• Background
• Pilot Customer Choice Programs
• Price-to-Compare Information
• Status of Retail Competition
• Divestiture of PEPCO’s Plants
• Electric Rate Reductions and Rate Caps
• Divestiture Sharing Credits
• Generation Procurement Credits
• Retail Electric Restructuring Legislation and Working Group
• Electric Rate Unbundling
• Licensing Requirements for Alternative Electricity Suppliers
• Current List of Certificated Alternative Electricity Suppliers/Aggregators/Brokers
• Public Purpose Programs
• Supplier Coordination Tariff
• Customer Aggregation Program
• Municipal Aggregation Program
• PEPCO/Conectiv Merger
• Fuel Mix and Emission Disclosure
• Net Metering
• Market Monitoring
• New Electric Generation and Transmission Construction Rules
• Standard Offer Service (SOS) after price caps end on February 7, 2005
• Renewable Energy Portfolio Standard
• Other Current Topics Under Commission Consideration
• Contact for Further Questions

Electric Restructuring — Formal Case No. 945, Chronology of Events

Background

Per Order No. 10720, the District of Columbia Public Service Commission initiated Formal Case No. 945 in 1995 to investigate whether opening the retail electricity market to competition would be in the public interest.

Pilot Customer Choice Programs

Per Order Nos. 11576 (issued December 31, 1999) and 11796 (issued September 18, 2000), effective January 1, 2001, all residential and commercial electricity customers in the District of Columbia have been able to choose an alternative electricity generation and transmission supplier, while PEPCO continues to be the sole distribution company. PEPCO also continues to be responsible for all emergencies. In the new era, PEPCO's services are split into two components -- production (generation) and transmission on the one hand and delivery (distribution) on the other -- with the generation and transmission portions open to competition. While consumers are able to select their electric generation and transmission supplier, PEPCO is still the sole deliverer of power to homes and businesses. The generation and transmission suppliers include PEPCO and other certified suppliers who meet technical and operational standards set by the Commission. Meanwhile, the Commission continues to oversee electric service in D.C. and assure reliability and quality of service to all customers.

Consumers who do not choose an alternative electricity supplier for generation and transmission service continue to receive such service from PEPCO. To decide whether to select a generation and transmission supplier, consumers should take the time to carefully address the following questions:

(1) What prices, terms and conditions are offered by the suppliers?
(2) Do the suppliers use renewable energy sources?
(3) What are the billing and payment options offered by the new suppliers?

The Commission has devised Energy Savings tables and a calculator to assist residential and small commercial consumers in deciding whether to switch their generation and transmission services from PEPCO to another company.

As the new competitive marketplace evolves, the Commission continues to play an active role in ensuring that customers and the environment are protected. The Commission oversees the transition to competition and continues to regulate service provided by the utility, ensuring the electric generation and transmission suppliers meet the Commission's requirements for serving D.C. customers and working with other relevant agencies to carry out outreach and education programs to help consumers make informed choices.

Price-to-Compare Information

On September 19, 2001, the Commission issued Order No. 12186 which identified the price-to-compare information to be posted on the Commission's website. In this order, the Commission adopted tables, which calculate the impact of switching to alternative electric suppliers for their generation and transmission service. OPC, industry participants, and suppliers, as appropriate, are encouraged to establish hyperlinks to the price-to-compare information on the Commission's website. Rates and other information provided by suppliers for inclusion and subsequent posting on www.dcpsc.org should be forwarded to the Commission within three days of the stated posting date to ensure the accuracy of the posted information.

Status of Retail Competition

As of July 2009, four alternative generation and transmission suppliers, Gexa Energy, Pepco Energy Services (PES), Washington Gas Energy Services (WGES), and Horizon Power and Light are serving the District’s residential sector. Fifteen (15) alternative generation and transmission suppliers are serving non-residential customers. They are: PES, WGES, BlueStar Energy Services, Constellation NewEnergy, Hess, Consolidated Edison Solutions, Sempra Energy Solutions, Suez Energy Resources, Horizon Power and Light, Liberty Power, Direct Energy, Integrys Energy Services, Gexa Energy, Glacial Energy, and MidAmerican Energy. As of the same date, alternative suppliers accounted for 2.7 percent of residential customers and 24.1 percent of non-residential customers. As another measure, 3.2 percent of residential MW demand and 82.2 percent of non-residential MW demand was supplied by the alternative generation and transmission suppliers. These same suppliers accounted for 1.3 percent of residential usage (MWH) and 76.3 percent of non-residential usage. Month-by-month changes can be found on the Commission’s website under Customer Information/Electric Choice/Status of Electric Retail Competition.

Divestiture of PEPCO's Plants

In 1999, PEPCO filed an application with the Commission, requesting authority to sell its generating plants and purchased power agreements. On December 30, 1999, the Commission issued Order No. 11576, which accepted, with conditions, a non-unanimous settlement agreement authorizing PEPCO to sell most of its generation assets (all seven plants except two plants located in D.C.)

As of January 8, 2001, PEPCO completed the sale of its generation plants. On December 19, 2000, PEPCO completed the closing on the sale of the bulk of its electric power plants and other generation assets to Mirant Corporation for $2.75 billion. PEPCO also transferred ownership of its two District of Columbia plants (Benning and Buzzard Point) to a new unregulated subsidiary, Potomac Power Resources, Inc., and these two plants are operated by Mirant. In December 2000, PEPCO also signed a four-year contract with Mirant Corporation to buy back the power its customers need at prices below PEPCO's current average cost of production. Finally, on January 8, 2001, PEPCO completed the sale of its 9.7 percent interest in the Conemaugh Generation Station near Johnstown, Pa. to Allegheny Energy, Inc. and PPL Corporation for $156 million.

Divestiture of PEPCO's generation plants has also enabled PEPCO's customers to not have to pay any stranded costs (costs which are not economical in the new competitive environment). This certainly reduces customers' rate burdens.

Electric Rate Reductions and Rate Caps

Order No. 11576, issued December 30, 1999, also authorized a 7 percent reduction in PEPCO’s rates for residential customers and a 6.5 percent reduction in rates for commercial customers, to be implemented in three phases.

The first rate reduction was effective January 1, 2000 and reflected the elimination of the Demand-Side Management surcharge. This represented a 2 percent rate reduction for residential customers and a 3.5 percent rate reduction for commercial customers. The second rate reduction was effective on July 1, 2000, and it reflected a 1.5 percent across- the- board base rate reduction for both residential and commercial customers. The third rate reduction took effect on February 8, 2001. Residential ratepayers received another 3.5 percent rate reduction and commercial ratepayers received another 1.5 percent reduction.

The Commission's December 1999 order also capped total rates after all of the rate reductions were to be implemented. The caps were to be effective until February 7, 2007 for low-income Residential Aid Discount (RAD) customers; for all other residential and commercial customers, rates were capped for four years (until February 7, 2005).

Based on the Commission’s Order in the PEPCO/Conectiv Merger case (F.C. No. 1002), PEPCO’s distribution rates will be capped at the February 7, 2005 levels for 30 months from February 8, 2005 through August 7, 2007 for non-RAD customers and through August 31, 2009 for RAD customers. On February 8, 2005, the generation and transmission rate cap for non-RAD customers were lifted. New Standard Offer Service rates were implemented starting February 8, 2005. The cap on the generation rates for RAD customers will be lifted on February 8, 2007. After receiving comments, on December 13, 2006, the Commission issued Order No. 14139, which established the new RAD generation rates effective February 8, 2007.

Divestiture Sharing Credits

On September 19, 2001, in Order No. 12159, and on October 10, 2001, in Order No. 12203, the Commission ordered PEPCO to distribute divestiture sharing credits to customers. Residential customers received $75.39 per household and commercial customers received 0.393 cents per kWh for the annual usage ending March 31, 2001. The total credits distributed to customers amounted to $51.85 million.

The Commission has initiated a second phase of this proceeding to determine whether additional divestiture proceeds exist and should be shared with ratepayers. A "Phase II" hearing was held on June 26th and 27th, 2002.

On November 7, 2002, in Order No. 12593, the Commission approved the distribution of an additional $24 million in divestiture sharing credits to residential and business ratepayers. Thus, as of December 18, 2002, the total amount of divestiture sharing credits approved by the Commission amounts to $75.85 million, and each household will have received a total of $80.42 of divestiture sharing credits by the end of the year.

On November 20, 2008, PEPCO filed proposed updates to Riders "DS-R" Divestiture Sharing Credit Residential and "DS-NR" Divestiture Sharing Credit Non-Residential, which would share the remaining amounts from the Mirant Settlement related to the Panda Purchased Power Agreement with District of Columbia customers. According to PEPCO's proposal, residential customers would receive bill credits totaling $4.4 million and non-residential customers would receive $20.3 million. Residential households, on average, will receive a $17 credit, if approved. The Commission issued a Notice of Proposed Rulemaking (NOPR) requesting comments on PEPCO's filing in December 2008. No comments were received. A NOFR approving the credits was issued on March 13, 2009.

Generation Procurement Credits

During the four-year rate cap period from 2001 to 2004, if the costs of acquiring power for Standard Offer Service (SOS) customers are less than the unbundled generation rates, the savings will be shared by PEPCO’s customers and its shareholders through a Generation Procurement Credit (GPC) on a cents per kWh basis. The GPC is calculated by taking the difference between the contract payment to Mirant and the SOS generation revenue (the unbundled generation component for PEPCO). On August 2, 2002, the Commission issued Order No. 12452, which approved PEPCO’s proposed GPC rider, consisting of bill credits totaling $41.6 million. PEPCO began distributing the GPC to customers on August 15, 2002. On May 20, 2003, the Commission issued Order No. 12738, which approved PEPCO’s proposed GPC for the second application period. This application consists of bill credits totaling $20 million. On September 13, 2004, the Commission issued Order No. 13378 approving PEPCO’s proposed Generation Procurement Credit Rider filed on April 28, 2004. The approved Rider GPC became effective with the billing month of October 2004, and will provide bill credits totaling $11 million to the District’s commercial customers. The net GPC credit for residential customers was determined to be zero, since the residential class’s guaranteed rate reduction exceeded its share of PEPCO’s net generation procurement margins.

On October 24, 2005, the Commission issued Order No. 13794, which approved PEPCO’s proposed Generation Procurement Credit Rider filed on July 12, 2005. The approved GPC rider became effective with bills rendered on and after November 14, 2005, and will provide bill credits totaling $150,642 to the District’s commercial customers or $0.00002 per kWh. The net GPC credit for residential customers was determined to be zero, since the residential class’s guaranteed rate reduction exceeded its share of PEPCO’s net generation procurement margins over the period. PEPCO made a new GPC filing on February 27, 2006 and amended that filing on March 22, 2006. On June 15, 2006, the Commission issued Order No. 13968, which granted conditional approval of PEPCO’s application and will provide ratepayers with an immediate credit of $24.3 million. PEPCO made a compliance filing on June 28, 2006. Based on the compliance filing, the applicable residential GPC is $0.000358 per kWh and the non-residential GPC is $0.002447 per kWh, starting with the July 2006 billing month. To date, the Commission has authorized distribution of $97 million ratepayer credits. In Order No. 14143, issued December 15, 2006, the Commission required PEPCO to address additional questions on the GPC. PEPCO filed a response on January 17, 2007. On May 24, 2007, the Commission issued Order No. 14304 which concluded that all the questions concerning PEPCO’s March 22, 2006 GPC filing have been answered satisfactorily; thus, the Commission approved PEPCO’s amended GPC Rider without condition.

On April 25, 2008, PEPCO filed a proposed update to its Generation Procurement Credit Rider “GPC”. PEPCO’s filing sought to provide a final GPC “true-up” for the period covering November 2005 through February 2008. Only non-residential customers would receive a GPC credit under PEPCO’s filing. On September 18, 2008, PEPCO filed an update to correct its proposed non-residential GPC credit from $0.000068 to $0.000056 per kWh, in order to return $528,431 to non-residential customers. On November 21, 2008, the Commission published a Notice of Proposed Rulemaking (NOPR) in the D.C. Register requesting comments on PEPCO's corrected GPC filing. No comments were filed. A Notice of Final Rulemaking approving PEPCO's updated credit was published on March 6, 2009.

Retail Electric Restructuring Legislation and Working Group

At the same time that the Commission was adjudicating the divestiture of PEPCO's plants, the D.C. Council adopted new legislation entitled, "The Retail Electric Competition and Consumer Protection Act of 1999." The Commission devoted much of 2000 to implementing this law. More specifically, the Commission directed the parties to form a Retail Choice Working Group and 7 sub-working groups to address many electric restructuring issues, such as: (1) customer protection; (2) customer education; (3) billing and metering; (4) supplier licensing/procedures; (5) codes of conduct; (6) technical implementation; and (7) universal service.

The Working Group filed a Report with its recommendations to the Commission on May 23, 2000. Subsequently, comments and reply comments were filed on consensus issues and non-consensus issues. The Commission held a legislative hearing on June 30, 2000, to discuss these issues. The Commission's decision on the Working Group Report was issued on September 18, 2000 in Order No. 11796.

The Retail Choice Act gave the Commission until January 1, 2004 to achieve 100 percent retail electricity choice for all customer classes. However, based on December, 1999 and September 18, 2000 Orders, the Commission approved the implementation of retail choice programs for both residential and commercial customers by January 1, 2001. The September 18, 2000 Order No. 11796 also established a detailed implementation plan for retail choice and set up the guidelines, procedures and standards for consumer protection, certification of suppliers, and Electronic Data Interchange (EDI).

Electric Rate Unbundling

To facilitate retail choice and ensure non-discriminatory service, retail rates had to be unbundled by separating them into generation, transmission, and distribution functions. Unbundling enables customers to compare generation and transmission prices among alternative suppliers. The Commission issued its unbundled rates order (Order No. 11845) on December 5, 2000 and determined "shopping credits" or "price to compare".

Licensing Requirements for Alternative Electricity Suppliers

On September 18, 2000, in Order No. 11796, the Commission adopted interim regulations governing licensing requirements for alternative generation and transmission suppliers. On December 18, 2000, the Commission issued Order No. 11862, which specified additional deposit and bonding standards for certifying suppliers. The Commission established the same deposit caps for small commercial and residential customers. Any electricity supplier applicant that intends to, or that actually does, accept deposits and/or prepayments from customers must provide a Customer Payments Bond in an initial amount of $50,000. That amount shall be periodically adjusted to ensure that it covers the actual amount of deposits and/or prepayments.

Current List of Certificated Alternative Electricity Suppliers/Aggregators/Brokers

As of September 2, 2009, the Commission has certificated thirty-eight (38) alternative generation and transmission suppliers/aggregators/brokers as follows:

1. Constellation NewEnergy, Inc.,
   
2. Allegheny Energy Supply Company, LLC,
   
3. AOBA Alliance Inc.,
   
4. BGE HOME,
   
5. Reliant Energy Solutions East, LLC,
   
6. Dominion Retail Inc.,
   
7. FirstEnergy Services Corp.,
   
8. Mid-Atlantic Aggregation Group Indep. Consortium,
   
9. PEPCO Energy Services, Inc., d/b/a PEPCO Energy Services,
   
10. SmartEnergy,
    
11. Washington Energy Consortium,
    
12. Washington Gas Energy Services, Inc.
    
13. Cook Inlet Power, LP.
    
14. Sempra Energy Solutions
    
15. Select Energy
    
16. Con Edison Solutions
    
17. Strategic Energy
    
18. EnergyWindow
    
19. Amerada Hess
    
20. Liberty Power
    
21. SUEZ Energy Resources NA, Inc.
    
22. BlueStar Energy Services, Inc.
    
23. Direct Energy Services
    
24. South Jersey Energy
    
25. American PowerNet.
    
26. Horizon Power and Light, LLC.
    
27. World Energy Solutions, Inc.
    
28. Gexa Energy District of Columbia, LLC.
    
29. Integrys Energy Services, Inc.
    
30. Glacial Energy of Washington D.C., Inc.
    
31. Ohms Energy Company, LLC
    
32. LPB Energy Consulting
    
33. MidAmerican Energy Company
    
34. Clean Currents, LLC
    
35. Electric Advisors Inc.
    
36. NUS Consulting Group
    
37. UGI Energy Services/Gasmark
    
38. Energy Advisory Service

The Commission will continue certifying suppliers based on the supplier certification standards established in the September 18, 2000 and the December 18, 2000 orders.

Public Purpose Programs

On December 29, 2000, the Commission issued Order No. 11876, which established a Public Benefit Fund - Reliable Energy Trust Fund (RETF) - to cover Commission-authorized universal service (low-income), energy efficiency, and renewable resources programs. Renewable resources include solar, wind, geothermal and hydroelectric facilities etc. Using these resources to produce electricity will achieve a clean environment objective.

In July 2003, the Commission authorized the D.C. Energy Office to be the Reliable Energy Trust Fund Administrator and the Commission approved the first renewable resource program – the Renewable Electricity Generation Demonstration Program for D.C.

The Commission has approved three RETF programs which are currently being implemented: (a) expansion of a low-income discount program; (b) a low-income weatherization program; and (c) a renewable resource demonstration program.

On July 8, 2004, the Commission held a status conference regarding RETF programs. In this conference, parties offered additional comments regarding DCEO's proposed long-term program plan filed on August 21, 2003. In response to the Commission’s directives, DCEO submitted a revised RETF Plan on August 31, 2004. On March 7, 2005, the Commission issued Order No. 13475 that approved in part, and denied in part, DCEO’s revised RETF Plan, which it filed on August 31, 2004.

In Order No. 13475, the Commission carefully evaluated all of the evidence pertaining to DCEO’s revised RETF Plan, including available benefit/cost test results. In the order, the Commission approved thirteen (13) new programs on a two-year pilot basis. The Commission also determined that it was appropriate to continue funding the three (3) existing RETF programs. The newly approved programs address a number of RETF objectives, including: a) the promotion of renewable energy; b) increased energy efficiency awareness and public education; c) energy efficiency assistance to non-profit organizations, public schools and small businesses; d) increased use of Energy Star appliances by residential customers; e) new LIHEAP and arrearage assistance for low-income customers; and f) new appliance and weatherization programs for low-income customers. The Commission approved a total annual RETF program budget of approximately $9.5 million and $10.5 million, respectively, for the first and second years of the pilot. A detailed summary of the recently approved RETF programs and budgets is provided in Attachment A of Order No. 13475.

On August 11, 2005, the Commission held roundtable discussions with the parties regarding prospective new RETF programs. Participants from DCEO, OPC, PEPCO, EPA, American Council for an Energy Efficient Economy, Alliance to Save Energy, Energy Programs Consortium, and Coalition for Nonprofit Housing and Economic Development joined the discussions on RETF programs with the Commission. On November 1, 2005, the Commission issued Order No. 13796, which provided general guidance for the Working Group to develop future programs. The Working Group filed its report on new programs on March 8, 2006. Parties filed comments and reply comments in March 2006. The Commission issued Order No. 13953 on May 31, 2006 which rejected both the Working Group Report and the Working Group’s proposed RETF programs. In July, 2006 DCEO requested approval to be reimbursed from the RETF for its costs to perform the All Ratepayers Test (ART) to ensure its proposed programs are cost effective. On August 17, 2006, the Commission issued Order No. 14021 to invite comments. In November 2006, the Commission issued Order No. 14111, which authorized funding for the District’s Department of the Environment Energy Office (DDOE) to conduct cost-effectiveness tests for its proposed new energy efficiency programs. The Commission also invited the Working Group to convene and consider methods by which RETF program development and implementation might be improved in the future. On March 26, 2007, PEPCO submitted comments in response to Order No. 14111. On March 27, 2007, DDOE submitted comments in response to Order No. 14111. DDOE also submitted the ART results for the new programs proposed in March 2006, including revised program proposals. On April 13, 2007, OPC filed reply comments to PEPCO and DDOE.

On May 11, 2007, DDOE requested an extension of time to administer ten (10) of the thirteen (13) RETF pilot programs, approved in Order No. 13475, until such time as the impact evaluations of the programs have been conducted, filed, and reviewed by the Commission and interested stakeholders, and the Commission has issued an Order concerning the future of the RETF programs. DDOE requested an expedited ruling on this matter, given that the RETF programs are set to expire at the end of May. The ten programs included:

• B-5: Distributed Generation and Net Metering
• C-3: Non-Profit Energy Efficiency Initiative
• C-5: Home Energy Rating System ("HERS")
• C-10: Institutional Energy Efficiency
• C-12: Energy Star Appliance and Lighting Rebates
• C-13: Small Business Energy Efficiency
• D-1: Low Income Home Energy Assistance Program ("LIHEAP") Extension
• D-3: RAD Arrearage Retirement and Education
• D-5: Low Income Appliances
• D-6: Weatherization Rehabilitation

In Order No. 14321 (issued May 31, 2007), the Commission granted DDOE’s motion to temporarily extend the administration of the ten (10) programs until September 30, 2007. That Order also approved DDOE’s request for additional funds subject to certain modifications.

On June 20, 2007, DDOE filed its Motion for Extension of Time to Promote Programs C-1, C-2, C-4, C-6 and to Complete the Solar Home Project in Program C-4 (“Motion for Additional Extensions”). Notwithstanding its previous comments and conclusions in its May 11 motion for extending the administration of ten (10) RETF programs, DDOE’s Motion for Additional Extensions now requests the continuation of the awareness and marketing programs (i.e., C-1, C-2, C-4 and C-6) through September 30, 2007. In addition, DDOE specifically requested that the Commission permit the C-4 Solar Home Project to be completed. The Commission granted DDOE’s motion in Order No. 14377, issued July 19, 2007, and temporarily extended DDOE’s authority to administer the C-1/C-2, C-4, and C-6 programs until September 30, 2007.

Also, on June 20, 2007, in Order No. 14341, the Commission directed DDOE and PEPCO to implement the RAD Arrearages Retirement and Education Program (D-3) and to follow DDOE’s enrollment process. DDOE was authorized to continue this program through September 30, 2007.

On July 26, 2007, the Commission issued Order No. 14394, which approved the budgets for programs C-5, C-13, D-5, and D-6. The budgets were approved from the date of the Order to September 30, 2007. The Commission previously extended DDOE's authority to administer these programs in Order No. 14321.However, Order No. 14321 also directed DDOE to file revised budgets for D-5 and D-6, and to review and possibly revise the C-5 and C-13 budgets. DDOE filed revised budgets for these programs on June 12, 2007. The Commission subsequently issued Order No. 14359, on July 6, 2007, which directed DDOE to answer questions regarding the revised program budgets. DDOE submitted its response to Order No. 14359 on July 11, 2007.

On August 21, 2007, in Order No. 14547, the Commission approved two new RETF programs-the Affordable Housing Energy Efficient Rebate Program and the Weatherization Rehabilitation and Asset Preservation Program. DDOE's authorization to administer the programs began as of the date of the Order and extends to August 21, 2009, subject to further review.

On August 29, 2007, DDOE filed a motion stating that it required additional funds for the C-12 program. By Order No. 14576, issued September 20, 2007, the Commission granted DDOE's Motion to Increase the Budget for the C-12 Program on an expedited basis.

On September 28, 2007, the Commission issued Order No. 14582 and temporarily extended DDOE's authority to administer the B-4, B-5, C-1/C-2, C-3, C-4, C-5, C-12, C-13, D-1, D-2, D-3, D-4, D-5, and D-6 programs. Programs D-1, D-2, and D-3 were extended until March 31, 2008, while the remaining programs were extended until December 31, 2007. Since no extension was requested for programs C-6 and C-10, those programs ended as of September 30, 2007.

On December 3, 2007, DDOE filed another motion, requesting an extension of eleven (11) RETF programs: including B-4, B-5, C-3, C-5, C-13, D-1, D-2, D-3, D-4, D-5, and D-6. An extension for programs C-1/C-2, C-4, and C-12 was not requested because, according to DDOE's impact evaluation report (submitted on October 15, 2007), these programs were found to be ineffective. On December 27, 2007, the Commission issued Order No. 14689 and granted DDOE's Motion for Extension of Eleven RETF Programs until September 30, 2008.

In Order No. 14776, issued April 2, 2008, the Commission directed DDOE to respond to certain queries and file revised budgets, as necessary, for the following proposed programs: New Commercial Building Construction Energy Efficiency, Existing Commercial Building Energy Efficiency, Government Building Energy Efficiency, and Condominium and Cooperative Building Energy Efficiency. DDOE filed its response in a timely manner on April 17, 2008.

While this proceeding was pending before the Commission, the Council of the District of Columbia had been considering Bill 17-492—the “Clean and Affordable Energy Act of 2008”—which, among other things, would create a Sustainable Energy Utility responsible for administering renewable energy and energy efficiency programs. In Order No. 14843, issued June 27, 2008, the Commission determined that the proposed legislation addressed specific program budgets, and in order to ensure that Commission-approved programs are funded, the Commission believed that it would be imprudent to act upon any new programs. As a result, the Commission suspended consideration of DDOE’s four remaining energy efficiency programs until the conclusion of the legislative process with respect to Bill 17-492.

On October 22, 2008, the permanent version "Clean and Affordable Energy Act of 2008" (CAEA) became effective. The CAEA, among other things, required the establishment of a Sustainable Energy Utility (SEU) and discontinued the Reliable Energy Trust Fund. Under the administration of DDOE, the SEU will provide energy efficiency programs in the District.

Pursuant to the CAEA, in Order No. 15139 (issued December 18, 2008), the Commission provisionally approved five demand-side management programs proposed by PEPCO in its "Blueprint for the Future." The five programs are: (1) Residential Lighting and Appliances; (2) Non-residential Prescriptive Rebate; (3) Non-residential Custom Incentive; (4) Non-residential HVAC Efficiency; and (5) Non-residential Building Commissioning. The Commission directed PEPCO to submit additional information. PEPCO filed additional information on February 23, 2009.

On January 21, 2009, as part of Order No. 15164, the Commission closed the portion of Formal Case No. 945 that dealt with the Reliable Energy Trust Fund programs, pursuant to the CAEA.

The CAEA also required the Commission to issue an Order regarding certain demand-side management programs proposed by PEPCO. The programs that the Commission approved would be funded by the Sustainable Energy Trust Fund ("SETF") for up to $6 million dollars annually for fiscal years 2009 through 2011. The Commission conditionally approved five of PEPCO's energy efficiency programs in Order No. 15139 (issued December 18, 2008): Residential Lighting & Appliances (R-L&A); Non-Residential Prescriptive Rebate (NR-PR); Non-Residential Custom Incentive (NR-CI); Non-Residential HVAC Efficiency (NR-HVAC); and Non-Residential Building Commissioning (NR-BC). PEPCO was directed to provide a workplan for each approved program, a three-year spending plan with a maximum cap of $6 million in each fiscal year (October 1 to September 30), and a detailed revised budget for FY 2009. The Company was also instructed to provide detailed budgets for FY 2010 and FY 2011 by August 1, 2009 and August 1, 2010, respectively. PEPCO submitted its response to Order No. 15139 on February 23, 2009. Subsequently, in Order No. 15219 (issued March 12, 2009), the Commission approved the revised FY 2009, FY 2010, and FY 2011 program budgets, three-year spending plans and workplans for the five programs. PEPCO was also directed to file individual program workplans that include a timeline with milestones as part of its first quarterly report. In addition, PEPCO was reminded to provide detailed budgets for FY 2010 and FY 2011. On March 27, 2009, the Commission issued Order No. 15228, directing PEPCO to include the information contained in an attached Quarterly Reporting Requirement Guidelines ("Reporting Guidelines") in future quarterly reports, beginning with the first report due on July 30, 2009. PEPCO filed its first quarterly report on August 3, 2009.

Supplier Coordination Tariff

On February 1, 2001, in Order No. 11902, the Commission approved a supplier coordination tariff. The tariff specifies the registration and account maintenance fees suppliers need to provide to PEPCO for communication and EDI transactions.

Customer Aggregation Program

On February 8, 2001, the Commission approved interim regulations governing customer aggregation programs in Order No. 11913. In this order, the Commission specified that "An Aggregator or Broker must obtain an Electricity Supplier license from the Commission pursuant to the Interim Application for License to Supply Electricity or Electric Generation Service to the Public in the District of Columbia and Order No. 11862 issued on December 18, 2000 in order to contract with retail customers as an Aggregator or Broker in D.C." The Commission will issue a Notice of Proposed Rulemaking (NOPR) to the public, inviting comment on whether the interim standards should be ultimately adopted as final regulations.

Municipal Aggregation Program

The 1999 Act permits the Mayor to develop and administer a Municipal Aggregation Program (MAP). The Act requires the Mayor, in conjunction with the District of Columbia Public Service Commission, to issue regulations governing a MAP.

In February 2001, on behalf of the Mayor, the District of Columbia Energy Office (DCEO) established the District of Columbia Municipal Aggregation Task Force to explore the creation of a municipal aggregation program. The Task Force includes entities such as Office of the City Administrator, DCEO, the Water and Sewer Authority (WASA), Office of the People's Counsel (OPC), the Commission, and a few other D.C. government agencies.

On October 24, 2001, the Committee on Consumer and Regulatory Affairs of the Council of the District of Columbia ("Committee") invited the members of DC-MAP and other interested parties to participate in a public hearing to discuss MAP-related issues. At the hearing, DCEO and OPC explained that it was important for the Committee to consider amending the current legislation to include an Opt-out provision for residential customers. At the request of the Council, on November 30, 2001, the Commission held a legislative-style hearing to discuss the District's proposed municipal aggregation program and MAP's method of customer selection (i.e., Opt-out vs. Opt-in).

In the Commission’s budget hearing before the Council on March 28, 2002, Chairman Cartagena testified that the Commission continues to be concerned about the adoption of a municipal aggregation program with an opt-out provision for several reasons. First, the creation of such a program may have the effect of causing confusion for consumers who might not know why they have been switched to another electricity supplier without their permission. Second, the Commission continues to be apprehensive about the potentially stifling effect a municipal aggregation program with the opt-out provision may have on competition. Third, the development of such a program may create a disincentive for any companies that might consider bidding for the Standard Offer Service provider role that begins January 1, 2005 under the 1999 Act. Chairman also indicated that despite these reservations, however, the Commission is eager to continue its work with the Office of the Mayor, the District Council, and the Municipal Aggregation Working Group, as these parties work to create and implement a viable municipal aggregation program in the District.

On May 6, 2002, the Commission issued an Order and Report, Order No. 12399. In this Report, the Commission recommended the following:

• Allowing any MAP to be implemented as originally envisioned by the Electric Competition Act, i.e., on an opt-in basis;
• Refocusing efforts to develop municipal aggregation by including as much load from independent government agencies and other willing parties as can be accumulated; and
• Proceeding deliberately to get to market with an RFP to locate an aggregation supplier.

Mayor Williams announced the issuance of an RFP for the MAP suppliers on an opt-in basis through a press conference on October 4, 2002. Recently, the D.C. MAP issued a Request for Technical Proposals (RTP). On May 6, 2003, a pre-proposal conference was convened. The due date for the RTP was May 22, 2003. As a result of this solicitation, no MAP bidders were selected.

DC MAP initiated its third solicitation in the September 2004. Residential customers were not included in the solicitation this time. However, the price bids received only covered the time period until January 2005, thus, no contracts were signed.

D.C. Government hired SAIC and World Energy to conduct a reverse auction on December 20, 2004. A winning bidder Select Energy was selected and a contract was signed as a result of this solicitation.

The D.C. Government has hired Co-eXprise to conduct a reverse auction in December 2006. The D.C. Government plans to conduct another auction for the non-government entities (including residential sector) in September 2008.

PEPCO/Conectiv Merger

On May 6, 2002, the Commission approved the merger of Potomac Electric Power Co. and Delaware's Conectiv Inc. in F.C. No. 1002 (Order No. 12395). The merger was deemed to be in the public interest since it will benefit the public rather than merely leave it unharmed. The key benefits include:

(a) PEPCO will contribute $2 million to initiate a small customer smart meter pilot program in D.C..
(b) PEPCO will absorb the RETF surcharge not to exceed $0.00021 per kWh through August 7, 2007; this amounts to approximately $12 million.
(c) PEPCO will not seek recovery in rates of the District's share of merger-related costs.
(d) PEPCO's distribution rates will be capped at the level of February 7, 2005 for 30 months (i.e., from February 8, 2005 through August 7, 2007 for non-RAD customers and through August 31, 2009 for RAD customers.)
(e) PEPCO offered a transmission "deadband" which further protected the customers from significant increase in transmission rates in case PEPCO remains to be the SOS provider after January 1, 2005.

The merger was also approved by Federal Energy Regulatory Commission, Delaware and Maryland Public Service Commissions, the Virginia State Corporation Commission and the New Jersey Public Service Board.

PEPCO and Conectiv completed their merger on August 1, 2002. A new holding company, Pepco Holdings, Inc., was formed. The combined company has five principal operating units:

The above executives also are Senior Vice Presidents of PHI. Barbara Graham, also Senior Vice President, PHI, will head PHI’s Corporate Services.

On February 9, 2005, a kick-off meeting on smart meter pilot program was held at the Commission hearing room. Currently, the smart meter pilot program working group meets at least once a month to discuss all the implementation related issues.

Fuel Mix and Emission Disclosure

On July 18, 2001, the Commission issued Order No. 12065, which described the requirements for generation and transmission suppliers to disclose fuel mix information to customers. In this order, the Commission decided that, on an interim basis, individual suppliers that procure electricity through contracts, which specify the origins of that electricity as being from specified resources, specified units, or a specified system, must disclose the fuel mix of the electricity they sell in DC.

On August 12, 2002, the Commission issued Order No. 12533 which directed the Working Group to submit, for the Commission’s consideration, proposed interim regulations, including reporting standards and procedures that will govern the disclosure of data by suppliers of the fuel mix that is sold in the District. Moreover, the Order directed the Working Group to provide recommendations on certain specific issues such as the fuel mix reporting format, the timeframe for disclosure of fuel mix, and an implementation plan for reporting. On May 15, 2003, the Working Group filed a report on fuel mix which proposed interim regulations and attached an average PJM regional fuel mix. Pursuant to the 1999 Act, on June 30, 2003, the Commission submitted a fuel mix report to the D.C. Council. In December, 2003, the suppliers submitted their first fuel mix reports to the Commission. PEPCO and the suppliers now provide a fuel mix report to the Commission in June and December of each year.

In 2004, D.C. Councilmember Mendelson introduced Bill 15-872, which requires the Commission to direct each electricity supplier to disclose emissions information regarding carbon dioxide, nitrogen oxide, sulfur dioxide, and any other pollutant that the Commission deems appropriate, for electricity sold in the District of Columbia. The Commissioners testified on this bill before the D.C. Council on September 23, 2004. The Omnibus Utility Amendment Act of 2004 became effective on April 12, 2005. According to the Act, the Commission must determine whether it is feasible for the suppliers to disclose the emission information every six months and may direct suppliers to provide this information either by rule or by order. On May 19, 2005, the Commission issued Order No. 13589 that directed all active electricity suppliers to disclose emissions information semi-annually as required by D.C. Law. Suppliers are to file this information in June and December of each year, along with their fuel mix information. The Commission also submitted a fuel mix report, dated July 1, 2005 to the D.C. Council, pursuant to the 1999 Act. On February 10, 2006, the Commission issued Order No. 13880 which directed several suppliers to file their fuel mix reports consistent with prior directives of the Commission. On May 3, 2007, the Commission issued Order No. 14281, directing certain suppliers to file or re-file their fuel mix reports consistent with prior directives of the Commission. Order No. 14281 also noted that the Commission may pursue certain action—including suspension or revocation of a license or imposition of a civil fine up to $10,000 per violation—against suppliers that do not file as directed.

In response to the fuel mix filings due June 1, 2007, the Commission issued Order Nos. 14351 and 14352 (July 2, 2007) directing certain suppliers to file or re-file their June fuel mix reports consistent with previous Orders. The Commission also issued Order No. 14350 directing BGE Home Products and Services, Inc. to show cause as to why the Commission should not impose sanctions for failing to file certain fuel mix reports.

Pursuant to the 1999 Act, the Commission submitted its fuel mix report to the D.C. Council on July 2, 2007.

On February 1, 2008, the Commission issued Order No. 14717, granting BGE Home Products and Services, Inc. Motion for Leave to File Amended Response and accepted the Amended Response of BGE home to Order No. 14350. Subsequently, in Order No. 15063, issued September 12, 2008, the Commission directed certain suppliers to re-file their June 2008 reports and to indicate whether the information they provided was disclosed to their customers consistent with prior Commission directives.

The Commission finalized the interim rules for its fuel mix and emissions reporting in a rulemaking process. A Notice of Proposed Rulemaking (NOPR) appeared in the D.C. Register on July 11, 2008, proposing rules governing the submission of fuel mix and emission disclosure reports and replacing the interim regulations recommended by the Retail Competition Working Group and later adopted by the Commission in Order No. 12765, issued June 13, 2003, as well as other Commission directives. No comments were filed in response to the NOPR. A Notice of Final Rulemaking (NOFR) appeared in the D.C. Register on September 12, 2008, adopting the rules that appeared in the NOPR.

Net Metering

According to the 1999 Act, the Commission may promulgate regulations regarding net metering. In April 2003, the Commission issued Order No. 12704 and adopted the carry-over approach as the net metering method. Under this approach, a customer’s consumption is offset against the full retail value of the power produced and, as a result, the customer is billed only for the net energy consumed during the billing period. The Commission issued Order No. 13501 and final rulemaking on February 10, 2005.

On April 8, 2005, in compliance with Order No. 13501 and the Net Energy Metering (NEM) rules, PEPCO filed its proposed NEM tariff rider. In Order No. 13623, issued June 24, 2005, the Commission found PEPCO’s NEM Rider to be deficient and provided further guidance regarding the standard contract requirements set forth in our rules governing net energy metering. PEPCO filed a standard contract on July 11, 2005, and comments and reply were filed in July and August, 2005. On February 23, 2006, the Commission issued Order No. 13890 which directed PEPCO to file a revised standard contract. PEPCO made a filing on March 24, 2006. On June 27, 2006, the Commission issued Order No. 13980, which conditionally approved PEPCO's standard NEM contract. PEPCO is directed to file a revised standard NEM contract On July 25, 2006, PEPCO filed a revised NEM standard contract as well as proposed tariff changes reflecting contract revisions. Commission issued a NOPR on October 27, 2006 to invite comments and reply comments on the proposed tariff revisions.

On January 26, 2007, the Commission approved a revised contract and tariff. The Final Rulemaking was published in the D.C. Register on February 9, 2007. PEPCO also filed a report on Low Voltage Alternating Current issues on February 7, 2007. On June 13, 2007, Ms. Athena K. Angelos filed a complaint with the Commission regarding various aspects of PEPCO's net metering practices and related tariff provisions. On October 18, 2007, the Commission issued Order No. 14602, dismissing Ms. Angelos' complaint. On November 30, 2007, the Commission issued a Notice of Proposed Rulemaking amending the District's Net Energy Metering rules.

Several persons commented on the revised net metering rules. On January 25, 2008, the Commission issued an amended NOPR that was sent to the DC Register for notice and comment. The NOPR was published in the D.C. Register on February 8, 2008. The Commission solicited comments and reply comments. OPC and PEPCO filed comments on the amended NOPR. On June 25, 2008, the Commission issued Order No. 14840 and a Notice of Final Rulemaking.

On July 25, 2008, OPC filed an Application for Reconsideration of Order No. 14840, which objected to the level of compensation to be paid to NEM customers for excess generation. On September 11, 2008, the Commission issued Order No. 15061, which denied OPC’s Application for Reconsideration of Order No. 14840.

On December 26, 2008, the Commission issued Order No. 15147, directing PEPCO to update its net energy metering tariff and standard contract so that they will be consistent with the current rules. On January 26, 2009, PEPCO made a compliance filing.

On April 3, 2009, the Commission published a net metering NOPR to expand the size of the eligibility of customer generators from 100 kWs to 1,000 kWs to be consistent with CAEA requirement.

Market Monitoring

On July 31, 2001, in Order No. 12071, the Commission issued its market monitoring regulations governing an Interim Monitoring Program and Interim Report Forms. The Commission found that the market monitoring functions conducted by the Commission and the Office of the People's Counsel (OPC), in compliance with Section 112 of the D.C. Council's Retail Electric Competition Act, should be flexibly designed so as to fulfill current needs in monitoring potential anticompetitive conduct and conditions, while recognizing that modifications may be necessary in the future as the structure of relevant markets become more clearly defined. Month-by-month data on the status of retail competition in the District can be found under Customer Information/Electric Choice/Status of Retail Competition. On the wholesale level, the Commission continues to work with the PJM Market Monitoring Unit to identify potential abuses of market power in the PJM market.

New Electric Generation and Transmission Construction Rules

On August 9, 2004, the Commission issued Order No. 13259, which adopted rules governing the construction of generation and transmission facilities in the District. The Notice of Final Rulemaking (NOFR) was published in the D.C. Register on September 3, 2004. As background, to implement the 1999 Retail Electric Competition and Consumer Protection Act, the Commission had previously issued Order No. 12340, which directed the Retail Competition Working Group to review the existing rules and suggest any necessary revisions. The Working Group submitted a number of revisions on April 30, 2002. Incorporating many of the Working Group’s recommendations, the Commission drafted revised rules for which comments were requested in a Notice of Proposed Rulemaking (NOPR) that was issued on December 27, 2002. OPC and PEPCO filed comments in response to the NOPR. The Notice of Final Rulemaking was issued on September 3, 2004.

Standard Offer Service (SOS) after price caps end on February 7, 2005

The Commission is required, under the Act, to establish standard offer service (SOS) rules and regulations before January 2, 2004, and to select a standard offer service provider before July 2, 2004.

On February 21, 2003, the Commission issued Order No. 12655 to initiate a proceeding Formal Case 1017 to establish a procedure for selecting a new standard offer service provider, given that PEPCO’s obligation to serve as the District’s SOS provider is set to expire by the end of 2004.

In this order, the Commission directs all interested parties to review the list of SOS parameters in the order and to file proposed issues and comments no later than March 20, 2003. Parties filed notice to intervene, comments and proposed issues prior to May 15. On May 15, 2003, the Commission conducted a pre-hearing conference.

On September 29, 2003, the Commission issued Order No. 12932, releasing proposed retail SOS provisions. Comments were submitted on October 30, 2003 and reply comments were submitted on November 17, 2003. On December 4, 2003, the Commission issued Order No. 13005, releasing proposed wholesale SOS provisions. The comments in response to this order were submitted on December 18, 2003.

On December 31, 2003, the Commission issued Order No. 13028 which adopted wholesale SOS rules and regulations. On the same day, the Commission issued Order No. 13027, a companion order which adopted retail SOS rules and regulations. In January and February 2004, the Commission received parties’ comments and reply comments regarding the preferred process for the implementation of SOS. On March 1, 2004, the Commission issued Order No. 13118, which adopts the wholesale Standard Offer Service model to govern the implementation of SOS in D.C. On the same day, the Commission also issued Order No. 13116 which denies the motions for reconsideration and/or clarification on retail SOS process and issued Order No. 13117, which discusses the parties’ applications and motions for reconsideration of Order No. 13028 regarding the wholesale SOS process.

On June 29, 2004, the Commission issued two orders (Order No. 13227 and Order No. 13229) on the parties’ requests for reconsideration of Order Nos. 13115, 13118 and 13119. On July 30, 2004, the Commission adopted RFP documents including Wholesale Full-Requirements Service Agreement, supplier RFP and the associated documents. The bidding RFP was posted on PEPCO's website on August 6, 2004. The Commission selected Boston Pacific as the market monitor for the bidding process. The Commission also issued its SOS administrative charge order (Order No. 13268) on August 19, 2004. The first round of wholesale bidding will start in September 2004. After three rounds of biddings, the winning bids were selected and new SOS rates were posted on the website on November 29, 2004. These new SOS rates were implemented on February 8, 2005.

On April 18, 2005, in Order 13558, the Commission directed Pepco to notify it of the date of the post-bid conference for the first round of wholesale bidding. In addition, interested parties were permitted to file comments on the Commission's proposed second round of wholesale bidding within 14 days of the post-bid conference and reply comments within 7 days thereafter. On June 2, 2005, Pepco proposed a new timeline.

Meanwhile, on May 27, 2005, the Commission issued Order No. 13596, which directed the SOS Working Group to file comments on eleven issues related to improving the second round of wholesale bidding. In response, the SOS Working Group filed its report on the eleven issues on June 16, 2005. Comments were also filed by parties on June 16-17th and reply comments on June 27, 2005. In Order No. 13741, dated August 18, 2005, the Commission accepted in part and rejected in part the recommendations set forth in the Working Group's report and directed Pepco to make a compliance filing amending: (a) the RFP, (b) the Wholesale Full Requirements Service Agreement (WFRSA), and (c) the Rider SOS of Market Price Service Tariff.

On June 21, 2005, the Commission issued Order No. 13618, which adopted Pepco's proposed timeline for the second round of SOS bidding.

On July 29, 2005, the Commission declined OPC's request that Boston Pacific provide it with a copy of the final report on the first round of wholesale bidding, but permitted Boston Pacific to voluntarily provide a redacted report to the OPC.

On September 2, 2005, Pepco made compliance filings pursuant to Order No. 13741 and, on September 23, 2005, the Commission issued Order No. 13765 which accepted in part and rejected in part Pepco's compliance filing. In this Order, the Commission directed Pepco to post its revised WFRSA and RFP consistent with the order on its website on October 3, 2005. PEPCO posted RFP on its website on October 3, 2005 and a pre-bidding conference was held on November 4, 2005. In December, 2005 and subsequent months, PEPCO conducted SOS bidding. After the bidding, PEPCO proposed new SOS rates on March 10, 2006. Based on March 10 filing, beginning with the June 2006 bills, PEPCO anticipates that residential customers will see an annual average increase of 12 percent in their bills (about $8 per month). Small commercial customers’ bills would increase, on average, by about 10 percent. The Commission approved PEPCO’s new SOS rates on March 22, 2006. The new SOS rates became effective June 1, 2006. A post-bid conference was held on June 9, 2006. Parties filed comments and reply comments in response to Order No. 13741 in June 2006.

The Commission issued Order No. 14006 on July 21, 2006. In particular, the Commission established a two-phased approach addressing improvements to SOS procurement process for the next solicitation and initiating a proceeding to review the SOS process and consider the benefits of a portfolio management approach. With regard to Phase I, the Commission sets forth issues regarding the 2006-2007 SOS procurement and invites the SOS Working Group and other interested parties to submit comments and reply comments regarding those issues. Phase II would discuss the issues associated with the new proceeding. Parties filed comments and reply in response to Order No. 14006. In September, Commission issued Order No. 14065, which directed the SOS Working Group to revise the WFRSA and RFP. In addition, this order also directed parties to discuss options on Residential Aid Discount (RAD) rate increases in February 2007 as a result of lifting the RAD generation and transmission price cap. On October 2, 2006, PEPCO posted the RFP on its website. In October, parties have filed comments and reply on the RAD rate increases issues. On December 13, 2006, the Commission issued Order No. 14139, which established the new RAD generation rates effective February 8, 2007. The Commission also accepted PEPCO’s compliance filing on January 18, 2007(Order No. 14171). The third round of SOS bidding was held in December 2006 and January 2007. PEPCO’s new rates were filed on February 22, 2007. Based on this filing, PEPCO anticipated that residential customers would see an annual average increase of 11.6 percent in their bills (about $8.50 per month.) On March 1, 2007, the Commission approved PEPCO’s SOS rates effective June 1, 2007. From July to December 2007, the Commission issued orders related to PEPCO’s fourth round of SOS bidding. The issues discussed include timeline, Renewable Portfolio Standards, RFP and the Wholesale Full Requirement Service Agreement.

In December 2007 and January 2008, the fourth round of SOS bidding was held. On the basis of the results of the bids, PEPCO proposed new generation rates in a filing on February 12, 2008. Based on this filing, PEPCO anticipated that its residential SOS customers would see an annual average increase of 15.5 percent in their bills, or about $12.75 per month. On February 20, 2008, the Commission approved PEPCO’s proposed SOS rates effective June 1, 2008.

In December 2008 and January 2009, the fifth round of SOS bidding was held. PEPCO plans to file the new rates on January 30, 2009. In February, PEPCO’s new SOS rates were approved. For residential customers, the annual increase in their bill is 2.7 percent. These new rates became effective June 1, 2009.

The New SOS Proceeding - Formal Case No. 1047

On June 8, 2006, OPC filed a Petition to initiate and conduct a formal investigation into the procurement process for SOS for residential consumers. After the Commission received comments and reply comments, the Commission granted OPC’s request to initiate the proceeding by Order No. 14006. In Order No. 14271 issued on April 26, 2007, the Commission explained that this new proceeding would address the SOS procurement process for both residential and commercial customers. The Commission also designated a series of questions for discussions in this case. In this order, the Commission invited parties to propose additional issues and propose a procedural schedule. After reviewing parties’ comments and reply comments, in Order No. 14338 issued on June 19, 2007, the Commission directs the SOS Working Group to meet, discuss, and submit a report and recommendations concerning the SOS issues within approximately 4 months. The Working Group submitted a report in October 2007. On October 29, 2007, the Commission issued Order No. 14612, requesting comments and reply comments on the Working Group report and other designated issues. In November and December 2007, the parties filed comments and reply comments.

On February 14, 2008, the Commission issued Order No. 14725 and directed PEPCO to continue as the SOS provider while the Commission continues to explore other SOS alternatives.

Renewable Energy Portfolio Standard

On January 19, 2005, the District of Columbia Council enacted the Renewable Energy Portfolio Standard Act (“REPS Act”), which established a renewable energy portfolio standard (“RPS”) through which a minimum percentage of District electric providers’ supply must be derived from renewable energy sources beginning January 1, 2007, with an ultimate goal of 11% by 2022. Examples of renewable energy sources are: solar energy; wind; qualifying biomass; methane; geothermal; ocean; fuel cells; hydroelectric power other than pumped storage generation; and waste-to-energy.

The REPS Act also required that the Commission adopt regulations governing the application and transfer of renewable energy credits and implementation of the REPS Act. The REPS Act further set a date of January 1, 2006 as the date upon which an electricity supplier may begin receiving and accumulating renewable energy credits. On April 29, 2005, the Commission issued Order No. 13566, which sought comment on 12 RPS-related issues. Several parties filed comments on the Commission-designated issues. On September 23, 2005, the Commission issued Order No. 13766, which resolved certain of the issues raised in the filed comments. Order No. 13766 further directed the formation of a REPS Working Group to examine in more detail certain remaining issues related to the implementation of the REPS Act, and to develop a timeline and recommendations with respect to a two-phased approach to resolving those issues. On October 11, 2005, the REPS Working Group submitted its First Report on the REPS Act. On October 24, 2005, the Commission issued Order No. 13795, which adopted the RPS Working Group's proposed procedural timeline for addressing Phase I and Phase II issues. On October 25, 2005, the RPS Working Group submitted its Second Report on the REPS Act. On November 10, 2005, the Commission issued Order No. 13804, which approved the method for certifying individual generating units' compliance with the RPS Act, and resolved an issue regarding the retroactive creation of renewable energy credits. The RPS Working Group filed Working Group reports on November 23, 2005 and December 22, 2005. On December 28, 2005, the Commission issued Order No. 13840. In this order, the Commission adopted interim rules for RPS. The interim rules, in part, established definitions for various terms consistent with the REPS Act, compliance requirements for electricity suppliers, generator eligibility, rules regarding the creation and tracking of RECs, and rules concerning the recovery of fees and costs. On January 26, 2006, the Commission issued Order No. 13860, which accepted the Working Group's recommendations on comparable state certificates and related issues. The Working Group submitted its Fourth Report commenting on Phase II issues on March 24, 2006.

On March 27, 2006, the Commission issued Order No. 13899 which accepted in part and denied in part the Applications and/or Motions for Reconsideration and Clarification of Order No. 13840.

On July 24, 2006, the Commission issued Order No. 14005 accepting in part, and rejecting in part, the Working Group's recommendations contained in the Fourth Working Group Report and directed the Working Group to consider three (3) issues identified in Order No. 14005.

In response to the Commission's directives in Order No. 14005, on September 15, 2006, the Working Group submitted its Fifth Report of the Working Group on the Renewable Energy Portfolio Act of 2004. No party filed comments in response to the Working Group's Fifth Report. The Commission issued Order 14114 on November 13, 2006. The RPS Working Group filed its sixth RPS Report in December 2006. After parties filed comments, the Commission issued Order No. 14225 on March 2, 2007.

On November 2, 2007, a Notice of Proposed Rulemaking ("NOPR") appeared in the D.C. Register. The proposed regulations established the Commission's rules governing the implementation of and compliance with the Renewable Energy Portfolio Act of 2004. On December 3, 2007, Pepco Energy Services and the Office of the People's Counsel filed comments on the NOPR. No reply comments were submitted. Subsequently, in Order No. 14697 (issued January 10, 2008), the Commission adopted the proposed regulations with certain modifications and indicated that the rules would become effective upon the date of publication of the Notice of Final Rulemaking ("NOFR") in the D.C. Register. The NOFR appeared in the D.C. Register on January 18, 2008.

Calendar year 2007 was the first year of compliance for the District’s RPS program. According to the Commission’s rules, electricity suppliers are required to file compliance reports by May 1 of the calendar year following the year of compliance. In order to facilitate the filing requirements, in Order No. 14782, issued April 10, 2008, the Commission adopted the Electricity Supplier 2007 Compliance Report Form for the District of Columbia Renewable Energy Portfolio Standard.

On April 29, 2008, the Commission issued Order No. 14798, directing behind-the-meter (BTM) generators certified by the Commission as eligible for the District’s RPS program to submit BTM generation reports pursuant to the Commission’s rules. The RPS rules require that renewable energy credits (RECs) created by BTM generators must be recorded in the PJM Environmental Information Services’ Generation Attribute Tracking System (GATS) at least once each calendar year in order to be eligible for compliance. BTM generators are also required to file a generation report with the Commission that corresponds to the recordation of any energy production through GATS.

The Commission’s rules also require that the Working Group file an annual update to the Tier I and Tier II eligibility matrices by February 1 of each year. These matrices facilitate the implementation of a streamlined application process. In particular, the matrices help the Commission determine whether an applicant, certified by another PJM state, meets the RPS requirements for the District. The Working Group did not provide an update consistent with the Commission’s rules, so in Order No. 14809 (issued May 12, 2008), the Commission directed the Working Group to file a report consistent with the RPS rules. The Working Group subsequently responded on October 31, 2008 that no update was required. On February 18, 2009, the Commission issued Order 15192, again directing the Working Group to submit and update the Tier I and Tier II eligibility matrices, consistent with the RPS rules.

After reviewing the various compliance reports, the Commission subsequently released various Orders to address certain issues and ensure compliance with the Commission’s rules. In Order No. 14885, issued August 11, 2008, the Commission directed certain suppliers to file evidence that a Generation Attribute Tracking System account was established and that the RECs reported in their Compliance Reports were properly retired. By Order No. 15077, issued October 1, 2008, the Commission denied Washington Gas Energy Services request to waive the compliance fee for solar RECs because the legislation does not allow an exception.

On October 3, 2008, a Notice of Proposed Rulemaking (NOPR) appeared in the D.C. Register that contained revisions to the RPS rules that would, among other things, allow an applicant seeking to certify a renewable generator for the District’s RPS program to provide a self-certified Affidavit of Environmental Compliance. OPC filed comments on November 3, 2008. On January 2, 2009, the Commission issued an amended NOPR. OPC filed comments on February 11, 2009. In Order No. 15233, issued April 7, 2009, the Commission adopted certain amendments to RPS rules, the self-certified Affidavit of Environmental Compliance, and the Electricity Supplier Annual Compliance Report Form. The revisions became effective upon publication of a Notice of Final Rulemaking in the D.C. Register on April 10, 2009. On April 3, 2009, a NOPR appeared in the D.C. Register containing amendments to the RPS rules-including changes to compliance requirements, generator certification, and definitions. The proposed changes address certain requirements contained in the Clean and Affordable Energy Act of 2008.

As of September 2, 2009, the Commission certified 136 renewable generators for the District’s RPS program. Of the 136 facilities, 123 use Tier I resources (including biomass, methane from landfill gas, wind, and solar energy) and 13 use Tier II resources (including hydroelectric and municipal solid waste). Since these renewable generators may be certified in other states that have an RPS program as well, the RECs associated with the generating capacity are not necessarily fully available to meet the District’s RPS.

Other Current Topics Under Commission Consideration

The following topics will be the subject of hearings and/or orders in 2009:

• Net metering and interconnection of distributed generation
• Energy Efficiency and Demand Response Programs
• Standard Offer Service
• Implementation of the Clean and Affordable Energy Act of 2008

Contact for Further Questions

For more information, call Dr. Grace Hu, Chief Economist and Technical Staff Case Manager, F.C. No. 945, on 202 626-5148 or e-mail her on ghu@psc.dc.gov