An REC is a separate commodity from power generated by renewable energy resources such as wind and biomass. These credits may be traded or sold to customers, typically large-scale energy users, to offset the environmental impact of that customer's conventional energy use. RECs are also purchased by energy producers to meet renewable portfolio standards.
"Being part of M-RETS makes South Dakota even more attractive to wind developers than we were before," said PUC Chairman Dusty Johnson. "Not only is South Dakota one of the windiest states in the country, we now have a viable system for the trading of RECs that adds value to the renewable energy that is produced here," he said.
"We have been working on the M-RETS concept the past three years," said PUC Vice Chairman Gary Hanson. "The 2006 Legislature passed the PUC bill allowing South Dakota to be part of M-RETS. Since then we, along with the regional stakeholders, have focused a great deal of effort on the design and operating procedures for the system," he explained.
"The M-RETS will provide a finance mechanism to help reduce the cost of renewable energy development," PUC Commissioner Steve Kolbeck said. "The electricity produced by a renewable generator is sold into the electric grid. With M-RETS, the generator can also sell the attributes of that same clean energy and use the income to offset its production costs," he explained.
The system is scheduled to be operational in the summer of 2007.