Photo of William M. Friedman

William M. Friedman focuses his practice on regulatory, legislative, compliance and transactional issues related to energy and commodities markets. While in law school, William was a notes editor for The George Washington International Law Review. He held internships at the Department of Justice and the Energy and Telecommunications Division of the Massachusetts Attorney General's Office. Read William Friedman's full bio.

On September 29, 2017, the Illinois Power Agency (IPA) released its Long-Term Renewable Resources Procurement Plan (Plan) to implement renewable energy goals set forth in Illinois’s Future Energy Jobs Act, which went into effect on June 1. Together, the new legislation and the Plan, among other things, make significant modifications to Illinois’s renewable portfolio standard (RPS) goal of 25 percent of retail electricity sales sourced from renewable energy by 2025. The Plan sets forth procurement programs designed to meet the state’s annual RPS targets until 2030 and will be updated at least every two years. These changes significantly expand renewable energy development opportunities in Illinois—by some estimates, leading to the addition of approximately 1,300 megawatts (MW) of new wind and nearly 3,000 MW of new solar capacity by 2030.

Expanding the Illinois RPS

While maintaining the same 25 percent renewable energy sourcing goal, the Future Energy Jobs Act functionally increases the state’s RPS target because Illinois’s RPS standard previously applied only to customers buying power through a utility’s default service, not customers taking supply through alternative retail suppliers or through hourly pricing. According to the IPA, in recent years, only 30-50 percent of potentially eligible retail customer load actually received default supply services, while competitive class customers (including larger commercial and industrial customers, which represent approximately half of total load) had no default supply option. Given this transition, meeting Illinois’s RPS goal of 13 percent of retail electric sales in the state sourced from renewable energy for the 2017–2018 delivery year will require the IPA to procure on behalf of the state’s electric utilities an additional 7.5 million renewable energy credits (RECs), which will gradually increase to a forecasted procurement of 31.5 million RECs for the 2030–2031 delivery year. One REC represents 1 megawatt hour (MWh) of generation produced by an “eligible renewable resource.” Eligible resources include wind, solar, thermal energy, biodiesel, anaerobic digestion, biomass, tree waste, landfill gas and some hydropower. Many other states, including California and Massachusetts, utilize RECs to demonstrate compliance with the state’s RPS program. Continue Reading Illinois Renewable Resources Procurement Plan Aims to Boost Renewable Energy Development

Last week the Commodity Futures Trading Commission (CFTC) issued a notice of proposed order and request for comment proposing to allow a private right of action to enforce violations of the anti-manipulation, anti-fraud or scienter based provisions (Anti-fraud provisions) of the Commodity Exchange Act (CEA) in organized electricity markets.  The proposal is a controversial reversal of policy that critics say could open electricity market participants to increased costs and liability. Continue Reading CFTC Proposes Reversing Course, Granting Private Right of Action in Energy Market Manipulation

The Massachusetts Department of Energy Resources (DOER) earlier this year released its proposal for the Commonwealth’s next solar energy incentive program, the Solar Carve-Out II program (SREC II).  The program will increase to 1600 MW the amount of solar generation in Massachusetts qualified to produce solar renewable energy certificates (SRECs), well above the 400 MW cap set by the existing and now-over-subscribed first Solar Carve-Out program.  DOER is hosting a public hearing on the proposed regulations and is accepting written comments until January 29.

The SREC II proposal includes many of the same mechanics as DOER’s first Solar Carve-Out program.  Qualified renewable generation units will produce SRECs for 40 calendar quarters that may be sold or deposited into an auction account for bidding.  The auction price, which sets a price floor, will initially be fixed at $300 per SREC, the same auction price that currently exists under the first Solar Carve-Out program.  The SREC II auction price will decrease in subsequent years beginning in 2017.

One new aspect of SREC II is the segmentation of generation units into four market sectors, with each sector receiving its own SREC Factor (which determines the number of SRECs per MWh of electricity generated by a generation unit):

  • Market Sector A: any Generation Unit with a capacity less than or equal to 25kW, Solar Parking Canopy Generation Units, Emergency Power Generation Units or Community Shared Solar Generation Units.  Proposed SREC Factor:  1.0
  • Market Sector B: any Building Mounted Generation Unit, or ground mounted Generation Units with a capacity of greater than 25 kW for which 67 percent or more of its annual electric output is used on-site.  Proposed SREC Factor: 0.9
  • Market Sector C: any Generation Unit with 50 percent or more of the equipment used for generating power installed at an Eligible Landfill or Brownfield and any Generation Unit with a nameplate capacity less than or equal to 500 kW for which less than 67 percent of annual electrical output is used on-site.  Proposed SREC Factor: 0.8
  • Managed Growth Sector: any units that do not meet the requirements for the other market sectors.  Proposed SREC Factor: 0.7

The SREC Factor is designed to create an incentive to develop smaller solar generation units and a greater variety of generation units.  DOER plans to review SREC Factors in early 2016 with any changes applying to generation units qualified on or after January 1, 2017.

The Managed Growth Sector is subject to an annual capacity cap.  Each year, DOER will prescribe an annual capacity block to be filled by qualified generation units in the Managed Growth Sector.  DOER’s proposed annual capacity block for 2014 is 26 MW, and for 2015 the capacity block is 80 MW.  DOER will announce the annual capacity blocks two years in advance for future years.