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New York PSC To Consider Changing ESCO, LSE Compliance Obligation For ZECs (Nuclear Payments) To Pay-As-You-Go Mechanism

February 23, 2018

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

In response to several petitions from ESCOs to change their Zero Emissions Credit obligation, which is currently based on historic load with a later true-up, Staff of the New York Department of Public Service said at the PSC's session yesterday that Staff will develop for PSC consideration a "pay-as-you-go" model, based on an LSE’s known actual load, rather than a forecast of load.

NYSERDA has proposed, in response to a petition from an ESCO to change its compliance obligation due to a reduction in load, a modification to the way in which all LSEs remit ZEC payments to NYSERDA to a "pay-as-you-go" model, based on an LSE’s known actual load, instead of a forecast based on historic load

Under the proposed approach, NYSERDA and DPS Staff would annually calculate a fixed dollar per MWh rate that each LSE would use to determine their financial obligation based on the actual monthly load served, as opposed to an obligation to purchase a fixed number of ZECs from NYSERDA based on a dated assessment of an LSE’s load share ratio. This process is intended to eliminate the need for the Commission to adjust LSE ZEC compliance obligations and reduce the dollar magnitude of the settlements between NYSERDA and the LSEs during the annual reconciliation process.

The PSC did not adopt the proposed change at this time since the proposal was not fully developed in NYSERDA's comments on the specific ESCO's sought relief.

The PSC did direct, however, NYSERDA and Staff to, "fully develop and submit to the Commission for consideration, an implementation plan that would modify the way in which LSEs remit ZEC payments to NYSERDA from a payment structure based on a fixed ZEC obligation, calculated using the LSE’s historic share of the statewide to load, to a flexible, 'pay-as-you-go' model, based on each LSE’s known actual load."

The alternative pay-as-you-go LSE compliance approach has no bearing on the method of calculating the ZEC price paid to eligible nuclear generating facilities previously set by the PSC

The PSC stressed that the current obligation mechanism will continue in the interim, and that compliance is required

In March 2018, LSEs will be notified by NYSERDA as to their April 1, 2018 through March 31, 2019 ZEC obligation. This obligation will be calculated in the same manner as the previous ZEC obligation. "LSEs should note that these obligations must be paid in accordance with their executed ZEC agreements with NYSERDA. LSEs may not, on their own accord, and without explicit Commission authorization, reduce or eliminate monthly payments for any reason; this includes during the pendency of a petition seeking changes to a ZEC obligation," the PSC stressed

Case 15-E-0302

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