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03-E-0188: Renewable Portfolio Standard - Home Page



Retail Renewable Portfolio Standard
Case 03-E-0188


About the Initiative
The 2002 State Energy Plan required that the New York State Energy Research and Development Authority (NYSERDA) examine and report on the feasibility of establishing a Renewable Portfolio Standard (RPS). NYSERDA's preliminary report found that an RPS can be implemented in a manner that is consistent with the wholesale and retail marketplace in New York and that an RPS has the potential to improve energy security and help diversify the state's electricity generation mix. The report also stated the expectation that an RPS would spur increased economic development opportunities in the renewables industry, including the attraction of renewable technology manufacturers and installers. Accordingly, on February 19, 2003, the Public Service Commission (Commission) instituted a proceeding to develop and implement a RPS for electric energy retailed in New York State to address increasing concerns with the climate effects of, and over-dependence on, fossil-fired generation.

On September 24, 2004, after a year and a half of public hearings and participation by over 150 parties, the Commission issued its "Order Approving Renewable Portfolio Standard Policy." That Order identified the Commission's renewable energy policy and provided definitions and targets for carrying out the policy. The policy calls for an increase in renewable energy used in the State from the then current level of about 19% to 25% by the year 2013. Two approaches were identified to achieve that goal: a central procurement approach that would provide for increases to about 24% and a voluntary green market approach that would provide at least the other 1%.

The central procurement approach provides for the regulated investor-owned utilities to collect a surcharge on most delivery customer bills and transfer those funds to the NYSERDA who administers the RPS program for the Commission. NYSERDA enters into contracts to provide incentives, based on actual production, to renewable energy producers who either sell and deliver their energy into the New York wholesale market or will provide funding for customers to install such facilities "behind the meter". In return for these incentives, the energy producers agree not to sell the environmental attributes of their renewable energy to any other entity during the terms of their agreements. Unlike most other jurisdictions, there is no requirement on utilities to purchase renewable energy as part of their energy portfolios, but the affect of the incentives will be that more renewable energy will be sold by producers into the New York Independent System Operator (NYISO) sponsored wholesale market and there will be further encouragement for the installation of renewable resources by customers on their sides of the meters. These actions will, in turn, affect the percentage of renewable energy used in the State.

As part of the September 24, 2004 Order, the Commission directed that an Implementation Plan be developed and approved to guide the program through 2013. Shortly after the Order was issued and prior to development of the Implementation Plan, however, Congress authorized an extension until December 31, 2005 of the Production Tax Credit (PTC) allowable for certain renewable facilities. To take advantage of the credit, the Commission quickly authorized, on December 16, 2004, a "Fast Track" procurement under the RPS to facilitate development of renewable resources that might be able to meet the December 31, 2005 deadline. As a result of that solicitation, 22 proposals were submitted by the January 18, 2005 deadline, and awards were given to seven projects. Those seven projects were to begin in 2006 to produce 821,000 MWH per year of renewable energy, which filled the majority of the Commission's first year goal for meeting the 25% target by 2013. A subsequent solicitation took place in 2006 and others will occur from time-to-time until the full goal is met.

Subsequent to the completion of the "Fast Track" solicitation, the Implementation Plan was developed and approved by the Commission by Order issued April 14, 2005 (see Appendix A of the Order) The Implementation Plan identifies the procedures for determining eligibility, establishing future procurements, and monitoring the program. It also identifies other actions that were needed for the program to go forward. Interested party workshops were then held during the summer of 2005 to address several outstanding issues, and notices under the State Administrative Procedures Act (SAPA) were issued. Comments from interested parties were received and considered by the Commission as part of its review of plans for the next RPS solicitation.

By Order issued October 31, 2005 the Commission modified its prior orders with respect to issues associated with "maintenance resources", i.e., existing facilities included in the baseline that are in danger of ceasing operations because of financial difficulties. The Commission clarified that projected costs for the facility should be based on a "to go" form of analysis that considers going forward operating costs and new capital expenditures and does not consider sunk costs. The Commission also clarified that its Order in each proceeding would specify the specific relief to be given based on case-specific circumstances. Existing projects found eligible would no longer automatically be allowed to participate in future solicitations. Maintenance resource requests submitted prior to the date of this Order are exempt from these modifications.

By Order issued November 2, 2005, the Commission acted on a petition filed by The Farm Bureau of New York. The Commission agreed to allow anaerobic digestion generator systems to be added to the list of eligible Customer-Sited Tier (CST) technologies. This action will provide opportunities for small farms to participate in the program, receive economic benefits, and handle their farm wastes in more environmentally effective ways. Subsequently, the Commission clarified that similar anaerobic digestion systems employed at non-farm locations will also be eligible.

By Order issued January 26, 2006, the Commission authorized NYSERDA to conduct additional solicitations of Main Tier resources in 2006 and 2007. The Commission also directed several changes to the RPS Program and made several findings that would lead to additional modifications after subsequent reports were prepared by Staff. Three notices requesting comments on the proposed modifications were published in the New York State Register pursuant to the SAPA. Comments in response to the notices were to be sent to the Secretary of the Commission in accordance with the instructions in the notices. The SAPA notices (03-E-0188SA14, 03-E-0188SA15, and 94-E-0952SA38) and the Express Terms associated with them are linked below.

By Order issued June 28, 2006, the Commission acted on the proposals identified in the three notices. In particular, in the first Order, it authorized a plan for solicitation of Customer-Sited Tier resources and made several modifications to the program. In a second order, it recognized environmental attributes and authorized, in Main Tier solicitations, participation of projects with physical bilateral contracts. In the third Order, it modified the delivery requirement for imports from intermittent generators (i.e., required hourly matching of generation and delivery to New York in lieu of the previously-allowed monthly matching requirement).

By Order issued January 26, 2006, the Commission directed use of a declining clock auction format for the next Main Tier solicitation, but it indicated that Staff should report back if it ultimately appeared that the market was not yet ripe for use of such an approach or if the mechanics of the model could not be developed in time for the solicitation. On July 21, 2006, Staff notified the Commission that the model was not ready for use. Thereafter, SAPA notice 03-E-0188AS16 was issued to allow parties to comment on the mechanism that should now be used for the solicitation. On September 1, 2006, the Commission extended the deadline for comments and also invited comments concerning the criteria that should be used for evaluations of bids that would be submitted. These issues were subsequently decided by the Commission at its October session and put forth in an Order issued October 19, 2006.

NYSERDA thereafter prepared a request for proposals (RFP No. 1037) for procurement of environmental attributes created by eligible Main Tier generation resources. The RFP was issued on November 14, 2006.

On February 12, 2007, NYSERDA released its Operating Plan for the CST portion of the RFP program. This plan provides an overview of the various mechanisms that NYSERDA will use to support development of renewable resources by customers behind their meters.

On August 9, 2007, the Staff reported on the status of the RPS program following two solicitations for renewable generation, which resulted in contracts for approximately 3 million megawatt hours (MWh) of renewable energy from 26 projects, totaling more than 800 MW. This report also addressed RPS program costs.

By Order issued October 28, 2008, the Commission changed the RPS program by reallocating and increasing funding for specific programs of the Customer-Sited Tier in response to changing market needs for specific eligible renewable energy technologies. The increased funding came from a cash flow balance of approximately $47 million which was available within the existing RPS program. Funding was allocated as $20.6 million for the solar photovoltaic category, $7.6 million for the anaerobic digester biogas systems category, $15.1 million for discretionary use, and $4.7 million for evaluation, measurement, and verification.

On January 14, 2009, Staff issued its Status Report on expenditures and renewable resource acquisitions for the period ending December 31, 2008 under the Customer-Sited Tier. Staff reported that there appeared to be sufficient funds to continue support for all four technologies through at least April 2009.

On March 31, 2009, NYSERDA submitted its New York Renewable Portfolio Standard Program Evaluation Report (2009 Review), as mandated by the Commission’s April 14, 2005 Order in Case 03-E-0188. The NYSERDA Evaluation Report included a Summit Blue Market Conditions Assessment Report and a KEMA New York Main Tier RPS Impact & Process Evaluation Report.

By Order Issued June 22, 2009, The Commission adopted changes to the RPS by reallocating and increasing funding for the solar photovoltaic program of the Customer-Sited Tier by $15 million in response to continued increasing market demand and made a corresponding $600,000 reallocation for increased evaluation. The increased funding comes from approximately $110 million of unencumbered funds in the RPS program, primarily from projects that were chosen in previous renewable energy procurement solicitations, but never materialized.

Staff issued its Mid Course Report on the RPS on September 2009. This report provided a review of the current status of the program, including a review of the NYSERDA Evaluation Report, and presented the Staff’s proposals for the RPS program going forward.

On January 8, 2010, The Commission issued its Order establishing new RPS goal and resolving Main Tier Issues. The order establishes a new RPS goal and MWh target and resolves several issues related to the RPS program, with a primary focus on the Main Tier. It adopts a goal of 30% renewable energy by the year 2015. It also authorizes an additional Main Tier solicitation of $200 million, consistent with the results of a recent solicitation and the MWh trajectory needed to meet the revised goal. The Commission also requested that Staff consult with interested parties to develop plans to address the use of Contracts for Differences and a perceived disparity between the provision of RPS funds and RPS project locations.

On January 14, 2010, Staff held a technical conference on using Contracts for Differences in bidding for the Main Tier solicitations. On January 15, 2010, Staff held an additional technical conference concerning Geographic Balancing within the RPS program. Staff provided straw proposals for discussion.

On April 2, 2010, the Commission issued two Orders, one resolving certain Main Tier issues from its January 8, 2010 Order and the other addressing CST issues, including a new Geographic Balancing program within the CST, as well as setting the budgets and collections for the RPS program through 2024. On June 30, 2010, NYSERDA issued its Operating Plan for the CST going forward as required by the Commission in its April 2, 2010 CST Order.

On December 3, 2010, a Commission Order authorized an additional Main Tier solicitation and provided guidance in issuing future Main Tier solicitations. NYSERDA was authorized to conduct future Main Tier solicitations, without Commission approval, for RPS Main Tier resources, after consultation with Staff and approval by the OEEE Director prior to each solicitation. Contract awards shall be for a ten-year term. The contracts with fuel-based renewable energy generators will have an escape clause actionable every two and one-half years so that the generator may drop out of the program if it is unable to secure a continuous fuel supply at a price that supports its contract with NYSERDA. The selection of winning bids will continue to be based on a weighted combined score with price comprising 70% and economic benefits at 30%. As before, only renewable generation facilities that commence commercial operation on or after January 1, 2003 will be eligible to bid.

On November 22, 2010, the Commission approved the use of biomass material sorted at Material Reclamation Facilities (MRFs) for use as a biomass fuel for RPS eligible generation in response to a petition.

On November 24, 2010, a Commission Order addressed a petition to allow "behind the meter" contracts and wholesale delivery to utility/municipal utility/public authority entities to bid in Main Tier procurements.

On August 19, 2011, in its Order, the Commission responded to a petition by declining to add regenerative drive generation to the RPS list of eligible technologies.

On September 19, 2011, the Commission issued an Order addressing a petition from NYSERDA on several topics, including the reallocation of unencumbered funds from the previous calendar year.

On April 20, 2012, the Commission authorized the reallocation of unused RPS funds from 2011 into the 2012 program budgets, and also resolved additional issues raised by NYSERDA's petition.

On April 24, 2012, the Commission expanded the solar photovoltaic and Geographic Balance programs within the CST to reflect the goals of the new NY Sun initiative.

On August 16, 2012, the Commission denied the petition of Niagara Generation, LLC for contract modification, and eligibility of wood products containing up to ten percent glued wood for direct incineration, within the RPS Program.

By Order issued January 23, 2013, the Commission authorized NYSERDA to increase its maximum incentive available under the Anaerobic Digester Gas-to-Electricity program in the CST of the RPS from $1 million up to $2 million per installation.

By Order issued February 14, 2013, the Commission authorized NYSERDA to increase its maximum incentive available under the On-Site Wind program in the CST of the RPS from $400,000 up to $1 million per installation.

By Order issued May 22, 2013, the Commission authorized NYSERDA to reallocate $29,032,535 in unencumbered RPS CST 2012 Program funds to 2013 budgets for the Solar Photovoltaic, Anaerobic Digester Gas to Electricity, Fuel Cell, and On-Site Wind programs.

By Order issued May 22, 2013, the Commission authorized NYSERDA to limit Main Tier bids and Main Tier contracts to bidders proposing to meet their RPS obligations with renewable resource energy generated inside the State, or through an offshore generating facility directly interconnected to New York’s electrical grid.

By Order issued June 13, 2013, the Commission authorized the NYSERDA to reallocate $32 million in RPS CST solar photovoltaic competitive program funds, to better meet current market conditions.

By Order issued July 22, 2013, the Commission authorized NYSERDA to modify the RPS CST solar photovoltaic programs to help meet the goals of the NY-Sun initiative. An additional tier of standard offer incentives was adopted for larger commercial solar photovoltaic systems, and the eligible size for residential installations was increased.

On October 15, 2013, The New York State Department of Public Service staff held a technical conference at Three Empire State Plaza, in Albany, New York, on the RPS, the Energy Efficiency Portfolio Standard (EEPS), the New York Green Bank (NYGB), and in the matter of the System Benefits Charge III.

By Order issued December 19, 2013, the Commission authorized the NYSERDA to:

By Order issued December 23, 2013, the Commission reaffirmed the May 22, 2013 Order (Modifying RPS Program Eligibility Requirements), in which, the Commission authorized NYSERDA to limit RPS Main Tier bids and Main Tier contracts to bidders proposing to meet their RPS obligations with renewable resource energy generated within the State, or through offshore generating facilities directly interconnected to New York’s electrical grid. On June 21, 2013, HQ Energy Services (U.S.) Inc., requested rehearing of the May 22, 2013 Order. The Commission granted HQ’s Petition for rehearing, in part, and otherwise denied HQ’s Petition for rehearing and affirmed the determination of the May 22, 2013 Order.

By Order issued April 24, 2014, the Commission authorized NYSERDA to allocate up to $960,556,000 for the continuation of the solar PV programs, currently under the CST of the RPS program, during the term 2016 through 2023. Also, the Commission approved the design criteria advanced by NYSERDA for the Megawatt Block approach to administering the solar PV programs, and authorized NYSERDA to develop and submit an Operating Plan to the Department, prior to program implementation. Further, NYSERDA is authorized to use 1.5% of the funds ($13 million) for projects to help advance participation by low to moderate income customers in these programs. Finally, NYSERDA is required to provide net metering study to the Department.

On April 24, 2014, the Environmental Assessment Form was filed, for Modifications to the RPS Program to fund and implement the solar PV Megawatt Block programs. The report is dated April 9, 2014.

By Order issued May 8, 2014, the Commission instituted a proceeding to consider the development of a comprehensive New York State Clean Energy Fund. Also, the Commission authorized NYSERDA to develop and submit a comprehensive Clean Energy Fund proposal for Commission consideration and directed NYSERDA to file a stakeholder outreach plan and schedule for the development of the comprehensive Clean Energy.

By Order issued July 2, 2014, the Commission authorized NYSERDA to increase the maximum length of RPS Main Tier contracts to a term not to exceed 20 years, and directed NYSERDA to issue one solicitation as soon as practicable in 2014 and no less than one solicitation in 2015.

By Order issued July 2, 2014, the Commission authorized NYSERDA to reallocate unencumbered RPS CST 2013 program funds to 2014 budgets, and to create CST General Funding Pool. For program year 2015, NYSERDA is authorized to allocate unencumbered 2014 CST budget funds to the CST General Funding Pool, with NYSERDA to file a compliance report in lieu of a petition.

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03-E-0188: Renewable Portfolio Standard - Home Page updated: 07/03/2014 10:51:46 AM

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