By Pat Frazier, Chief Operating Officer
The beginning of a New Year is a good time to follow up on my last article’s mention of Renewable Energy Credits (RECs) and their fit with PA 235, the state’s renewable and clean energy mandate. In 2025, to comply with PA 235, Cloverland must meet its annual energy supply with at least 15% generated from renewable energy sources such as solar, wind or hydro. PA 235 allows municipality-based utilities in Michigan to meet their 15% requirements under PA 235 by using RECs, which do not transfer the energy to the buyer, but instead, transfers the right to claim renewable attributes. In other words, RECs are significantly cheaper relative to actual energy generated from renewable sources. Fortunately, Cloverland generates and purchases approximately 50% of its energy from renewable hydro sources. In simple math, Cloverland has 50% of renewable energy available, Cloverland annually needs 15% renewable energy to meet PA 235, which equals 30% of the renewable energy available from the hydro sources. Others, like municipal utilities, need RECs to meet PA 235 requirements, which results in a natural market for Cloverland to sell the remaining 70% of the RECs tied to the hydro sources. To be clear, Cloverland is not selling the energy associated with the hydro sources, only the associated RECs. Below is a chart showing Cloverland’s historical RECs sales and revenues. To date, marketing and selling RECs has produced a total revenue of nearly $5 million.
