William P. Short III, a leading expert on renewable energy, delivered a compelling presentation at the Energy in the Northeast 2008 Conference held in Boston on Nov 17-18, 2008, outlining the flaws in present-day REC-based RPS programs and offering a comprehensive solution to revise these programs in order to offer ratepayers meaningful economic benefits in excess of the cost the RECs.

Mr. Short's thesis asks why renewable energy credits are valued the same regardless of the time of day and year when the energy is produced and the distance the generation is from load.

He argues that existing public policies reward all renewables the same even if certain renewable generation is not capable of meeting peak demand and is located far from load centers.

Mr. Short suggests that a far better method would be to adjust the RECs for their Time-Of-Year, Time-Of-Day and locational values, giving more REC credit for on-peak, on-season and closer-to-load generation and less credit for those renewables which do not satisfy these criteria.

Citing studies by NYISO/NYSERDA in 2005 and ISO-NE in 2006, Mr. Short argues that, upon application of proper valuation of RECs, all RPS programs would be cost effective to ratepayers and a minimum price (floor price) should be implemented to enable more cost effective project financing.

Finally, he argues for the unlimited purchase all RECs as well as the creation of central buyers of RECs, similar to the NYSERDA program, at their value-adjusted prices.

He believes that this proposal would lead to lower power prices to ratepayers even after the cost of the REC is included in the cost the power.

Mr. Short can be reached at w.shortiii@verizon.net and (917) 206-0001.

Click on the link below to view Mr. Short's presentation materials.

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WilliamShort_RPSFlaws.pdf (108.35 kB)