This bill amends the Renewable Portfolio Standard (RPS) by introducing new eligibility criteria for renewable energy systems and adjusting the duration of renewable energy certificates (RECs). Specifically, it limits REC eligibility to systems that began operation before 2026, with a provision allowing systems that start within six months of the bill's effective date to enroll. Furthermore, the bill caps the maximum lifetime eligibility for receiving RECs at 20 years, with an allowance for systems that have already received RECs for over 15 years to obtain up to five additional years of credits. The Department of Energy is also tasked with revising alternative compliance payment (ACP) requirements annually as the number of eligible systems declines.

The bill's effective date is set for July 1, 2026, and it is expected to have a significant fiscal impact on the Renewable Energy Fund (REF). As the bill mandates annual reductions in ACPs, which are crucial for funding the REF, it could lead to a decrease in revenue and potentially threaten the sustainability of REF-funded programs and positions. The Department of Energy has indicated that while the bill can be implemented within its current administrative structure, the long-term implications of reduced ACP revenue could result in the elimination of essential programs and staff that support REC certification and compliance.