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NYSERDA, NY PSC Staff Release Plan For ESCO Compliance With New Renewable, ZEC Obligations For LSEs

October 31, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

NYSERDA and NY PSC Staff submitted a Phase I implementation plan for New York's new Renewable Energy Standard (RES) obligation imposed on LSEs including ESCOs and the nuclear procurement obligation (ZECs), which among other things discusses compliance requirements and banking rules for ESCOs.

The RES consists of a Tier 1 obligation on every load serving entity (LSE) to serve their retail customers by procuring new renewable resources, evidenced by the procurement of qualifying Renewable Energy Credits (RECs) or through Alternative Compliance Payments (ACPs). The ZEC requirement consists of an obligation that LSEs purchase ZECs from NYSERDA in amounts proportionate to load served.

NYGATS will be the mechanism used for LSEs to show compliance with the standards.

As previously reported, ZECs are not eligible for trading between LSEs or for banking. ZECs may only be used for demonstration of compliance with the current compliance period LSE obligation. NYGATS will set restrictions on the associated ZEC certificates to restrict their movement to only occur between NYSERDA and the purchasing LSE, where they will be retired for compliance.

Regarding trading and banking of RECs for RES compliance, NYSERDA will be authorized to bank Tier 1 RECs for two subsequent compliance periods. Consistent with the CES Order, Tier 1 RECs purchased from NYSERDA for RES compliance will not be eligible for trading in 2017 but can be banked for future compliance according to the conditions below. In 2017, excess Tier 1 compliance RECs originally purchased from NYSERDA may also be sold back to NYSERDA at their cost minus NYSERDA’s administrative adder, if applicable. Tier 1 RECs purchased from entities other than NYSERDA are not eligible for the 2017 buyback provision and may be traded.

For meeting the required percentage for Tier 1 of the RES in any compliance period, only an obligated LSE may use NYGATS certificates associated with production during one compliance year in excess of the compliance year obligation for compliance in the two subsequent compliance periods (banked certificates), subject to the following limitations:

1) Only obligated LSEs, and no other market participants, may bank excess certificates above the current year’s Tier 1 RES LSE obligation for future RES LSE obligation compliance.

2) The obligated LSE is in compliance with the RES for all previous compliance periods.

3) Banked certificates are in excess of the number of certificates needed in the compliance period in which they were generated, and such excess NYGATS certificates have not previously been used for compliance with the RES, and have not been otherwise transferred to other parties.

4) Tier 1 NYGATS certificates banked in any one year do not exceed thirty percent (30%) of the certificates needed by the obligated LSE for compliance in the year they were generated.

5) Banked NYGATS certificates were produced by the generation of electrical energy sold to New York retail customers during the compliance period in which they were generated; and have not otherwise been, nor will be, sold, retired, claimed or represented as part of electrical energy output or sale, or used to satisfy obligations in jurisdictions other than New York, or be used to substantiate any voluntary program claims.

Click here for the implementation plan

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