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New York ESCO Seeks To Reduce ZEC Compliance Payment Obligation

January 4, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Lexington Power & Light, LLC petitioned the New York PSC for a reduction of its ZEC compliance payments

Under the ZEC program, each LSE’s requirement is determined based on data provided by NYGATS regarding the load served by the LSE during the previous 12 months

Lexington stated that it, "was informed by NYSERDA that its required payment for ZECs for the Complianc [sic] Year from April 1, 2017 to March 31, 2018 would be based on Lexington’s sales during the period from April 1, 2015 to March 31, 2016."

"Lexington has experienced a significant drop in its retail load in New York State since April of 2016, equaling a 39.77% reduction. As a result, the ZEC payments that Lexington is currently required to make to NYSERDA will exceed its actual ZEC obligations for the twelve-month period ending March 31, 2018 (i.e., the 'Compliance Year') by a significant amount," Lexington said

"These over-payments currently, and will continue to, unjustly discriminate against Lexington as it is being required to bear an actual interest expense not required of other LSEs. Furthermore, the overpayments represent a zero-interest loan subsidy that benefits other LSEs. While Lexington recognizes that over-payments will ultimately be refunded, this over-payment requirement represents a substantial and costly burden to Lexington, which as a competitive LSE, has no captive customers from whom to recover these additional costs. For the reasons listed above, Lexington submits reducing its ZEC payment requirement for the April 1, 2017 – March 31, 2018 Compliance Year is just and reasonable," Lexington said

Lexington requested that the Commission:

• Issue a temporary order suspending Lexington’s obligation to make ZEC compliance payments while the instant request is pending.

• Order NYSERDA to reduce Lexington’s April 1, 2017 through March 31, 2018 ZEC compliance obligation by 39.77% in total, and adjust the remainder of its monthly payments for the current compliance year accordingly.

• Order NYSERDA to absorb the ZEC revenue shortfall that will result from the suspension of this portion of Lexington’s ZEC obligation until the ZEC reconciliation occurs in September 2018.

Lexington noted that the PSC previously reduced another ESCO's ZEC compliance obligation by 35% due to such ESCO's drop in load served (see story here)

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