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ESCO Seeks Reduction In ZEC Compliance Obligation For 2018-19 Compliance Year

April 30, 2018

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Reporting by Paul Ring • ring@energychoicematters.com

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Astral Energy, LLC petitioned the New York PSC for a reduction of ZEC (Zero Emissions Credits) Compliance Payments for the year ending March 31, 2019

"Astral’s energy consultant anticipates that it will experience a significant drop in its retail load for the twelve-month period ending March 31, 2019 (i.e., the 'Compliance Year') and as a result, the ZEC payments that Astral is currently required to make to NYSERDA will exceed its actual ZEC obligations by approximately 47% which will present Astral with significant cash flow issues," Astral said in its petition

"Astral requests that the Commission grant it the same relief that the Commission previously granted in its February 22, 2018 order ('February Order') which directed NYSERDA to suspend 64.4% of Astral’s monthly ZEC compliance obligation payments for the April 1, 2017 through March 31, 2018 Compliance Year," Astral said in its petition

"Astral further requests that the Commission issue a temporary order within fifteen (15 days) reducing Astral’s ZEC obligation by 47% while its Petition is pending. In the alternative, Astral requests a shortened comment period of twenty days pursuant to 16 NYCRR s. 3.1(a) and that the Commission rule on its request before May 29, 2018, two days before the May ZEC Compliance Payment is due," Astral said in its petition

"Astral’s request for such temporary relief is also needed to ensure that Astral will not be characterized as non-compliant for non-payment of its full ZEC Compliance Payment while its Petition is pending. In the February 2018 Order, the Commission clearly stated that, '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,'" Astral said in its petition

Astral noted that it took the PSC six months to grant its prior petition. Having the new petition pending for such amount of time, during which Astral would remain responsible for payment of the currently established ZEC obligation, "is of great concern to Astral because they fear not being able to come up with the cash to make a full payment. In the event this happens and they are sanctioned, Astral is concerned this would be used to deny their petition currently pending that seeks to reinstate their ability to market to and enroll commercial customers," Astral said in its petition

Astral said in its petition that, "The ZECs that Astral is required to purchase in order to use the delivery facilities of New York’s electric distribution utilities regulated by the Commission are unjust, unreasonable and unduly discriminatory as applied to Astral. The number of ZECs Astral is directed to purchase in order to satisfy Astral’s ZEC obligation for the current Compliance Year under the Commission’s Clean Energy Standard, when compared to its actual retail load in New York State for the last Compliance Year, creates actual, material financial costs and burdens on Astral without reasonable compensation. This is because a Commission Order issued in November 2015 suspended Astral’s ability to market to and enroll residential customers. The suspension makes it financially difficult to simply pass the ZEC cost on to the customer because their customer base is much smaller than the ZEC load and would lead to unfair increase on their rate payers. At the same time, Astral cannot enroll more residential customers to help compensate for the costs from a revenue perspective. These circumstances put Astral at significant disadvantage with other LSEs operating in the market places and thus creates a real financial hardship on their business. For this extra-oridnary [sic] situation, Astral believes the charges significantly harm Astral in a manner that does not apply to other LSE and that as a result of the over-collection of ZEC costs from Astral, other LSEs with whom Astral must compete with to sell electricity will have their payment obligations for ZEC costs reduced.."

"Based on current projections for the April 1, 2018 – March 31, 2019 Compliance Year, Astral will experience another significant drop in its retail load, equaling a nearly 47% reduction. As a result, the ZEC payments that Astral is currently required to make to NYSERDA will exceed its actual ZEC obligations for the twelve-month period ending March 31, 2019 (i.e., the 'Compliance Year') by a significant amount," Astral said in its petition

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