Sale of Solar Renewable Energy Certificates (SRECs)

FAQ Archives - August 2011 Auction

The FAQs on this page are no longer relevant, as they are from past auctions. These FAQs are posted here only for reference purposes. Do not rely on the information provided on this page for the current auction.

FAQ-8:
When will the first auction in which 2012 SRECs are sold take place?

At this time, the next SREC Auction is scheduled to be held in October 2011. It is expected that SRECs generated on or after June 1, 2011 will be available.

08/29/2011 in General
FAQ-7:
When will bidders be informed of the starting price?

Section 2.19 of the Stipulation on the SREC Auction Process (available here) states that the starting price of the Auction will be calculated based on the lower of $475 or current broker quotes. While the Auction Manager expects that the starting price will be $475, an adjustment to the starting price based on a fall in current market prices is possible. The starting price and final number of SRECs will be provided to bidders in their Notifications of Qualification to Bid.

Please note that a bidder is never able to bid more blocks in the Auction than the number of blocks for which the bidder has provided bid assurance collateral. However, a bidder may bid fewer blocks than the number of blocks for which the bidder has provided bid assurance collateral. Thus, each bidder should provide bid assurance collateral for the maximum number of blocks on which it may bid. The bidder may then adjust its bid in the first round of the Auction based on the starting price (the price in round 1) and current market prices.

08/12/2011 in General
FAQ-6:
In section 15 of the contract it says, "Each Party shall indemnify, defend and hold harmless the other Party from and against any Governmental Charges or Claims arising from or out of any event, circumstance, act or incident first occurring or existing during the period when control and title to SRECs is vested in such Party." Does this mean that Party 1 indemnifies Party 2 when title is vested in Party 1 or when it is vested in Party 2?

In this answer, “Party 1” refers to the entity in which title to the SRECs is vested, and “Party 2” refers to the other Party to the Master SREC Agreement. Party 1 shall indemnify, defend and hold harmless Party 2 from and against any Governmental Charges or Claims arising from or out of any event, circumstance, act or incident first occurring or existing during the period when control and title to SRECs is vested in Party 1.

08/12/2011 in Contract
FAQ-5:
Can bid assurance collateral be submitted in the form of a letter of credit?

No. As stated in Section I.2.4 of the Bidder Manual, to participate in the Auction, a prospective bidder must meet basic qualification standards, agree to a standard contract, and provide bid assurance collateral in cash. Letters of Credit are not acceptable as bid assurance collateral.

08/04/2011 in Qualification
FAQ-4:
Why is there an auction being held this August when they are usually held quarterly, in October, January, April, and July?

The EDCs are holding this August 2011 SREC Auction to sell SRECs that were unsold in the July 2011 SREC Auction.

08/04/2011 in General
FAQ-3:
The Bidder Manual says that bids are submitted in blocks of 50 SRECs. If that is the case, how did the July 2011 auction result in the sale of 19,305 SRECs which isn't divisible by 50?

As stated in Section I.2.5 of the Bidder Manual, the block size may be revised prior to each Auction. In the July 2011 SREC Auction, there were 39 SRECs per block.

08/04/2011 in Bidding Procedures
FAQ-2:
Are there SRECs in the August 2011 Auction in addition to those that were unsold in the July 2011 Auction?

While the unsold SRECs from the July 2011 Auction are the primary reason for the August 2011 SREC Auction being held, the August 2011 SREC Auction will also include SRECs that were not available for sale at the time of the July 2011 Auction, but have since become available.

08/04/2011 in General
FAQ-1:
Where do the SRECs sold by JCP&L, ACE and RECO come from?

On March 13, 2009, ACE, JCP&L, BPU Staff, Rate Counsel, and The Solar Alliance entered into a Stipulation by which JCP&L and ACE agreed to coordinate to the extent possible and to use essentially the same SREC-based financing program. This Stipulation outlines the elements of the ACE and JCP&L SREC-based financing program. The Board approved this Stipulation in its Order dated March 27, 2009, and also stated that ACE and JCP&L would coordinate their sale of purchased SRECs with the Public Service Electric and Gas Company auction of SRECs. On December 9, 2010, these same parties entered into a Stipulation amending the ACE and JCP&L SREC-based financing program by increasing the size limit from 500 kW to 2 MW and increasing the flexibility with respect to the developer cap. The Board approved this new Stipulation in its Order dated January 3, 2011.

On July 24, 2009, RECO, BPU Staff, Rate Counsel, and The Solar Alliance entered into a Stipulation by which RECO agreed to coordinate to the extent possible and to use a program similar to the SREC-based financing program approved for ACE and JCP&L. This Stipulation outlines the elements of RECO’s SREC-based financing program. The Board approved this Stipulation in its Order dated July 31, 2009, and also stated that RECO would coordinate its sale of purchased SRECs with the Public Service Electric and Gas Company auction of SRECs. On December 9, 2010, these same parties entered into a Stipulation amending the RECO SREC-based financing program by increasing the size limit from 500 kW to 2 MW. The Board approved this new Stipulation in its Order dated January 3, 2011.

On November 7, 2008, the Board approved the use of auctions to dispose of SRECs held by PSE&G. These SRECs include those generated by solar projects in which PSE&G directly invests and SRECs transferred to PSE&G’s account by borrowers under its loan programs. The Board also approved the use of these Auctions for SRECs held by ACE, JCP&L, and RECO.

08/04/2011 in General