It requires the Autoridad de Energía Eléctrica de Puerto Rico (Puerto Rico Electric Power Authority or PREPA)* to supply 20% of retail electricity sales from eligible "green energy" resources by 2035. Green energy resources fall into two categories. The first category is "Sustainable Renewable Energy" which includes solar, wind, geothermal, renewable biomass, qualified hydroelectric energy, marine and hydrokinetic, ocean thermal, and any other "clean or renewable energy" as defined by the Commonwealth Energy Public Policy Office via future regulation. The second category is "Alternative Renewable Energy," which includes energy derived from municipal solid waste (MSW), landfill gas, anaerobic digestion, fuel cells, and any other "alternative energy" as defined by the Commonwealth Energy Public Policy Office via future regulation. Renewable biomass, qualified hydroelectric, and MSW are further defined in the law. The different categories were created with the potential federal renewable energy standard in mind; the "sustainable renewable energy resources" would qualify under Puerto Rico's standard and also a potential, future federal standard; whereas the "alternative renewable energy" resources would only qualify for Puerto Rico's standard.
In July 2010, Puerto Rico enacted the island's first Renewable Energy Portfolio Standard in an effort to spur renewable energy development as well as reduce Puerto Rico's dependence on imported foreign oil (Puerto Rico relies heavily on oil to generate electricity. Approximately 70% of its electricity is produced this way).
- 2015 - 2019: 12%
- 2020 - 2027: 15%
- 2028 - 2034: Interim targets to be determined; PREPA is to develop a plan to ramp up from 15% to the ultimate goal of 20% during this time period.
- 2035: 20.0%
Renewable Energy Credits
PREPA must show compliance with the RPS through procurement of renewable energy credits (RECs).** One REC is equivalent to one megawatt-hour (MWh) of electricity derived from a green energy source. RECs may be banked starting in 2013 for the 2015 compliance year. RECs may be banked for two years in addition to vintage year, although the REC loses half its value if it is banked for use in year 2. Puerto Rico will be using the North American Renewables Registry (TM) for REC tracking.
The newly created Commonwealth Energy Public Policy Office will be responsible for overseeing RPS implementation. The Renewable Energy Commission in this office is to be made up of seven members and will have authority to promulgate rules, issue orders and clarify policies as needed.
Note: On May 27, 2014 Act 57 was passed and requires PREPA to create a RELIEF plan.
* The law applies to all retail electric providers of 50,000 MWh or more per year. However, PREPA is the only retail electric provider in Puerto Rico that currently meets that definition.
**PREPA may also report on the amount of renewable energy purchased through net metering or power purchase agreements to demonstrate partial compliance.