NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1540A
SPONSOR: Jenne TITLE OF BILL: An act to amend the public service law, in relation to
long-term contracts for renewable energy
PURPOSE:
The bill would direct the state Public Service Commission to prioritize
long term contracts in selecting energy, capacity, and renewable energy
credits. The commission shall procure, at a minimum, two percent of the
state's annual retail electricity load by 2016, four percent by 2018,
and six percent by 2020, through long-term contracts for energy, capaci-
ty, and renewable energy credits with eligible resources.
SUMMARY OF PROVISIONS:
Section One: Amends the public service law by adding section 66-p
setting out definitions, commission authority, the priority of long-term
contracts, contract terms, defining the competitive solicitation proc-
ess, disposition of resources, cost recovery, contract payments, custom-
er benefits, and rules and regulations.
Section Two: Effective date.
JUSTIFICATION:
Long-term contracts will maximize financial benefits to electricity
customers provide a hedge against volatile fossil fuel prices, and
create or maintain property taxes and employment in the state of New
York.
LEGISLATIVE HISTORY:
A8065 of 2016 - referred to Energy.
A1540 of 2017 - referred to Energy.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
1540--A
2017-2018 Regular Sessions
IN ASSEMBLY
January 12, 2017
___________
Introduced by M. of A. JENNE, FAHY, HUNTER -- Multi-Sponsored by -- M.
of A. MAGEE -- read once and referred to the Committee on Energy --
recommitted to the Committee on Energy in accordance with Assembly
Rule 3, sec. 2 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the public service law, in relation to long-term
contracts for renewable energy
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The public service law is amended by adding a new section
2 66-p to read as follows:
3 § 66-p. Long-term contracts for renewable energy. 1. Definitions. As
4 used in this section the following terms shall have the following mean-
5 ings:
6 (a) "Eligible resource" means a source of electrical generation that:
7 (i) generates power that is within or delivered to the control region
8 of the New York independent system operator;
9 (ii) is a renewable energy resource; and
10 (iii) does not currently have a long-term contract with the state.
11 (b) "Renewable energy resource" shall have the same meaning as set
12 forth in subdivision twelve of section 1-103 of the energy law.
13 (c) "Renewable energy credit" means a tradable instrument that repres-
14 ents an amount of electricity generated from eligible resources or
15 renewable energy resources.
16 (d) "Long-term contract" means a contract with an electric and gas
17 corporation for a period of up to twenty years.
18 2. Commission authority. The commission may direct electric and gas
19 corporations to enter into long-term contracts for energy, capacity and
20 renewable energy credits with eligible resources. At a minimum, the
21 commission shall procure two percent of the state's annual retail elec-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02548-03-8
A. 1540--A 2
1 tricity load by two thousand nineteen, four percent by two thousand
2 twenty-one, and six percent by two thousand twenty-three.
3 3. Priority of long-term contracts. In selecting energy, capacity and
4 renewable energy credits for contracting pursuant to subdivision two of
5 this section, the commission shall prioritize long-term contracts with
6 eligible resources that the commission determines will maximize finan-
7 cial benefits to electricity customers, provide a hedge against volatile
8 fossil fuel prices, and create or maintain property taxes and employment
9 in the state of New York.
10 4. Contract term. A contract entered into pursuant to this section may
11 not be for a term of more than twenty years, unless the commission finds
12 a contract for a longer term would provide significantly greater rate-
13 payer benefits.
14 5. Competitive solicitation process and contract negotiation. The
15 commission shall establish a schedule for annual competitive solicita-
16 tions for long-term contracts pursuant to this section. This schedule
17 must include a timeline for negotiation, commission decision making and
18 contract closing.
19 6. Disposition of resources. An electric and gas corporation shall
20 sell energy, capacity or other products purchased pursuant to this
21 section or take other action relative to such energy, capacity or other
22 products as directed by the commission.
23 7. Cost recovery. The commission shall ensure that all costs and
24 direct financial benefits associated with contracts entered into under
25 this section are allocated to ratepayers. A price differential existing
26 at any time during the term of the contract between the contract price
27 and the prevailing market price at which the energy, capacity and renew-
28 able energy credits are sold or any gains or losses derived from
29 contracts for differences must be reflected in the amounts charged to
30 ratepayers and may not be considered imprudent.
31 8. Contract payments. Long-term contracts entered into pursuant to
32 this section must provide that payments will be made only after
33 contracted amounts of energy, capacity or other products have been
34 provided.
35 9. Customer benefits. The commissioner may direct electric and gas
36 corporations to enter into contracts under this section only as agents
37 for their customers. The commission shall adopt rules to ensure that to
38 the extent the benefits to ratepayers of a long-term contract are
39 projected to occur in the later years of the contract term, adequate
40 financial security is in place so that it is reasonably likely ratepay-
41 ers will obtain the projected benefits of the long-term contract.
42 10. Rules and regulations. The commission shall adopt rules and regu-
43 lations to implement this section. In adopting rules and regulations,
44 the commission shall consider the financial implications of this section
45 on electric and gas corporations.
46 § 2. This act shall take effect immediately.
