Bill Text: NY A07275 | 2017-2018 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relates to maintaining the continued viability of the state's existing large-scale, renewable energy resources.

Spectrum: Strong Partisan Bill (Democrat 35-2)

Status: (Introduced) 2018-06-20 - substituted by s5549c [A07275 Detail]

Download: New_York-2017-A07275-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          7275
                               2017-2018 Regular Sessions
                   IN ASSEMBLY
                                     April 17, 2017
                                       ___________
        Introduced  by M. of A. JENNE -- read once and referred to the Committee
          on Energy
        AN ACT in relation to maintaining the continued viability of the state's
          existing large-scale renewable energy resources through the  implemen-
          tation of a tier 2 renewable energy credit
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Legislative findings and declaration. The legislature here-
     2  by finds and declares that:
     3    1. New York is a national leader in developing and implementing policy
     4  to promote the development of renewable energy resources, the growth  of
     5  which  has significantly benefited the state in numerous ways, including
     6  through reductions in pollutants  that  contribute  to  climate  change,
     7  associated  reductions in adverse impacts on public health, and substan-
     8  tial job growth in the clean energy sector.
     9    2. In 2016, more than twenty percent of  the  state's  electric  load,
    10  representing  2,354  gigawatt hours, was supplied by renewable resources
    11  such as: solar; wind; hydroelectric; biomass;  fuel  cells  and  similar
    12  resources. To further promote and incentivize the development of renewa-
    13  ble energy, the New York state public service commission recently estab-
    14  lished a clean energy standard requiring, among other things, that fifty
    15  percent  of the electric load in the state be served entirely by renewa-
    16  ble resources by the year 2030, hereinafter the 50 by 30 goal.
    17    3. A recent study shows  that  New  York's  clean  energy  sector  now
    18  employs  more than 85,000 workers at more than 7,500 business establish-
    19  ments spread out across the state, in  both  the  renewable  energy  and
    20  energy efficiency sectors. With implementation of the clean energy stan-
    21  dard,  clean  energy jobs are anticipated to grow by more than 6 percent
    22  per year or double the growth rate of the entire United  States  economy
    23  in  2016. Proper implementation of the clean energy standard will ensure
    24  that the state meets these job growth projections.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10514-01-7

        A. 7275                             2
     1    4. To promote achievement of the clean energy standard, and to  ensure
     2  the  continued job growth and other benefits attendant to a clean energy
     3  economy, New York needs to ensure that its existing large-scale  renewa-
     4  ble  energy sector is provided with adequate price signals and financial
     5  incentives  to  remain  in  operation and to sell their renewable energy
     6  attributes in New York, allowing the state to count the resources toward
     7  the 50 by 30 goal and retain the jobs  and  tax  payments  supported  by
     8  these  generators. Absent these assurances, it would be difficult if not
     9  impossible for the state to meet the recently established goal.
    10    5. New York's ability to  meet  the  clean  energy  standard  will  be
    11  hampered  if  such  existing  resources  provide  their wholesale energy
    12  products for delivery to adjacent states, some  of  which  have  enacted
    13  laws  that provide for a robust market that provides a stronger opportu-
    14  nity to sell renewable energy attributes than is currently available  in
    15  New  York. There is a real and present danger that a significant portion
    16  of New York's existing fleet of large-scale renewable  energy  resources
    17  will  participate in the programs offered by these other states and thus
    18  will not be available for consideration in terms of meeting the 50 by 30
    19  goal, and may compete with other renewable classes in the  clean  energy
    20  standard.
    21    6.  It also is of paramount importance to ensure the fuel diversity of
    22  the state's energy sector, for the purposes of providing energy  securi-
    23  ty,  system reliability and protection of consumers from potential price
    24  spikes or shortages. For this same reason, it is important for the state
    25  to take measures to ensure the continued viability and competitive posi-
    26  tion of a wide variety of large-scale renewable energy resources in  the
    27  state.
    28    7.  Accordingly, the overlying intent of this act is to provide exist-
    29  ing large-scale renewable energy resources in New York state with appro-
    30  priate financial incentives to continue operations for  the  foreseeable
    31  future.
    32    § 2. Definitions.
    33    1.  "Large-scale renewable energy resource" means an electric generat-
    34  ing facility that:
    35    (a) sells its energy in the wholesale markets operated by the New York
    36  independent system operator;
    37    (b) is deemed an eligible technology type pursuant to  appendix  A  of
    38  the  clean  energy  standard  order  as defined in subdivision 3 of this
    39  section, and in the case of hydropower, has a generating capacity  fewer
    40  than 50 megawatts;
    41    (c)  is  physically  located  within  the jurisdiction of the New York
    42  independent system operator; and
    43    (d) the associated energy is delivered in accordance with a  New  York
    44  delivery requirement as described in section 3 of this act.
    45    2.  "Eligible large-scale renewable energy resource" means an existing
    46  large-scale renewable energy resource that:
    47    (a) at the time in question is not under a contract for  the  sale  of
    48  renewable  energy  credits  with  the New York state energy research and
    49  development authority pursuant to the renewable portfolio standard  main
    50  tier or maintenance tier program or clean energy standard tier 1 program
    51  implemented by such authority;
    52    (b)  is  not  under  an existing contract for sale of renewable energy
    53  credits with a load servicing entity; and
    54    (c) is otherwise found by New York state energy research and  develop-
    55  ment  authority to meet deliverability requirements specified in section

        A. 7275                             3
     1  3 of this act, and other eligibility requirements specified in  subdivi-
     2  sion 1 of this section.
     3    3.  "Clean  energy  standard  order"  means the order adopting a clean
     4  energy standard dated August 1, 2016, and entered in case no.  15-E-0302
     5  et seq.
     6    4.  "Load  serving  entities"  means  and  includes all investor-owned
     7  distribution utilities in their capacity as commodity suppliers,  energy
     8  service companies or community choice aggregation programs not served by
     9  energy  service companies, municipal utilities under the jurisdiction of
    10  the public service commission, and  retail  customers  that  self-supply
    11  with electricity through the New York independent system operator.
    12    5.  "Renewable  energy  credit"  means a tradable, non-tangible energy
    13  commodity that represents proof that one  megawatt-hour  of  electricity
    14  was  generated from a renewable energy resource. To be eligible for sale
    15  in New York state and to meet the procurement obligations of load  serv-
    16  ing  entities,  each renewable energy credit must be registered with the
    17  New York generation attribute tracking system.
    18    6. "Tier 1" means the program designated as tier  1  pursuant  to  the
    19  clean energy standard order.
    20    7. "Tier 2 renewable energy credit" refers to a renewable energy cred-
    21  it generated by an eligible large-scale renewable energy resource pursu-
    22  ant to this act.
    23    §  3.  Deliverability.  Energy  from an eligible large-scale renewable
    24  energy resource shall be deemed to comply with the New York deliverabil-
    25  ity requirement if it is:
    26    1. delivered into a market administered by the  New  York  independent
    27  system operator for end-use in New York state;
    28    2. delivered through a wholesale meter under the control of a utility,
    29  public authority or municipal electric company such that it can be meas-
    30  ured, and such that consumption within New York state can be tracked and
    31  verified  by such entity or by the New York independent system operator;
    32  or
    33    3. delivered through a renewable energy resource dedicated  generation
    34  meter,  approved  by  and subject to independent verification by the New
    35  York state energy research and development authority, to a  customer  in
    36  New York state.
    37    § 4. Program for eligible large-scale renewable energy resources.
    38    1. Notwithstanding any other provision of law to the contrary, includ-
    39  ing but not limited to, any order, rule or regulation promulgated pursu-
    40  ant  to  the  public service law, the public authorities law, and/or the
    41  state administrative procedure act, the public  service  commission,  in
    42  consultation  with  the  New  York state energy research and development
    43  authority, shall adopt a program within 120 days of the  effective  date
    44  of this act, to provide support to eligible large-scale renewable energy
    45  resources  through  a  market  for  tier  2  renewable energy credits as
    46  defined in subdivision 5 of section 2 of this act to ensure the  contin-
    47  ued viability of eligible large-scale renewable energy resources for the
    48  purpose  of  meeting  the  state's  50  by  30  goal. In developing such
    49  program, the public service commission shall  create  an  obligation  on
    50  load servicing entities to purchase tier 2 renewable energy credits from
    51  eligible  large-scale  renewable  energy  resources  through the process
    52  described in subdivision 2 of this section:
    53    2. Tier 2 renewable energy credits. (a)  Annual  targets.  The  public
    54  service  commission  shall  provide  annual targets and mandates for the
    55  acquisition of tier 2 renewable energy credits by load  servicing  enti-
    56  ties  for  the  years  2017 to 2030 that ensure market demand for tier 2

        A. 7275                             4
     1  renewable energy credits for all resources that become  eligible  large-
     2  scale  renewable  energy resources during that timeframe for purposes of
     3  achieving the 50 by 30 goal. The targets to be established by the public
     4  service  commission  should  reflect  the  quantity  of renewable energy
     5  generation that is serving  total  electric  load  in  New  York  state,
     6  excluding  generation  from facilities owned by the New York state power
     7  and excluding hydropower from generators with a capacity greater than 50
     8  megawatts.
     9    (b) Credit obligations of load serving  entities.  Each  load  serving
    10  entity  shall  be responsible for acquiring a defined quantity of tier 2
    11  renewable energy credits based upon the total tier 2 load serving entity
    12  obligation target allocated to all load serving entities proportional to
    13  the load each serves; i.e., determined by multiplying each load  serving
    14  entity's  actual load for the prior year by the percentage gigawatt hour
    15  target for that year. The New York state energy research and development
    16  authority shall publish each load serving entity's annual obligation for
    17  each annual compliance period on its website  or  by  other  appropriate
    18  means by December first of each year.
    19    (c)  Price. Every December first preceding the annual compliance peri-
    20  od, the public service commission shall establish  a  tier  2  renewable
    21  energy credit price to be set at 75 percent of the weighted average cost
    22  per renewable energy credits that the New York state energy research and
    23  development  authority  paid  to  acquire  renewable energy credits from
    24  resources under the clean energy standard tier 1 program in the  preced-
    25  ing calendar year.
    26    (d)  Financial  hardship.  Those eligible large-scale renewable energy
    27  resources for which the tier 2 renewable energy credit price is insuffi-
    28  cient may seek additional financial assistance from the New  York  state
    29  energy  research  and  development  authority through contracts having a
    30  minimum duration of ten years for the purpose of ensuring the  continued
    31  viability and availability of such resources toward meeting the 50 by 30
    32  goal. The New York state energy research and development authority shall
    33  apply  the  following  criteria  in  determining the eligibility of such
    34  eligible large-scale renewable energy resources to receive  such  finan-
    35  cial  assistance,  which  shall be paid as an increment above the tier 2
    36  renewable energy credit price increment determined pursuant to  subdivi-
    37  sion (c) of this section.
    38    i. A showing of financial hardship.
    39    ii. The basis for and reasonableness of expected operating and capital
    40  costs.  This evaluation may include, among other things, a comparison to
    41  prior year's costs and a comparison to costs of like generation.
    42    iii. The existence of any other cash sources available to  the  large-
    43  scale  renewable  energy resource, such as: (A) tax benefits, (B) subsi-
    44  dies, (C) contracts, and  (D)  other  sources,  including  restructuring
    45  financing.
    46    iv.  Whether  market rules are increasing the costs of the large-scale
    47  renewable energy resource and, if so, whether any steps can be taken  to
    48  reduce such costs.
    49    v.  Whether  the large-scale renewable energy resource's real property
    50  tax assessment is consistent with the assessments imposed  in  similarly
    51  situated facilities elsewhere, and if not, what action has been taken to
    52  address such assessment.
    53    vi.  Whether  the large-scale renewable energy resource is required to
    54  operate as part of a package of assets that is financially viable  as  a
    55  whole.

        A. 7275                             5
     1    vii.  Whether  the  large-scale  renewable  energy  resource generates
     2  enough revenue, based on expected output, to cover its  operating  costs
     3  and enjoy a reasonable return.
     4    viii. Whether the generation facility generates enough revenue to make
     5  necessary capital improvements.
     6    ix. Whether the large-scale renewable energy resource generates enough
     7  revenue to cover its fixed costs, including: (A) debt service, (B) prop-
     8  erty taxes, (C) security costs, and (D) other costs.
     9    x.  Whether the large-scale renewable energy resource has attempted to
    10  make use of other renewable programs available to it, such as  voluntary
    11  green markets.
    12    xi. And, the regional economic importance of the resource. This evalu-
    13  ation may include job creation and retention, regional spending for fuel
    14  and  other  goods  and  services,  contribution  to local tax base, fuel
    15  diversity, greenhouse  gas  reduction,  enhanced  forest  health,  flood
    16  control, municipal water supply, ecological stewardship and other non-e-
    17  conomic factors on a region-specific basis.
    18    Any contract entered into with an eligible large-scale renewable ener-
    19  gy  resource  pursuant  to  this  subdivision shall include a reasonable
    20  return, and take the form of a fixed  price  increment  to  the  tier  2
    21  renewable  energy  credit  price  that the generator is receiving from a
    22  load serving entity or a financial contract for  differences  to  adjust
    23  based  on  fluctuations in the tier 2 renewable energy credit price. The
    24  totality of all increments provided to resources pursuant to this subdi-
    25  vision shall be recovered from delivery customers in the same manner  as
    26  in the RPS program maintenance tier.
    27    (e)  Procedures.  To  implement  the  tier  2  renewable energy credit
    28  program, the public service commission shall also adopt, within 120 days
    29  of the effective date of this act, the following procedures and  related
    30  requirements.
    31    i. The public service commission shall establish procedures consistent
    32  with  the  procedures  developed  under the clean energy standard tier 1
    33  program to determine the eligibility  of  large-scale  renewable  energy
    34  resources  to  participate  in the program adopted pursuant to this act,
    35  and to certify those eligible large-scale  renewable  energy  resources.
    36  All  resources  that  have  previously  been found by the New York state
    37  energy research and development authority to meet  the  eligibility  and
    38  deliverability  requirements  in  force  under the clean energy standard
    39  programs shall be deemed to meet eligibility and deliverability require-
    40  ments of this act.
    41    ii. The public service commission, with the assistance of the New York
    42  state energy research and development authority, shall develop an  equi-
    43  table  process  by  which load serving entities acquire tier 2 renewable
    44  energy credits from eligible  large-scale  renewable  energy  resources,
    45  which  may include the designation of the New York state energy research
    46  and development authority as the central procurement entity for  tier  2
    47  renewable energy credits, whereby the New York state energy research and
    48  development authority would ensure the registration of all tier 2 renew-
    49  able energy credits from generators in the New York generation attribute
    50  tracking system, purchase the required targeted amount of tier 2 renewa-
    51  ble  energy  credits, and re-sell the tier 2 renewable energy credits to
    52  load serving entities on an annual basis in order  to  facilitate  their
    53  collective efficient compliance. The public service commission, with the
    54  assistance of the New York state energy research and development author-
    55  ity,  shall also develop and implement protocols in the event that there
    56  is an oversupply or undersupply  of  tier  2  renewable  energy  credits

        A. 7275                             6
     1  offered  for  sale, relative to the tier 2 renewable energy credit obli-
     2  gation applied to the load serving entities, provided that the protocols
     3  should recognize and prioritize the realization of economic benefits  in
     4  New York from generators located in New York.
     5    iii.  The  public service commission shall develop procedures by which
     6  eligible large-scale renewable energy  resources  may  obtain  contracts
     7  from the New York state energy research and development authority pursu-
     8  ant  to  subdivision (d) of this section in accordance with the require-
     9  ments of the state administrative procedure act. Such procedures  shall,
    10  on a case-by-case basis, authorize eligible large-scale renewable energy
    11  resources  to  petition  the  public service commission for a finding of
    12  financial hardship, which finding shall be based  upon  a  determination
    13  that  the  established  tier  2  renewable  energy credits determined in
    14  accordance with subdivision (c)  of  this  section  is  insufficient  to
    15  ensure  the  viability  of  the  resource. The public service commission
    16  shall make a final decision with respect to  such  contract  within  120
    17  days after a hardship petition is received.
    18    iv.  Each  load  serving  entity shall demonstrate compliance with the
    19  requirements of this section through an annual compliance filing  pursu-
    20  ant  to  a  process established by the public service commission that is
    21  consistent with the compliance filing requirements established  pursuant
    22  to the tier 1 program.
    23    § 5. This act shall take effect immediately.
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