The North American Energy Standards Board’s (NAESB) Retail Markets Quadrant (RMQ) and Wholesale Electric Quadrant (WEQ) Executive Committees recently approved technical implementation standards for NAESB’s base contract for the sale and purchase of voluntary renewable energy certificates (RECs).
Elizabeth Mallett, Director, Wholesale Gas and Retail Markets Quadrants for NAESB, provided an update on the base contract and the implementation standards for Public Power Current on Nov. 3.
Mallett noted that the technical implementation standards are now posted for a thirty-day ratification period that began on October 19, 2022 and will close on November 18, 2022.
Once ratified by the NAESB membership, the technical implementation will be available for industry use and will be included in the upcoming publications of the WEQ and RMQ Business Practice Standards, she said.
“Together, these standards, along with the NAESB REC Base Contract, which was ratified by NAESB membership in November of 2021, seek to provide additional efficiencies to the REC transacting process within the voluntary market thorough the establishment of standard terminology and terms and conditions for contract negotiations,” Mallett said.
The NAESB Base Contract for Sale and Purchase of Voluntary RECs also provides an attestation exhibit allowing parties to evidence transfer of REC ownership, including uniform descriptions of the origins and creation of a REC.
The NAESB REC contract was spurred by a recommendation from Tennessee Valley Authority that NAESB consider a REC contract for distributed ledger technology, or blockchain technology.
In August 2021, the WEQ and RMQ Business Practices Subcommittees voted to unanimously approve a recommendation containing the NAESB Base Contract for Sale and Purchase of Voluntary RECs and a NAESB REC Base Contract Frequently Asked Questions (FAQ) document.
The recommendation was developed over a total of 25 joint meetings between the RMQ Business Practices Subcommittee and the WEQ Business Practices Subcommittee.
Per the NAESB standards development process, once the recommendation was voted out of the subcommittee it was posted for a thirty-day formal industry comment period (August 3, 2021 through September 2, 2021).
During that time, parties were given the opportunity to comment on the document, Mallet noted. NAESB received comments from Cheniere proposing minor edits to the NAESB Base Contract for Sale and Purchase of Voluntary RECS and the NAESB REC Base Contract FAQ for consistency and clarification.
On September 7, 2021, the WEQ and RMQ Executive Committee held a joint meeting to discuss the Cheniere comments and developed late comments that incorporated the proposed changes into the recommendation.
The WEQ and RMQ Executive Committees held meetings in October 2021 to review the recommendation, along with the comments received. Both the RMQ and WEQ Executive Committees approved the recommendation as modified by the Cheniere comments.
After gaining the approval of both of the Executive Committees, the Contract and FAQ Document were ratified by NAESB membership and are now available for purchase.
On the heels of the completion of the NAESB Base Contract for Sale and Purchase of Voluntary Renewable Energy Certificates and the NAESB REC Base Contract FAQ document, the WEQ and RMQ Business Practices Subcommittee moved on to development of the technical implementation to support the NAESB REC Base Contract.
Mallett noted that the technical implementation allows for the electronic use of the contract, including on blockchain technologies.
After a total of 16 meetings, the joint subcommittees voted out a recommendation on July 2, 2022 that included:
- Revisions to the NAESB REC Base Contract FAQ Document,
- Contracts Related Model Business Practice and Business Practice Standards,
- REC Contract Dataset,
- REC Transaction Confirmation Dataset,
- REQ REC Sale and Purchase Invoice Dataset,
- REC Sale and Purchase Invoice Response Dataset.
The recommendation was posted for a thirty-day formal comment period that concluded on August 8, 2022.
Comments were filed in support of the recommendation from the NAESB WEQ Standards Review Subcommittee and Cheniere, who also proposed minor edits for clarity and consistency, Mallett said.
The WEQ and RMQ BPS reviewed the comments and develop a set of late comments that incorporated the proposed edits from the Cheniere comments.
The WEQ and RMQ Executive Committees met on October 18, 2022 and October 19, 2022 and approved the recommendation. The recommendation is now posted for a thirty-day ratification period by the NAESB membership.
Once ratified, the standards will be available for industry use and included in the next NAESB publications for the Retail Markets Quadrant and Wholesale Electric Quadrant.
NAESB members have access to the documents by way of their membership. Nonmembers that want to purchase the standards may fill out the NAESB Materials Order Form on the NAESB website.