For state utility companies, there are two ways to comply with New Hampshire’s Renewable Portfolio Standard (RPS): acquire the necessary number of Renewable Energy Certificates (RECs) or make Alternative Compliance Payments to the state.

What are RECs?

When a company produces renewable energy at a facility that is qualified by the state, it earns Renewable Energy Certificates (RECs). These RECs are the currency of a regional renewable energy market administered by ISO-New England and the New England Power Pool (NEPOOL). These RECs may be sold by the producer at a market price to utilities that have RPS obligations, as a means of bringing the purchaser into compliance with the RPS. In order to count toward compliance, the RECs must be “retired” so they cannot be double-counted. RECs may also be banked on a limited basis for compliance in future years. RECs may also be purchased by non-utility entities, such as non-profit organizations or business that wish to be green. Those RECs are also retired to avoid double counting.

What is Alternative Compliance Payment?

Utilities do not need to acquire RECs if they are willing to make Alternative Compliance Payments. These payments are meant to penalize utilities that do not comply with the RPS. The value of the Alternative Compliance Payment is set by the State Legislature and adjusted each year by the state Public Utilities Commission to reflect inflation. Alternative Compliance Payments are made into a Renewable Energy Fund administered by the state. Money paid into the Renewable Energy Fund is intended to be used to support the development of additional renewable resources.