70% by 2030 Proceeding Kicks Off at the NYS Commission
By Anne Reynolds
Last week, in case 15-E-0302 (Our favorite case!), NY’s Public Service Commission released the CES White Paper as well as a supporting analysis (CES White Paper Appendix A). Also in this case you will see recent filings of the Draft Generic Environmental Impact Statement on the electricity portions of New York’s climate law, as well the RES Program Impact Evaluation/CES Triennial Review. In short, all of the pieces are in place for this 70% by 2030 proceeding to start in earnest, and ACE NY -- and our members -- will be busy this summer developing Comments and then, likely, Reply Comments on the White Paper. It seems likely the PSC could issue a “CES 2.0” by the end of 2020, and New York would officially have a 70% Clean Energy Standard.
What changes can we expect in the CES? The White Paper proposes several changes, large and small, to the current 50% Clean Energy Standard. First off, the size of Tier 1 procurement for the years 2021 – 2026 would be 24,990 GWhrs, which would require NYSERDA to procure 4,500 GWhr/year. This amount would be reduced by any amount NYSERDA procures in a proposed Tier 4, which is renewable energy delivered into Zone J. While not explicitly stated in the white paper, Tier 4 is designed to support Hydro-Quebec imports delivered into NYC. ACE had previously opposed Hydro-Quebec eligibility for Tier 1, a position sidestepped by the proposed new Tier 4, which would still compete with in-state renewables, albeit indirectly. It is worth noting that a new transmission line dedicated to new Upstate renewables delivered directly into Zone J, or delivery from New Jersey for example, would also be eligible for Tier 4. The White Paper proposes capping the cost of Tier 4 RECs using a benchmark based on prevailing Tier 1 REC prices.
The proposal also requests authority for NYSERDA to procure the entire 9,000 MW of offshore wind, which would require a roughly 1000 MW purchase by NYSERDA each year after the 2020 RFP, which is going to be between 1000 – 2500 MW. NYSERDA also asks for permission to re-sell ORECs to non-LSE entities, such as the voluntary market. The proposal also recommends that NYSERDA conduct a feasibility study on offshore wind energy generation from the Great Lakes. Further, it suggests that, at least in the near term, a separate tier should not be created for Great Lakes offshore wind proposals. There do not appear to be any other major changes to the offshore wind program proposed.
One theme that clearly emerges in the white paper is additional flexibility for NYSERDA. They ask that there be no minimum or maximum annual procurement amount, nor a requirement to conduct a second procurement if the first does not meet the procurement target. They also request the ability to designate a project as “not feasible” and thereby remove it from contention in the annual solicitation, as well as apply factors related to curtailment, network upgrade costs, congestion, and transmission to the proposed portfolio of projects selected in any given year. There would be 20% weighting of project viability, operational flexibility, and peak coincidence in the evaluation process. Lastly, the paper asks for comment on NYSERDA buying RECs when LMBPs are negative at a price of zero, another change from current practice.
While the white paper says relatively little about Tier 2, it does solicit comments on two questions: the role of NYPA resources in a Tier 2 and the ability of NYSERDA to sell Tier 2 RECs to the voluntary market, an issue put forward in the comments of ACE NY and others. Inclusion of Tier 2 into this white paper does seem to signal that the issue will be decided in the same Order as other 70% by 2030 program design questions.
Lastly, the paper again proposes an approach to re-powered projects becoming eligible for Tier 1, a policy ACE NY has supported in the past but the PSC has rejected. In this case, the paper suggests that repowered projects that meet strict criteria should be eligible for Tier 1 for excess generation until the end of the original project’s life, i.e. 20 years for a wind project, and then for all generation after that date. This is a different proposal than last time around.
Not to be a spoiler, but the results of the analysis in the CES White Paper Appendix A start on page 47. The cumulative amount of wind and solar projected to be awarded contracts in solicitations 2021- 2026 are roughly 1,700 MW of wind and 10,000 MW of solar for the base case, and several other scenarios are presented as well. As mentioned above, this amount would decrease based on what amount is procured in Tier 4. In most scenario’s total bill impacts are well under 1%, and data on costs is compared with benefits that include monetization of the carbon avoidance benefits.
As always, ACE NY will be working with members to reach consensus on our policy positions on Clean Energy Standard 2.0, so stay tuned!
