ESCO Seeks Further Reduction In ZEC Compliance Obligation

Liberty Power Holdings, LLC ("Liberty") petitioned the New York PSC to reduce Liberty’s zero emission credit (ZEC) obligation, citing further declines in its retail load in New York State

The PSC previously temporarily suspended 35% of Liberty’s ZEC monthly payment obligation for the remainder of the 2017-18 compliance term.

"While Liberty greatly appreciates the understanding shown by the Commission in reducing Liberty’s ZEC payment obligations for the 2017-18 Compliance Period, Liberty has unfortunately continued to experience further declines in its retail load in New York State since the issuance of that Commission order. As a result, the payments that Liberty will be required to make to NYSERDA during the period from April 1, 2018 to March 31, 2019 (the '2018-19 Compliance Period') will exceed its actual ZEC obligations under the November 17 Order for the twelve-month period ending March 31, 2019 by over 50% and by nearly one million dollars on an annual basis. Accordingly, Liberty is now requesting that the Commission once again exercise its discretion and order a further decrease in its monthly ZEC payment obligations for the 2018-19 Compliance Period," Liberty said in its petition

"As before, this overpayment of ZEC costs results from a significant decrease in Liberty’s New York customer load from the NYSERDA projected calculation of 555,124 MWh, which was based on Liberty’s July, 2016 -- June, 2017 NY load data, and Liberty’s projection for the 2018-2019 compliance period of 243,197 MWh. This material decrease in projected load results in a projected monthly ZEC payment of $63,534 as opposed to the NYSERDA estimate of $145,024 monthly," Liberty said in its petition

"While Liberty recognizes that this overpayment will ultimately be refunded, as the Commission recognized in the July 14 Order, this over-payment requirement represents a substantial burden to a competitive, privately-held LSE, which by definition has no captive customers from whom to recover these costs in the interim. The expected over-payments will create actual interest expense to Liberty that will not be recoverable, and similarly the overpayments represents a zero-interest loan subsidy that benefits other LSEs," Liberty said in its petition

"To minimize the burdens imposed on Liberty by ZEC charges based on out-of-date sales data, Liberty respectfully requests that the Commission direct NYSERDA to temporarily suspend, beginning with the August 2018 payment, 50% of Liberty’s monthly ZEC compliance obligation payments for the 2018-19 compliance period," Liberty said in its petition