New York PSC Denies ESCO's Request For One-Year Extension Of Deadline For Retail Reset Order's Renewable Delivery Requirement To Allow Use Of Specific Compliance Mechanism -- EnergyChoiceMatters.com

New York PSC Denies ESCO's Request For One-Year Extension Of Deadline For Retail Reset Order's Renewable Delivery Requirement To Allow Use Of Specific Compliance Mechanism

May 16, 2022

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Reporting by Paul Ring • ring@energychoicematters.com

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The New York PSC denied a petition from CleanChoice Energy, Inc. seeking a one-year extension of the implementation date for a provision of the PSC's retail market reset order and mass market product requirements; specifically, the requirement that all renewable energy products offered to residential and small non-residential customers must comply with the locational and delivery requirements of the Renewable Energy Standard (RES) Tier 1 program

The PSC noted that the reset order's requirements went into effect on April 16, 2021.

In brief, CleanChoice requested an additional year to utilize the Energy Delivery Delay (EDD) method of compliance

See more background on CleanChoice's petition for an extension here

As summarized by the PSC, "CleanChoice is requesting an extension of the EDD method of procuring RECs, which does not comply with the RES locational and delivery requirements, to enable it to continue to purchase non-compliant RECs to satisfy its renewable energy offering commitments. The Company cites the lack of Tier 1 RECs available for purchase and overreliance on ACPs for compliance as justification for waiving the RES locational and delivery requirements with respect to CleanChoice until January 1, 2023."

The PSC noted that, "For reference, the CES Divergence Test is a process conducted each year by Department of Public Service Staff (Staff) and NYSERDA to determine if there is an under- or over-supply of RECs. Upon that determination, Staff and NYSERDA may recommend the Commission approve a course correction in the Tier 1 LSE obligation. The 2021 Divergence Test acknowledged the slow development of Tier 1 resources due to permitting delays, the COVID-19 pandemic, and a short supply of construction materials. The Commission, reasoning that purchasing ACPs does not provide the same value as supporting renewable resources directly, approved a reduction in the LSE Tier 1 obligation for compliance years 2022 and 2023, therefore reducing the number of ACPs that would potentially need to be purchased to meet Tier 1 LSE obligations. The new LSE obligation percentages will provide relief to all LSEs, including ESCOs, looking to satisfy their Tier 1 obligations. The divergence test relates to Tier 1 LSE obligations and does not modify any percentage of renewable energy requirements for ESCO voluntary renewable product offerings."

"Turning back to CleanChoice’s assertion that it is unable to comply with the requirements of the December 2019 Order related to renewable electric products, the Commission finds this argument unpersuasive as there are several avenues, as discussed above, for ESCOs to purchase RECs to back their voluntary renewable product offerings. It is also important to note that these requirements have already been implemented, with numerous ESCOs taking steps to comply. Waiving compliance with the RES locational and delivery requirements, even for a period of one year, would provide an unfair advantage to CleanChoice. The market for voluntary RECs is fluid and is evidenced by the fact that other ESCOs supplying Community Choice Aggregation (CCA) programs have managed to meet their renewable energy offering commitments as evidenced by EDP labels for products containing 100% renewables," the PSC said

The PSC said, "CleanChoice’s assertion of a lack of Tier 1 RECs also focuses too narrowly on the compliance options available to ESCOs ... ESCOs have several options for purchasing RECs to back voluntary renewable products. For example, unrelated to the CES Tier 1 program, the Commission approved a Competitive Tier 2 program to be administered by NYSERDA to buy Tier 2 RECs and resell those RECs to voluntary purchasers to support the voluntary REC market. NYSERDA has held two solicitations, procuring approximately 60,000 megawatt hours (MWh) and the third is expected in 2022. ESCOs may purchase these Competitive Tier 2 RECs, other New-York based RECs, or import RECs from other states to support their renewable product offerings, as long as the RECs meet the RES locational and delivery requirements."

"The Commission further highlights the availability of the NYGATS Bulletin Board where Account Holders can post RECs available for purchase, and other account Holders can post an interest in purchasing RECs. The Bulletin Board can serve as a tool to assist ESCOs like CleanChoice in finding RECs for sale on the voluntary market and can be viewed by all Account Holders from the list of public reports on NYGATs [sic]," the PSC said

The PSC said, "Lastly, CleanChoice specifically requests an extension so that it can continue to utilize the EDD method of importing energy and RECs while it continues to negotiate with eligible renewable generators to purchase qualifying RECs. CleanChoice was on notice as of the issuance of the December 2019 Order that all voluntary REC purchases made by an ESCO must comply with the locational and delivery requirements of Tier 1 RECs under the RES, foreclosing utilization of the EDD method which does not comply with those requirements. All LSEs were again reminded of these requirements at the 2021 LSE Summer Update, a Webinar hosted by Staff and NYSERDA on July 27, 2021. Given that these requirements went into effect in the middle of the 2021 compliance year, LSEs were reminded at the 2021 LSE Summer Update that 2021 would be that last compliance year in which LSEs could utilize the EDD method of importing RECs to support voluntary renewable electric products offered to customers. Thus, CleanChoice was afforded ample time to seek other avenues of RECs to meet the renewable energy offering commitments to their customers. Based on all of these considerations, the Commission finds that there is no reason to extend implementation of these requirements, which already went into effect, and which are essential to achieving the December 2019 Order’s objective of ensuring that mass-market customers receive value from the renewable energy products offered by ESCOs."

Case 15-M-0127

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