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Group Of New York ESCOs Petition For Approval Of Several Green Gas Programs For Mass Market, Not Subject To Price Cap

July 6, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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A group of New York ESCOs have petitioned the New York PSC to authorize several green gas natural gas programs developed by the certain members of the NY Subgroup participating in Track II of the retail market reset proceeding, with such programs not being subject to the price cap otherwise applicable to mass market service

As previously reported, several individual ESCOs have earlier petitioned for adoption of various types of green gas programs that would not be subject to the mass market price limits

While not a consensus product from the Track II subgroup, petitioning ESCOs said that their proposals are informed by such group, and that the subgroup met multiple times and worked together collaboratively to identify products that should be permitted to allow environmental attributes bundled with natural gas supply to help meet the State’s climate goals and provide mass market customers with additional, environmentally-friendly natural gas choices. The subgroup also focused on the need to establish minimum standards for several green gas products, as well as tracking and verification methodologies that ensure that product offerings are transparent and properly disclosed to customers, petitioners said

The petitioners' Industry Proposal contemplates three types of green gas products that could be offered to mass market customers

• A carbon offset product;

• A Regional Greenhouse Gas Initiative (RGGI) product, and

• A Renewable Energy Certificate (REC) based green gas product.

The carbon offset product would have a minimum standard of: (1) At least 50% of the customer’s load is offset; (2) the offset must be purchased and retired using a verifiable registry such as, but not limited to, the ones mentioned below; and (3) the customer is provided with transparent information and accurate product disclosures.

The RGGI product would have a minimum standard of: (1) At least 50% of the customer’s actual usage or (2) A set number of RGGI allowances equal to at least 50% of the average annual usage of the customer class. For each such product the RGGI allowances must be purchased and retired, and the customer is provided with transparent information and accurate product disclosures.

Under a REC-based green gas product, an ESCO will purchase and retire on the customer’s behalf an amount of RECs corresponding to the customer’s natural gas usage. The customer could select a percentage (i.e., 50%, 75%, 100%) of their natural gas usage. The amount of RECs would be determined by a conversion factor. The ESCO would purchase and retire the requisite number of RECs on an annual basis through the New York Generation Attributes Tracking System

Petitioners said that the Commission identified specific methods by which ESCOs can purchase environmental attributes to support a voluntary renewable electricity product. Petitioners said that those methods should be permitted to be used for REC-based green gas products as well. The methods identified by the Commission include:

1. Purchasing RECs from eligible renewable generators through NYGATS;

2. Purchasing Tier 1 RECs from NYSERDA;

3. Procuring RECs from eligible renewable generators through bilateral contracts;

4. Making Alternative Compliance Payments (ACP) to NYSERDA; or

5. Entering into bundled energy and REC purchase agreements with eligible renewable generators

Petitioners said, "ESCOs should be provided the flexibility to offer natural gas products with varying content levels, subject to the minimum standard discussed herein. For instance, an ESCO can design a RGGI-backed green gas product based on a volumetric amount of natural gas per year that is equivalent to at a minimum 50% of a customer’s load (e.g., 50 MMBtus, 100 MMBtus) or a percentage of the customer’s natural gas usage (e.g., 50%, 100%). A carbon offset product could match 100% of a customer’s load or can be some other percentage that meets or exceeds the 50% standard to meet the customer’s preferences. The REC product could offset 100% or 50% or some other percentage of a customer’s natural gas usage as long as it meets the approved product standard. These market-based solutions provide customers with options based on their interest and desired price points."

Further details concerning the petition will be provided in a later updated story to follow

Petitioners include American Power & Gas, Constellation NewEnergy – Gas Division, LLC, Family Energy, Just Energy, Kiwi Energy NY, LLC, Marathon Energy, the NRG Energy Inc. retail companies operating in New York which include Direct Energy Business, LLC, Direct Energy Business Marketing, LLC, Direct Energy Services, LLC, and Gateway Energy Services Company in addition to Green Mountain Energy Company, Reliant Energy Northeast LLC d/b/a NRG Home and d/b/a NRG Business Solutions, Energy Plus Holdings LLC, Energy Plus Natural Gas LLC, Independence Energy Group LLC d/b/a Cirro Energy, XOOM Energy New York, LLC, and Stream Energy New York, LLC, and Viridian Energy PA, LLC.

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