2018 MA RPS/APS/CES Compliance Filing Webinar

1. COMMONWEALTH OF MASSACHUSETTS Charles D. Baker, Governor Karyn E. Polito, Lt. Governor Kathleen A. Theoharides, Secretary Judith Judson, DOER Commissioner Martin Suuberg, MassDEP Commissioner 2018 MA RPS/APS/CES Compliance Filing WebinarMay 29, 2019John Wassam, RPS/APS Program Manager (DOER)Kaitlin Kelly, Manager of Solar Programs (DOER)Mike Judge, Director, Renewable and Alternative Energy Development (DOER)Jordan Garfinkle, Environmental Analyst (DEP)Sue Ann Richardson, Environmental Analyst (DEP) RPS, APS, CESCompliance Webinar May 29 , 2019

2. 2018 Compliance Filing Process • 2016 and 2017 banked totals provided on April 16th • Retail Load Obligation provided on May 15th • Compliance Workbook posted and dated on May 24th • End of 2018 trading year is midnight, June 15th! • ACPs for RPS and APS must be submitted to the MassCEC by Wednesday, June 26th • ACPs for CES must be submitted to the MassDEP within 30 days of separate billing by MassDEP • Compliance filing due no later than Monday, July 1st • Filers must provide both electronic and hard copies of filing. Electronic copies must be submitted to: doer.rps@mass.gov

3. What’s New? • First year of compliance for the Clean Energy Standard (CES) overseen by MassDEP • Overall compliance of 16%. Class I compliance of 13% counts towards overall compliance. Incremental compliance of 3% • No banking allowed first year • Different ACP payment process • Inclusion of GHG report (Tab 14. “GHG”) • Ability to provide full year of “My Certificates Disposition” in GIS. Please check “Settled” certificates only!

4. Bifurcation for Solar Carve-OutMinimum Standard (%) • Applies to all suppliers (EDCs and Competitive Retail) • For contracts executed or extended on or before 6/28/13: • Minimum Standard of 1.1411% • For contracts executed or extended after 6/28/13: • Minimum Standard of 1.7903%

5. Trifurcation of Solar Carve-Out IIMinimum Standard (%) • First exemption applies only to competitive suppliers (not EDCs) • For contracts executed or extended on or before 4/25/2014: • This exempt load has a Minimum Standard of 0% • For contracts executed or extended after 4/25/2014, but on or before 5/8/2016: • This exempt load has a Minimum Standard of 2.6823% • For contracts executed or extended after 5/8/2016: • Minimum Standard of 4.0683%

6. Solar Carve Out Practices • Auction [Re-minted] SRECs • 2016 Auction SRECs must be used for 2018 compliance • 2017 Auction SRECs may be used for 2018 and/or 2019 compliance • Auction [Re-minted] SREC IIs • 2016 Auction SRECs IIs must be used for 2018 compliance • 2017 Auction SREC IIs can be used for 2018 and/or 2019 compliance • All Auction SRECs for use in 2019 should remain in your main GIS account or your Banked account, notin your state-specific subaccount • For the Compliance Workbook, do not list Auction Re-minted SRECs or SREC IIs in the Banked columns!

7. Banked Certificates • Banking limits are expressed as a percentage of a Supplier’s 2018 compliance obligation • Banked certificates can be used in either of the two subsequent compliance years • Banking limits are as follows for specific classes: RPS Class I 30% SREC I and SREC II 10% RPS Class II Renewable 30% RPS Class II Waste-to-Energy 5% APS 30% CES NO BANKING ALLOWED IN 2018

8. Settled Certificates • Please be sure to settle all certificates in MA subaccounts in GIS by June 15th • Including any re-minted certificates that are to be applied to your obligation • Including any certificates that are intended to be “Banked” • Unsettled and other “Errant” certificates create accounting issues, require additional documentation from Suppliers, and make it difficult for DOER to reconcile numbers.

9. ACP Payments (for RPS/APS) • ACP Payments should be made to the Massachusetts Clean Energy Center (MassCEC) by Wednesday, June 26th • ACP wire instructions will be sent separately by encrypted email. • The ACP Notification is the last tab of the Workbook: tab N • You must itemize your payments according to the different types of ACPs: • Class I (RECs) • Class I Solar Carve-Out (SRECs); Class I Solar Carve-Out II (SREC IIs) • Class II Renewable Energy (Class II RECs) • Class II Waste-to-Energy (WECs) • Alternative Portfolio Standard (AECs) • The MassCEC will provide an ACP Receipt that will identify ACP Credits (MWh) and Payments ($) for each type of ACP that you remit • ACP Receipts must be included as part of your emailed filing only • If you have not received ACP Receipt by July 1ST, you should not delay email submission of your Compliance Filing on time. • ACP payments for CES will follow a different process.

10. Clean Energy Standard (MassDEP) • 2018 = first year with CES obligation (16%; 3% above RPS Class I) • RPS Class I obligation counts towards CES • All 2018 CES certificates (CECs) are also RPS Class I RECs • Exemptions for eligible existing contracts: • Must submit to MassDEP “Exemptions for Existing Contracts” form, available on the MassDEP CES web page • In order to be eligible, retail sellers must have also submitted required information by 12/31/2017 (projected volume of eligible MWhs) • CES ACP funds must be paid separately from the RPS ACP funds • Upon receiving the compliance workbooks on July 1, MassDEP will send invoices to all retail sellers who require Alternative Compliance Credits • Table 13b calculates total CES ACP owed to MassDEP • Payment must be made in full within 30 days of receiving the invoice

11. GHG Reporting (MassDEP) • 2018 = first year of GHG Reporting under 310 CMR 7.75 • The ‘AQ31 Optional Report’ previously submitted under 310 CMR 7.71 is now a mandatory report under 310 CMR 7.75 for utilities and competitive suppliers. This report is satisfied by the submission of Tab 14. GHG in the Workbook and of the NEPOOL-GIS “My Certificates Disposition” using “Settled” certificates report (as provided with submission of RPS/APS/CES Workbook filing). • The ‘AQ32 Mandatory Report’ must still be submitted by all retail sellers but now has a due date of the 15th of the second September following each year (2018 report will be due by 9/15/2020). • The Workbook: Tab 14. GHG will show MWh and CO2e that need to be entered on the AQ32 spreadsheet due 9/15/2020.

12. 2019 SREC Auction(s) • The 2019 SREC Auction will be held before the end of July • DOER does not expect to have significant auction volume in SREC I or SREC II • All deposits into the auction account must be made by June 15th • Bidders will need to register by submitting a qualification form to DOER’s auction agent • The auction represents an opportunity for suppliers to manage their future compliance costs

13. Related Programs • Clean Peak Standard • Minimum Standard of 0% in 2019. • Program still being developed • 83C Procurement • First phase awarded (400 MW) and contracts approved. • Expected to add Class I RECs by late 2021 • Second phase to be completed by 2022 (400 MW) • RFP issued for second solicitation (800 MW) • 83D Procurement • 83D awarded. Awaiting DPU approval of contracts. • Expected to add Clean Energy Credits (CECs) by 2023 through EDCs

14. Contacts • RPS/APS email contact: CES email contact: doer.rps@mass.govclimate.strategies@mass.gov • RPS, APS and overall questions: John Wassam doer.rps@mass.gov 617.626.7376 • For SREC, SREC II and SREC Auction questions: Kaitlin Kelly kaitlin.kelly@mass.gov 617.626.7343 • For CES questions: Jordan Garfinkle jordan.garfinkle@mass.gov 617.292.5904 • For GHG reporting: Sue Ann Richardson sue.ann.richardson@mass.gov 617.348.4098