REC treatment, valuation method and PTC assumptions become central fault lines in Utah clean-energy hearing
Get AI-powered insights, summaries, and transcripts
Subscribe
Summary
Agency experts and intervenors told the Utah PSC that the company's IRP assumptions about displaced proxy resources and production tax-credit eligibility materially affect avoided-cost valuations and whether program RECs should be retired or could be donated back to the system.
Salt Lake City — One of the most contested policy issues at the Utah Public Service Commission hearing was how to value the energy and non-energy attributes of any program resource and whether program-produced renewable energy certificates (RECs) must be retired.
Agency expert Kevin Higgins told regulators the company's baseline assumptions in the 2025 IRP are incorrect as applied to the program. "The outdated IRP modeling assumption that the program resource would cause the displacement or loss of PTCs ... is not a minor flaw ... but a fatal 1 that would have a devastating impact on the economic viability of the program resource," Higgins testified, arguing that using those assumptions would assign large, potentially unwarranted costs to the program.
Higgins and other agency witnesses proposed alternatives, including an "energy-only" avoided-cost analysis that would not assume displacement of a proxy capital resource (and therefore would not automatically create a lost-REC penalty). He warned that an annual revaluation of avoided costs, as proposed by the Division, would inject economic uncertainty into long-term PPAs and make developers and the company reluctant to proceed.
Rocky Mountain Power's witnesses described the valuation task as one that must reflect a comprehensive set of inputs (IRP scenarios, production-cost modeling, transmission/interconnection costs and PPA terms) and defended using a Schedule 38-like framework while acknowledging the company delivered further modeling information to the agency on 12/08/2025.
A related dispute centered on REC accounting. The company argues program participants should not receive a net benefit from RECs that nonparticipants would otherwise have; the agency responded that if the Commission orders participants to pay for "lost RECs" the agency should have the option to donate RECs back to the system rather than buy them back — an option the company and some other intervenors oppose.
Municipal witnesses said many residents are motivated by adding clean generation in practice, not REC mechanics. "I don't receive RECs from my rooftop solar; before I was on this, I didn't know what a REC was," Salt Lake City Council member Dan Dugan said. He and other municipal witnesses argued that simple, affordable enrollment terms would matter more to residents than accounting intricacies.
What happens next: The REC and valuation issues were left in the evidentiary record for later briefing; the Commission will weigh whether to adopt a Schedule 38 approach (as modified), an energy-only alternative, or some hybrid. Parties flagged the upcoming IRP update and federal tax-credit timing as material inputs to any final valuation and approval of program resources.