Purpose and History

(1)	The State of Texas Renewable Energy Credit (REC) Trading Program was developed as a result of legislative action in Senate Bill 7, Texas Electricity Energy Restructuring. The objective of this part of Senate Bill 7 was to increase the capacity of renewable resource generation in Texas to 2,880 MWs by the year 2009 from an already existing 880 MWs.
(2)	The State of Texas' REC Trading Program was extended and expanded on September 1, 2005 as a result of legislative action in Senate Bill 20, 79th Legislature, 1st Called Session (2005), which amended Public Utility Regulatory Act (PURA) 39.904, relating to the Goal for Renewable Energy. Senate Bill 20 increased the goal of capacity of renewable resource generation in Texas to 5,880 MWs by 2015 and 10,000 MWs by 2025. Senate Bill 20 also stipulates a goal that 500 MWs of the target MWs will be from non-wind renewable generation. This goal is to further promote solar power and biomass technologies.
(3)	In July 2007, the Public Utility Commission of Texas (PUCT) announced its approval for additional transmission lines that can deliver 10,000 more MWs of renewable power by 2012. Competitive Renewable Energy Zones (CREZs) were designated with a defined goal of increasing transmission capacity to move renewable energy from remote areas to cities.
(4)	In support of the State of Texas' goals related to installation of generating capacity from renewable energy technologies, ERCOT was appointed by the PUCT to administer the Renewable Energy Credit (REC) Trading Program. As part of the REC Trading Program, each Retail Entity with Load in Texas is assigned an annual RPS requirement.
(5)	ERCOT Protocols Section 14, State of Texas Renewable Energy Credit Trading Program defines requirements for ERCOT and Market Participant responsibilities.

REC Trading Program Overview

(1)	The statewide Texas REC Trading Program applies to Retail Entities, as defined by the P.U.C. SUBST. R. 25.173, Goal for Renewable Energy and ERCOT Protocols Section 2.
(2)	Retail Entities are required to obtain and retire RECs based on their annual statewide REC mandate.
(3)	Any renewable energy resource or microgenerator that meets the requirements of P.U.C. SUBST. R. 25.173, can earn RECs.
(4)	The statewide Texas REC Trading Program is open to anyone wanting to trade (buy or sell) RECs.
(5)	Opt-out Notice - Beginning with the 2008 Compliance Period, a Customer receiving electrical service at transmission-level voltage (60 kV or higher or that receives electric service directly through a utility-owned substation that is connected to the transmission network at 60 kV or higher) who files an opt-out notice with the PUCT and provides the information to ERCOT for the applicable Compliance Period shall have its Load excluded from the Renewable Portfolio Standard (RPS) calculation. For detailed information about the opt-out notice exemption see P.U.C. SUBST. R. 25.173.
(6)	Any renewable energy resource or microgenerator wishing to earn RECs is required to be certified by the PUCT. The PUCT certification forms are available at the PUCT's website at https://www.puc.texas.gov/industry/electric/business/rec/Rec.aspx.