As previously reported by EnergyChoiceMatters.com, the original pay-as-you-go ZEC proposal would have required LSEs to make monthly payments to NYSERDA based on the load served by each LSE for the previous month, essentially relying on LSE forecasts. The monthly obligation was to be subject to an interim reconciliation once the Version 2 generation data is provided by NYISO and recorded in NYGATS, which occurs approximately five months following the close of each month. A final reconciliation was to continue to occur after the close of each program year.
NYSERDA said in a recent filing that the New York Generation Attribute Tracking System (NYGATS) will now have access to Version 1 load data from the New York Independent System Operator (NYISO), "which will significantly improve the Plan’s superiority over the present system."
NYSERDA proposes to use the Version 1 load data to establish the monthly 'pay-as-you-go' ZEC obligations of LSEs
"Based on agreement with the NYISO, NYGATS will now have access to the Version 1 load data that is used for initial settlement by the NYISO with LSEs each month. Using Version 1 data in the 'pay-as-you-go' methodology as opposed to requiring LSEs to submit load data to NYSERDA will obviate the need for a quarterly review process and the need for penalties that could have resulted from underpayments discovered months after they were due. The availability of the Version 1 data will allow for near immediate audit, significantly reducing the potential for both under and overpayments by LSEs," NYSERDA said
The LSE’s Version 1 load data will be the basis for their monthly payment to NYSERDA, under the latest proposal
"While a final reconciliation will still be necessary, the financial magnitude of that reconciliation will be greatly reduced. If the Commission approves the 'pay-as-you-go' methodology as outlined in the Plan, NYSERDA proposes to submit a final Plan and a revised LSE agreement reflecting the Commission’s directives," NYSERDA said
The final reconciliation will use NYISO Version 2 data, as described by the New York Power Authority in comments on the latest proposal (NYPA's comments are discussed further below)
As noted above, NYSERDA said that the new proposal relying on Version 1 NYISO data will "obviate" the need for penalties.
Originally, NYSERDA has proposed that LSEs be subject to penalties if LSEs submitted load estimates and payments that were found to be less than 85% of their actual load and the amount properly due for each quarter. This penalty was originally proposed to be equal to 15% of the difference between the payment amount for aggregated estimated load for the quarter and the payment amount for the actual load for the quarter, with the minimum penalty being no less than $1,000. NYSERDA had said that such a penalty was needed due to the five-month period before NYISO Version 2 data was available, since LSEs would be operating under an "honor system" until such data became available to NYSERDA
The joint utilities generally favored the use of Version 1 data, but encouraged NYSERDA to augment the latest proposal with a better defined approach to account for load modifiers.
"Giving the Joint Utilities the option to modify their NYISO Version 1 data in NYGATS to account for load modifiers (or an estimate of load modifiers) prior to determining their monthly ZEC payment obligation will result in more accurate payments throughout the year and will reduce the potential for large reconciliations," the utilities said
The joint utilities also said that the payment timeline proposed in the ZEC implementation plan should be extended
"The 15-day payment term proposed in the ZEC Implementation Plan does not allow LSEs sufficient time to receive Version 1 data, adjust this data to account for load modifiers, or other factors as described above ... and then process and issue payment to NYSERDA. For certain utilities, load modifier data is not verified and made available for these types of purposes until roughly the 20th of each month following the close of the month in question. Processing this data and issuing payment takes additional time. For these reasons, and to improve the accuracy of reporting and payment, the Joint Utilities recommend the payment due date be extended to 45 days following the end of the month," the utilities said
Given the use of Version 1 data, the utilities said that the penalty structure NYSERDA had initially proposed to incentivize accurate reporting should not be adopted
The New York Power Authority said that the final ZEC reconciliation should be based on the NYISO’s six-month Close-Out Settlement LSE Metering Data, and not the Version 2 invoice data as proposed by NYSERDA.
"The ZEC Implementation Plan proposes to reconcile the funds collected from each LSE based on the NYISO Version 2 load data. While NYISO’s Version 2 invoice is based on the refinement and true-ups to the LSE metering data, it is still subject to challenges up to 150 days after the initial service month invoice, which can result in a substantially modified six-month Close-Out Settlement LSE Metering Data load," NYPA said
"In past instances, NYPA has issued challenges during the 150-day finalized LSE meter data challenge period and noted the differential between the Version 2 invoice data and the six-month Close-Out Settlement LSE Metering Data to be over 25% for a load with over 300,000 MWhs in the Version 2 invoice load data. The successful resolution on these challenges have resulted in a substantial downward adjustment to the Load Data," NYPA said