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Alternative and Renewable Energy Portfolio Standard

Investor-Owned Utility
Retail Supplier
Savings Category 
Fuel Cells
Program Info
West Virginia
Program Type 
Renewables Portfolio Standard
West Virginia Division of Energy

In June 2009, West Virginia enacted an ''Alternative and Renewable Energy Portfolio Standard'' that requires investor-owned utilities (IOUs)* with more than 30,000 residential customers to supply 25% of retail electric sales from eligible alternative and renewable energy resources by 2025.

While this law contains some provisions similar to those found in renewables portfolio standards (RPSs) adopted by other states, West Virginia's standard does not require a minimum contribution from renewable energy resources. It is therefore feasible that the standard could be met using only alternative resources and avoid using any renewable resources (as defined in the law). As a result, the renewable energy portion of the standard functions more like a non-binding goal.

The standard sets the following minimum benchmarks for electric utilities based on their annual electricity sales:

  • 10% from 2015 to 2019
  • 15% from 2020 to 2024
  • 25% by January 1, 2025

Utilities must submit compliance plans to the PSC by January 1, 2011, for review and approval. Within a year of receiving approval from the PSC, utilities must submit annual reports outlining their progress towards compliance. The PSC will evaluate compliance after January 1, 2015 and impose non-compliance assessments if the utility fails to comply with the standard.

'''Qualifying Alternative and Renewable Energy Resources'''
To qualify, electricity produced by alternative and renewable resources must be generated or purchased from a facility in West Virginia or in the [ PJM Service Territory] (the regional transmission organization which serves the state). The West Virginia Public Service Commission (PSC) is authorized to certify additional resources as either alternative or renewable. Furthermore, projects that reduce or offset greenhouse gas emissions and certain demand-side or efficiency projects may be certified and counted towards meeting the standard.

'''''Alternative Energy Resources'''''
In West Virginia, "alternative energy resources" include coal technology, coal bed methane, natural gas, fuel produced by a coal gasification or liquification facility, synthetic gas, integrated gasification combined cycle technologies, waste coal, tire-derived fuel, pumped storage hydroelectric projects, and recycled energy (through June 2010).

'''''Renewable Energy Resources'''''
The definition of "renewable energy resources" includes solar-electric, solar thermal energy, wind power, run-of-river hydropower, geothermal energy, fuel cells, and certain biomass energy and biologically-derived fuels. S.B. 350 enacted in April 2010 changed "recycled energy" from classification as an "alternative energy resource" to a renewable energy resource (effective in June 2010).

'''Energy Credits'''

Compliance is based on alternative energy credits (AECs), and banking of excess credits is allowed. A credit is equal to a megawatt-hour (MWh) of alternative or renewable electricity generation. The PSC will establish a credit-trading system and public registry to track transactions. Credits will be awarded in the following way:

  • One credit for each MWh of electricity generated or purchased from an alternative energy resource facility. It should be noted that utilities may meet no more than 10% of the standard with credits obtained from electricity generated from natural gas.
  • Two credits for each MWh of electricity generated or purchased from a renewable energy resource facility
  • Three credits for each MWh of electricity generated or purchased from a renewable energy resource facility located on a reclaimed surface mine in West Virginia
  • Customer-generators will be awarded one credit for each MWh of electricity generated from an alternative energy resource facility and two credits for each MWh of electricity generated from a renewable energy resource facility.
  • The PSC is authorized to award one credit to an electric utility for each ton of carbon dioxide-equivalent reduced or offset by approved projects.
  • The PSC is also authorized to award one credit to an electric utility for each MWh of electricity conserved by an approved energy efficiency or demand-side management project, provided that the project savings are verified and certified according to PSC rules (to be determined).

In November 2011, the PSC ruled (Case No. 11-0249-E-P) that for PURPA qualifying facility (QF) contracts where AEC ownership is not addressed, the AECs are conveyed to the purchaser of the power.

''*Including electric distribution companies or electric generation suppliers selling to retail customers. Municipal utilities, rural electric cooperatives, and other utilities serving fewer than 30,000 residential customers are specifically excluded from the standard, although the Public Service Commission (PSC) will consider adopting, by administrative rule, alternative and renewable requirements that would apply to these utilities.''