Effective August 1st, 2016, the New York State Public Service Commission issued Order #15-E-0302 and Order #16-E-0270 in conjunction with and as part of New York State’s initiative “Renewing the Energy Vision” (REV).
These orders cover two different topics. The first order sets the ground work to set up a program in New York State to move the state to a level where 50% of the state’s generating capacity will be from Renewable Energy by the year 2030. As noted in Chart 1 below, excluding Nuclear, Renewable Generation Capacity in New York is currently about 20% of the total generation mix. All entities which supply load to end users (Direct Customers, ESCO’s, and local Utilities) will be required to purchase a regulatory set percentage of their load in Renewable Energy Credits. The first compliance period will be January 1st 2017 thru December 31st, 2017. For 2017, all Load Serving Entities (LSE’s) will be required to purchase an amount of Renewable Energy Credits (RECS) to equal .6 percent of their total load for 2017. For each year thereafter, the percentage of total load required to be purchased will be increased.
The initial percentages required are as follows:
Each year, the New York Public Service Commission (NYSPSC) in conjunction with NYSERDA will evaluate the amount of the new renewable energy generation produced against the total amount of energy produced in New York State and then adjust these percentages to meet the stated goal of 50% by 2030.
If you are already purchasing wholesale power in New Jersey or other PJM states, the procedures for buying and monitoring the REC purchases will be essentially the same. The NYISO will be setting up a monitoring system similar to the GATS system in PJM. LSE’s will be required to file yearly compliance reports which prove that the appropriate RECS were purchased and sold. Those who choose not to purchase their RECS from the market place will be required to purchase the RECS as an Alternative Compliance Payment (ACP) paid to NYSERDA. The price for the ACP will be the published average price of market RECS for each type of generation plus 10 percent. NYSERDA will also offer market RECS for sale based on a published market price with an adder approved by the NYSPSC.
The second order concerns preserving existing at-risk nuclear plants that have zero-emissions attributes. LSE’s will be required to purchase zero-emissions credits (ZECs) directly from NYSERDA in an amount representing each LSE’s proportional share of ZECs calculated by the amount of electric energy load it serves in relation to the total electric energy load served by LSE’s in the New York Control Area. ZEC prices will be set in two year blocks which will start April 1st, 2017 and run through March 2019. The first pricing for the ZECs is planned to be effective April 1st, 2017 and will be $17.48 per MWh of requirement plus an administrative fee for NYSERDA which will be approved by the NYSPSC. Calculations for this price are set forth by a formula in the CES (Clean Energy Standard) Order and incorporate the “social” cost of carbon. A compliance filing for the purchases of these ZECs will be required annually.
ECM will keep you apprised of these developments as we get closer to the beginning of the first compliance period starting January 1st, 2017. If you have any questions or concerns regarding this topic, please do not hesitate to contact us.