New York PSC Rules Municipal Aggregations May Not Offer Stand-Alone Community Solar On Opt-Out Basis At This Time, CCA Must Also Offer Retail Energy Supply For CDG Opt-Out

July 16, 2021

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Reporting by Paul Ring • ring@energychoicematters.com

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The New York PSC issued a declaratory ruling clarifying that, "the Public Service Commission’s prior orders, issued in this proceeding [Case 14-M-0224] on April 21, 2016, and March 16, 2018, permit the integration of a Community Distributed Generation product, on an opt-out basis, in connection with a Community Choice Aggregation program. However, Community Distributed Generation cannot currently be offered in an opt-out manner on a stand-alone basis."

"[C]onsistent with the CCA [community choice aggregation] Framework Order and the Joule Order, the Statewide rules allow a CDG [community distributed generation] product to be integrated into a CCA program on an opt-out basis where the CDG product is offered in connection with a CCA supply product. However, CDG cannot be offered in an opt-out manner on a stand-alone basis at this time," the PSC said

"This Declaratory Ruling clarifies our current rules while further consideration is given to matters pending before the Commission that seek authorization to offer independent CDG products on an opt-out basis," the PSC stated

The PSC noted that, "The Joule Order authorized Joule to offer CDG on an opt-out basis as an additional product offering to a CCA program. This combination of CCA and CDG represents the type of progressive product offerings originally envisioned in the CCA Framework Order as future stages of CCA programs in New York State. However, it is clear from the CCA Framework Order and the Joule Order that inclusion of additional opt-out product offerings into a CCA program would require the existence of a CCA program in that municipality. This means that a given municipality must be receiving a competitive supply product under a CCA program in order to integrate additional product offerings, such as CDG, into that program. In fact, there is no CCA program without the presence of a competitive supply product."

The PSC noted that the prior Joule Order stated that, "CCA programs provide municipalities with the opportunity to aggregate electric and/or gas supply on behalf of their residents and small businesses on an opt-out basis. In the CCA Framework Order, the Commission recognized that CCA offers residential and small non-residential customers an opportunity to receive more favorable energy supply terms through the bargaining power that aggregation provides, the expertise provided by municipal or consultant experts, and the competitive public process for choosing a supplier." [emphasis by PSC]

"This point is further emphasized by the fact that CCA programs end if a CCA supply contract expires. The Joule Order specifically noted that 'an updated Implementation Plan must be submitted for Commission consideration at least 120 days prior to the expiration of any CCA supply contract to identify plans for soliciting a new contract, negotiating an extension, or ending the CCA program," the PSC said

The PSC stated that, "Joule recognizes that, in some instances, a municipality may not be able to obtain acceptable terms for a competitive supply product, but may wish to nevertheless implement CDG on an opt-out basis. As Joule concedes, the issues surrounding obtaining competitive supply on Long Island may lead to municipalities offering only CDG on an opt-out basis for a period of months, or even years, until a favorable competitive supply agreement is executed."

However, the PSC said that, "This outcome is inconsistent with both the CCA Framework Order and the Joule Order."

"The Commission therefore rejects Joule’s interpretation of the Joule Order that 'a municipality may enter into a CDG contract independent of and even prior to executing a commodity supply contract' regardless of the municipality’s intent to implement a CCA supply product at a later date," the PSC said

"This would permit CCA administrators and municipalities to offer CDG on an opt-out basis as a stand-alone product, which is something not permitted by either the CCA Framework Order or the Joule Order," the PSC said

"The result urged by Joule would inappropriately expand the products and services that can be offered on an opt-out basis before the Commission can evaluate the process and consumer protections necessary for such an opt-out offering. While this evaluation has been done with respect to CCA programs, it is currently underway for stand-alone CDG programs. The Commission notes that the issue of whether stand-alone CDG should be permitted to be offered on an opt-out basis is currently being assessed as part of two separate petitions and a Staff whitepaper filed in this proceeding. To the extent the Commission allows stand-alone CDG to be offered on an opt-out basis in the future, that decision will be made as part of those rulemaking processes, since such a change would represent a change in the CCA Framework Order and the Joule Order and go beyond the relief available under a declaratory ruling. Accordingly, the Commission clarifies that a CDG product may not be offered, at this time, as a stand-alone product on an opt-out basis," the PSC said

Case 14-M-0224

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