SREC Market Update - Aug 18th 2007

As reporting year 2007 comes to an end, values of 2007 SRECs on the NJ CEP website and the Flett Exchange SREC marketplace have been increasingly winding down. The $200 bid on the bulletin board is stale and an offer at $182.50 has not received any attention. The market on Flett Exchange for 2007 SRECs is $45.00 bid, $180.00 offer. Bids and offers on the Flett Exchange are executable as opposed to the indications placed on the bulletin board which do not show real-time price discovery.

The over-all lack of liquidity in the SREC market currently suggests utilities have filled their RPS and will now focus on reporting year 2008 as system operators begin accumulating 2008 certificates. For reporting year 2006, 1855 SRECs expired, becoming worthless except to the voluntary market, while 163 SCAPs were paid to meet RPS. This signifies market inefficiency in connecting buyers and sellers and in leaving excess supply on the table. Hopefully excess supply will be met by increased RPS requirements for 2008. The number of RPS are slated to continually increase each year in order to bring supply in-line with demand. The next step involves finding an efficient marketplace where they can be sold – Flett Exchange looks to fill this void for the 2008 SREC market and beyond.

New Jersey