are sold together with the actual electricity generated from a renewable source, meaning the purchaser receives both the physical energy and the environmental attribute from the same source. This is most common when customers buy power directly from a renewable energy provider, like a wind or solar farm, through a green power purchase agreement. 

Unbundled RECs are sold separately from the electricity itself. In the case of unbundled RECs, the renewable energy is sold into the grid without a specific buyer, and the REC, representing the renewable attribute, is sold independently. Consumers can purchase unbundled RECs to claim the environmental benefits of renewable energy. This flexibility allows broader participation in renewable energy markets, even for those who may not have access to physical renewable power sources.

The Process

When a renewable energy facility generates electricity, it registers with a regional tracking system and is issued a unique serial number, documenting each megawatt-hour (MWh) produced. RECs are then transferred into the electronic GATS account of the generator that generated the power. Once the REC(s) are in the generator’s account, they can do what they see fit with it, although most generators sell their REC(s) to interested parties.

There are ten regional tracking systems that oversee the issuance of RECs. These regional systems were established to document renewable energy production and support the achievement of state-specific renewable energy goals, typically structured through Renewable Portfolio Standards (RPS).

Disclosure Requirements

Many REC markets, especially those with a Renewable Portfolio Standard (RPS), are subject to regulatory oversight, which imposes additional layers of monitoring and auditing. This oversight helps to ensure that each REC is only counted once and is attributed correctly, either to meet regulatory requirements or to substantiate voluntary claims.

RECs play a vital role by sending market signals, fostering regional collaboration, and complementing supportive policies as part of a comprehensive approach towards transitioning to renewable energy sources.

REC disclosure requirements are obligations for the seller to disclose information about RECs when marketed or are a material component of a state or company’s climate goals. State REC disclosure requirements often include information on the amount of renewable energy generated, the source and nature of the energy, a description of the generating project, authentication, and the cost of the REC. Additionally, the Federal Trade Commission’s (FTC) Green Guides offer a baseline requirement to be truthful, not misleading, have evidence, and not be unfair when marketing RECs. The FTC Green Guides are also used as an industry standard when State REC disclosure requirements are absent. 

State requirements for RECs vary by state. Some states place restrictions on which sources and markets can qualify for RECs. States also have different REC retirement limits, such as how long a REC can be held before it must be retired. There are also alternate certifications like Green-e that can be combined with RECs and can offer additional benefits.

Overall, RECs promote renewable energy adoption and offer a way for customers to support renewable energy production indirectly, fostering a transition to cleaner energy systems. RECs are the most reliable way to track and validate the amount of renewable energy being generated and consumed, helping consumers and businesses claim the environmental benefits of that specific RECs’ clean energy production.

REAL Resources

Looking for more information? Check out REAL’s resources for information on how to shop and a fact sheet summarizing RECs. 

• State-Specific Shopping Guides
• Monthly Energy Shopping Summary 
• Renewable Energy Certificates Fact Sheet

The post Watts That? Renewable Energy Certificates Overview first appeared on Retail Energy Advancement League.