New York Reforms Clean Energy Standard

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An expansion of New York's Clean Energy Standard (CES) approved by the state's Public Service Commission (PSC) adopts several measures that will help the state meet its new, more ambitious 70%-by-2030 renewable power target.

In an Oct. 15 order, the PSC adopted several changes proposed by the New York State Energy Research and Development Authority (NYSERDA) and the Department of Public Service (DPS) in a June 2020 white paper. NYSERDA and DPS were tasked with identifying a regulatory roadmap to address requirements in the state's July 2019-enacted Climate Leadership and Community Protection Act (CLCPA), which became effective in January 2020.

The CLCPA essentially replaced the August 2016 CES's renewables standard of 50% by 2030 with a new standard that requires that by 2030, load-serving entities (LSEs) in the state should secure enough renewable energy resources to serve at least 70% of load. Pivotally, CLCPA also mandates the deployment of 6 GW of solar PV generation by 2025; 3 GW of energy storage resources by 2030; and at least 9 GW of offshore wind by 2035.

In its order last week, the PSC acknowledged that the the state's ambitious climate and clean energy objective would require a multi-faceted approach that recognizes the need for continued contributions from existing resources and the procurement of significant amounts of additional resources in a timely manner."

Among PSC's most significant CES modifications are that it authorizes NYSERDA to conduct annual Tier 1 solicitations starting in 2021, in amounts necessary to ensure that 70% of load in 2030 is served by renewable energy resources. It also allows NYSERDA to conduct annual offshore wind solicitations beginning in 2021 to achieve the state's goal of 9 GW by 2035. The order also creates a new methodology for extending Tier 1 renewable energy eligibility to renewable energy facilities that undergo repowering.

Additionally, the order creates a new competitive" five-year Tier 2 program to preserve" existing renewable baseline generation. It also creates a new Tier 4 large-scale renewable program to specifically value environmental attributes associated with renewable energy delivered into New York City that will be in addition to annual Tier 1 procurement targets."

According to PSC Chairman John B. Rhodes, these efforts will speed up a build out of smart, economic renewable energy at greater scale." The PSC noted that the state's Accelerated Renewable Energy Growth and Community Benefit Act, which was part of this year's final enacted state budget, creates the Office of Renewable Energy Siting"-one of the first of its kind in the nation-to improve and streamline the process.

But how much more it will cost remains to be seen. To date, notably, New York has invested $3.9 billion in 67 large-scale renewable projects across the state. A cost-and-benefit analysis included in a NYSERDA and DPS white paper suggests incremental Tier 1 large-scale renewable energy procurements would lead to a levelized impact on power bills of less than 0.5%, but yield a net benefit (with avoided carbon factored in) of $7.7 billion over the lifetime of the projects. Offshore wind procurements would lead to a power bill impact of less than 1.1%" and yield benefits of $9.6 billion.

Meanwhile, though the bulk of the order was dedicated to the CES's renewable standard, it also addressed one aspect of the CES's separate zero-emissions credit (ZEC) requirement, a program that subsidizes certain nuclear plants in the states. The PSC said that while [the New York Power Authority (NYPA)] works to renegotiate those contracts and reduce the quantity of uncollectible' load, the current ZEC payment deficit of approximately $34 million should be resolved in the near-term."

In their white paper, NYSERDA and DPS proposed to cure" the ZEC deficit through the use of existing uncommitted and unspent funds relating to the energy efficiency and renewable portfolio standards rather than the investor-owned utility (IOU) backstop" mechanism established in the CES, which the agencies said would require new collections from ratepayers." In its order, however, the PSC rejected that proposal, and it directed IOUs to collaborate with NYSERDA to develop a backstop mechanism that could be included in tariff filings.

Going forward, NYSERDA and Staff should exclude the uncollectable' portion of load when determining the various LSE obligations," the order says.

-Sonal Patel is a POWER senior associate editor (@sonalcpatel, @POWERmagazine).

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