|SAME AS||SAME AS A04294|
|COSPNSR||ADDABBO, BIAGGI, CARLUCCI, COMRIE, FUNKE, GAUGHRAN, GOUNARDES, HARCKHAM, HOYLMAN, KAPLAN, KENNEDY, MARTINEZ, MAY, METZGER, SAVINO, SERINO, SERRANO, SKOUFIS, STAVISKY, THOMAS|
|Relates to maintaining the continued viability of the state's existing large-scale, renewable energy resources.|
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STATE OF NEW YORK ________________________________________________________________________ 23 2019-2020 Regular Sessions IN SENATE (Prefiled) January 9, 2019 ___________ Introduced by Sen. PARKER -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Telecommuni- cations AN ACT in relation to maintaining the continued viability of the state's existing large-scale, renewable energy resources The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Legislative findings and intent. The legislature hereby 2 finds and determines: 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 - solar, wind, hydroelectric, biomass, fuel cells and similar resources. 12 To further promote and incentivize the development of renewable energy, 13 the New York state public service commission recently established a 14 clean energy standard requiring, among other things, that fifty percent 15 of the electric load in the state be served entirely by renewable 16 resources by the year 2030 (i.e., 50 by 30 target). 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 six percent 22 per year or double the growth rate of the entire United States economy EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05544-01-9S. 23 2 1 in 2016. Proper implementation of the clean energy standard will ensure 2 that the state meets these job growth projections. 3 4. To promote achievement of the clean energy standard, and to ensure 4 the continued job growth and other benefits attendant to a clean energy 5 economy, New York needs to assure that its existing large-scale, renewa- 6 ble energy sector is provided with adequate price signals and financial 7 incentives to remain in operation and to sell their renewable energy 8 attributes in New York, allowing the state to count the resources toward 9 the 50 by 30 target and retain the jobs and tax payments supported by 10 these generators. Absent these assurances, it would be difficult if not 11 impossible for the state to meet the recently established target. 12 5. New York's ability to meet the clean energy standard will be 13 hampered if such existing resources provide their wholesale energy 14 products for delivery to adjacent states, some of which have enacted 15 laws that provide for a robust market that provides a stronger opportu- 16 nity to sell renewable energy attributes than is currently available in 17 New York. There is a real and present danger that a significant portion 18 of New York's existing fleet of large-scale, renewable energy resources 19 will participate in the programs offered by these other states and thus 20 will not be available for consideration in terms of meeting the 50 by 30 21 target, and compete effectively with other renewable classes in the 22 clean energy standard. 23 6. It also is of paramount importance to ensure the fuel diversity of 24 the state's energy sector for the purposes of providing energy security, 25 system reliability and protection of consumers from potential price 26 spikes or shortages. For this same reason, it is important for the state 27 to take measures to ensure the continued viability and competitive posi- 28 tion of a wide variety of large-scale, renewable energy resources in the 29 state. 30 7. Accordingly, the overlying intent of this act is to provide exist- 31 ing large-scale, renewable energy resources in New York state with 32 appropriate financial incentives to continue operations for the foresee- 33 able future. 34 § 2. Definitions. 1. "Large-scale, renewable energy resource" means 35 an electric generating facility that: (a) sells its energy within the 36 New York control area with a generating capacity of 25 kilowatts or 37 more; (b) is deemed an eligible technology type pursuant to Appendix A 38 of the "Order Adopting a Clean Energy Standard" and, in the case of 39 hydropower, has a generating capacity less than 50 megawatts; (c) is 40 physically located within the jurisdiction of the New York independent 41 system operator; and (d) the associated energy is delivered in accord- 42 ance with a New York delivery requirement as described in section three 43 of this act. 44 2. "Eligible large-scale, renewable energy resource" means an existing 45 large-scale, renewable energy resource that: (a) at the time in question 46 is not under a contract for the sale of renewable energy credits with 47 the New York state energy research and development authority pursuant to 48 the renewable portfolio standard main tier, maintenance tier or custom- 49 sited tier program or clean energy standard tier 1 program implemented 50 by such authority; (b) is not under an existing contract for sale of 51 renewable energy credits with a load serving entity; and (c) is other- 52 wise found by the New York state energy research and development author- 53 ity to meet deliverability requirements specified in section three of 54 this act, and other eligibility requirements specified in subdivision 55 one of this section.S. 23 3 1 3. "Qualified independent party" shall have the meaning given to the 2 term in the New York Generation Attribute Tracking System (NYGATS) oper- 3 ating rules promulgated by the New York state energy research and devel- 4 opment authority. 5 4. "Load serving entity" or "load serving entities" means and includes 6 all investor-owned distribution utilities (in their capacity as commod- 7 ity suppliers), energy service companies, community choice aggregation 8 programs not served by energy service companies, municipal utilities 9 under the jurisdiction of the public service commission, and retail 10 customers that self-supply with electricity through the New York inde- 11 pendent system operator. 12 5. "Renewable energy credit" means a tradable, non-tangible energy 13 commodity that represents proof that 1 megawatt-hour (MWh) of electric- 14 ity was generated from a renewable energy resource. To be eligible for 15 sale in New York state and to meet the procurement obligations of load 16 serving entities, each renewable energy credit must be registered with 17 the New York generation attribute tracking systems. 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. 22 8. "Order adopting a clean energy standard" means the public service 23 commission order dated August 1, 2016, and entered in case number 15-E- 24 0302 et seq. 25 § 3. Deliverability. Energy from an eligible large-scale, renewable 26 energy resource shall be deemed to comply with the New York deliverabil- 27 ity requirement if either it is: (a) delivered into a market adminis- 28 tered by the New York independent system operator for end-use in New 29 York state; (b) delivered through a wholesale meter under the control of 30 a utility, public authority or municipal electric company such that it 31 can be measured, and such that consumption within New York state can be 32 tracked and verified by such entity or by the New York independent 33 system operator; or (c) delivered to a customer in New York state, where 34 such delivery shall be subject to independent verification by the New 35 York state energy research and development authority or a qualified 36 independent party. 37 § 4. Program for eligible large-scale, renewable energy resources. 38 Notwithstanding any other provision of law to the contrary, including, 39 but not limited to, any order, rule or regulation promulgated pursuant 40 to the public service law, the public authorities law, and/or the state 41 administrative procedure act, the public service commission, in consul- 42 tation with the New York state energy research and development authori- 43 ty, shall adopt a program within 120 days of the effective date of this 44 act, to provide support to and for eligible large-scale, renewable ener- 45 gy resources through a market for tier 2 renewable energy credits as 46 defined herein to ensure the continued viability of eligible large-sca- 47 le, renewable energy resources for the purpose of meeting the state's 50 48 by 30 target. In developing such program, the public service commission 49 shall create an obligation on load serving entities to purchase tier 2 50 renewable energy credits from eligible large-scale, renewable energy 51 resources through a process and requirements as fully described below: 52 1. Annual targets for tier 2 renewable energy credits. The public 53 service commission shall provide annual targets and mandates for the 54 acquisition of tier 2 renewable energy credits by load serving entities 55 for the years 2019 to 2030 that ensures market demand for tier 2 renewa- 56 ble energy credits for all resources that become eligible large-scale,S. 23 4 1 renewable energy resources during such timeframe for purposes of achiev- 2 ing the 50 by 30 target. The targets to be established by the public 3 service commission should reflect the quantity of renewable energy 4 generation that is serving total electric load in New York state, 5 excluding generation from facilities owned by the power authority of the 6 state of New York and excluding hydropower from generators with a capac- 7 ity greater than 50 megawatts. 8 2. Load serving entities' tier 2 renewable energy credit obligation. 9 Each load serving entity shall be responsible for acquiring a defined 10 quantity of tier 2 renewable energy credits based upon the total tier 2 11 load serving entity obligation target allocated to all load serving 12 entities proportional to the load each serves; i.e., determined by 13 multiplying each load serving entity's actual load for the prior year by 14 the percentage GWh target for that year. The New York state energy 15 research and development authority shall publish each load serving enti- 16 ty's annual obligation for each annual compliance period on its website 17 or by other appropriate means by December 1 of the year prior to the 18 year such published annual obligation shall apply. 19 3. Tier 2 renewable energy credit price. By each December 1 prior to 20 the annual compliance period, the public service commission shall estab- 21 lish a tier 2 renewable energy credit price to be set at 75 percent of 22 the weighted average cost per renewable energy credit that the New York 23 state energy research and development authority paid to acquire renewa- 24 ble energy credits from resources under the clean energy standard tier 1 25 program in the prior calendar year. 26 4. 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 target. The New York state energy research and development authority 33 shall apply the following criteria in determining the eligibility of 34 such eligible large-scale, renewable energy resources to receive such 35 financial assistance, which shall be paid as an increment above the tier 36 2 renewable energy credit price determined pursuant to subdivision three 37 of this section: 38 (a) A showing of financial hardship; 39 (b) The basis for and reasonableness of expected operating and capital 40 costs. This evaluation may include, among other things, a comparison to 41 prior years' costs and a comparison to costs of like generation; 42 (c) The existence of any other cash sources available to the large- 43 scale, renewable energy resource, such as: (i) tax benefits; (ii) subsi- 44 dies; (iii) contracts; and (iv) other sources, including restructuring 45 financing; 46 (d) 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 (e) 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 (f) 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;S. 23 5 1 (g) 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 (h) Whether the generation facility generates enough revenue to make 5 necessary capital improvements; 6 (i) Whether the large-scale, renewable energy resource generates 7 enough revenue to cover its fixed costs, including: (i) debt service; 8 (ii) property taxes; (iii) security costs; and (iv) other costs; 9 (j) Whether the large-scale, renewable energy resource has attempted 10 to make use of other renewables programs available to it, such as volun- 11 tary green markets; and 12 (k) The regional economic importance of the resource. This evaluation 13 may include job creation and retention, regional spending for fuel and 14 other goods and services, contribution to local tax base, fuel diversi- 15 ty, greenhouse gas reduction, enhanced forest health, flood control, 16 municipal water supply, ecological stewardship and other non-economic 17 factors on a region-specific basis. Any contract entered into with an 18 eligible large-scale, renewable energy resource pursuant to this subdi- 19 vision shall include a reasonable return, and take the form of a fixed 20 price increment to the tier 2 renewable energy credit price that the 21 generator is receiving from a load serving entity or a financial 22 contract for differences to adjust based on fluctuations in the tier 2 23 renewable energy credit price. The totality of all increments provided 24 to resources pursuant to this subdivision shall be recovered from deliv- 25 ery customers in the same manner as in the renewable portfolio standard 26 program maintenance tier. 27 5. 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 (a) The public service commission shall establish procedures consist- 32 ent 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 and 35 to certify such eligible large-scale, renewable energy resources. All 36 resources that have previously been found by the New York state energy 37 research and development authority to meet the eligibility and delivera- 38 bility requirements in force under the renewable portfolio standard or 39 clean energy standard programs shall be deemed to meet eligibility and 40 deliverability requirements of this act. 41 (b) 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 resources from generators in New York generation attribute 50 tracking systems, purchase the required targeted amount of tier 2 renew- 51 able 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 creditsS. 23 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 (c) 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 under 8 subdivision four of this section in accordance with the requirements of 9 the state administrative procedure act. Such procedures shall, on a 10 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 three of this section are 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 (d) 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.