New York PSC Reduce ESCO's ZEC Compliance Obligation Due To "Substantial" Loss In Load

In response to a petition from Astral Energy, LLC, the New York PSC yesterday adopted an order reducing Astral Energy's ZEC compliance payments as set by NYSERDA due to a "substantial" reduction in Astral's load

Currently, LSE ZEC compliance obligations are based on load forecasts which rely on historic load, with a later true-up. As reported by EnergyChoiceMatters.com today, the PSC has directed that the LSE ZEC compliance mechanism be modified to a pay-as-you-go model to account for load changes.

In reducing Astral's ZEC obligation, the PSC said in its order that, "Astral’s load loss is substantial. Data provided by Astral, which includes actual load for April 2017 through December 2017, plus a forecasted load for January 2018 through March 2018, indicates that Astral’s annual load is likely to decline by approximately 64.4% from its reported load for the May 1, 2015 through April 30, 2016 base period that was used by NYSERDA to calculate monthly ZEC payments. Given the substantial change, Astral’s request for ZEC payment relief due to its material decease in load is reasonable."

The PSC stated in its February 22 order on Astral's petition that, "prior to receiving Commission authorization, Astral stopped making its monthly ZEC payments to NYSERDA. To address this situation, Staff issued a January 4, 2018 Notice of Apparent Failure (NOAF). The NOAF directed Astral to make all outstanding ZEC payments to NYSERDA by January 31, 2018 and indicated that Staff would seek a Commission Order to Show Cause for violating the CES Framework Order and would seek remedies as set forth in the Uniform Business Practices §2.D.5.i and §2.D.6 if the payments were not made. In response to Staff’s NOAF, Astral made a payment to its ZEC obligation to NYSERDA. With that payment, in total, Astral has paid 35.6% of its required ZEC obligation, to date, through December 2017. Further, the company has committed to regular monthly payments going forward on a similarly reduced percentage basis. Astral indicated that, due to its declining sales, it was unable to pay 100% of its outstanding original ZEC obligation."

Under the PSC's order, NYSERDA shall suspend 64.4% of Astral Energy, LLC’s (Astral) April 1, 2017 through March 31, 2018 Zero Emission Credit (ZEC) compliance obligation amount. Astral shall make all remaining monthly ZEC payments for the current compliance period at 35.6% of the originally calculated ZEC compliance obligation. The actual April 1, 2017 through March 31, 2018 compliance obligation amount will be trued-up by NYSERDA during the ZEC reconciliation period.

"In light of the dramatic decline in Astral’s load, the Commission finds that the reduction in the ZEC obligation requested by Astral is warranted and therefore is approved. Astral shall continue making monthly ZEC payments to NYSERDA at 35.6% of the original ZEC payment amount, as calculated by NYSERDA. Should Astral fail to make the required monthly payments, it could be subject to enforcement action," the PSC stated in its February 22 order on Astral's petition

The PSC directed NYSERDA to absorb the ZEC revenue shortfall that would result from the suspension of a portion of Astral’s April 1, 2017 through March 31, 2018 ZEC obligation until the ZEC reconciliation occurs in September 2018.

"In March 2018, LSEs will be notified by NYSERDA as to their April 1, 2018 through March 31, 2019 ZEC obligation. This obligation will be calculated in the same manner as the previous ZEC obligation. Astral and all other jurisdictional LSEs should note that these obligations must be paid in accordance with their executed ZEC agreements with NYSERDA. 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," the PSC said