New York DPS Staff File Proposal For ESCO Compliance With Phase 3 Of Clean Energy Standard
Staff of the New York DPS and Staff of NYSERDA filed a Phase 3 Implementation Plan Proposal for the Clean Energy Standard, including proposals related to LSE (including ESCO) compliance
Under the proposal for 2019 and future compliance years until otherwise modified in a future implementation plan, NYSERDA proposes no further changes to the REC sale method detailed for 2018 in the Final Phase 2 Implementation Plan. However, NYSERDA seeks comment on changes for subsequent years to open up the market as volumes become significant and the potential for divergence of market Tier 1 REC prices from NYSERDA procurement costs increases the risk that NYSERDA’s current approach could have unintended consequences (such as NYSERDA being unable to clear its inventory, increased reliance on the utility backstop, etc.).
As in 2018, only RES-obligated LSEs may purchase RECs from NYSERDA for the 2019 and future compliance years until otherwise modified in a future implementation plan
Regarding alternative compliance payments, for the 2019 compliance period and until otherwise modified in a future implementation plan, the method of setting the ACP level is proposed to continue using the process adopted in the Final Phase 2 Implementation Plan for 2018, consistent with the approach to NYSERDA REC sale timing and frequency. This approach will continue to provide the marketplace with a transitional level of certainty while providing the ability to consider evolving RES design and market conditions, the Staffs said. By December 1, 2018, NYSERDA will file the 2019 ACP price in a filing with the Commission and post the ACP price on its website. The 2019 ACP will be calculated in consultation with Staff, based on the projected weighted average cost per MWh that NYSERDA expects to pay to acquire the Tier 1 RECs expected to be offered in 2019 (the 2019 Tier 1 REC sale price), plus any Commission-approved administrative adder, (if applicable), plus 10 percent. The ACP will remain constant throughout 2019 and will be paid directly to NYSERDA.
Regarding banking, for 2019 and until otherwise modified in a future implementation plan, Tier 1 REC banking rules are proposed to largely remain unchanged from the 2018 banking rules as outlined in the Final Phase 2 Implementation Plan. NYSERDA will continue to be authorized to bank Tier 1 RECs for two subsequent compliance periods. Obligated LSEs may use banked NYGATS certificates associated with a given Vintage in two subsequent Vintage compliance periods (banked certificates), subject to the following limitations:
1. Only obligated LSEs, and no other market participants, may bank excess certificates above the current year’s Tier 1 RES LSE obligation towards future RES LSE obligation compliance. Such banked certificates may not be transferred.
2. The obligated LSE banking surplus certificates is in compliance with the RES for all previous compliance periods.
3. Banked certificates are in excess of the number of certificates needed in the compliance period in which they were generated, and such excess NYGATS certificates have not previously been used for compliance with the RES and have not been otherwise transferred to other parties.
4. Non-VDER Tier 1 NYGATS certificates banked in a compliance year may not exceed sixty percent (60%) of the LSE’s compliance obligation for that year.