New York

The New York Public Service Commission (PSC) adopted a renewable portfolio standard (RPS) in September 2004 and issued implementation rules in April 2005. As originally designed, New York's RPS had a renewables target of 25% of state electricity consumption by 2013, but was expanded in January 2010 to 30% by 2015 by order of the PSC. Of this 30%, approximately 20.7% of the target will be derived from existing renewable energy facilities and one percent (1%) of the target is expected to be met through voluntary green power sales in 2015.*

The remainder will be derived from new, eligible resources centrally procured by the New York State Energy Research and Development Authority (NYSERDA). Eligible new renewable resources fall into two tiers -- a Main Tier (roughly 91.56% of incremental renewables generation) and a Customer-Sited Tier (roughly 8.44%). Under the original standard, the CST was set at 2% of the incremental renewable generation required to meet the standard, but was expanded in April 2010 as part of the expansion of the RPS from 25% by 2013 to 30% by 2015.

NYSERDA manages an RPS fund gathered through a surcharge on each kilowatt-hour sold by the state’s investor-owned utilities. The RPS surcharge is separate from and in addition to the state system benefits charge (SBC). Customers exempt from contributing to the SBC are also exempt from the RPS charge. Municipal utilities, the New York Power Authority (NYPA) and the Long Island Power Authority (LIPA) do not fall under the jurisdiction of this program, but have been encouraged by the PSC to adopt similar programs. LIPA has adopted a renewable energy goal equivalent to the state target.

Resources eligible for the Main Tier include methane digesters and other forms of biomass, liquid biofuels, fuel cells, hydroelectric power, photovoltaics (PV), ocean power, tidal power, and wind power. NYSERDA can procure Main Tier resources through auction, requests for proposals (RFPs), or standard offer contracts. Past procurements have taken the form of competitive RFPs for renewable energy attributes associated with eligible generation. NYSERDA purchases these attributes through contracts of varying lengths from energy producers. While the Main Tier seeks to foster the development of additional renewable resources in New York, existing renewable energy facilities will also be eligible if they began operation on or after January 1, 2003. Certain existing hydroelectric, wind turbine and biomass direct combustion facilities built prior to January 1, 2003, may also be eligible if they demonstrate a need for financial support.**

As circumstances have evolved the PSC has also issued numerous orders affecting a variety of different areas of the Main Tier. Most recently, in December 2010 three orders were issued that, in summary: (1) allow, with limitations, biomass sourced from mixed demolition debris to be considered a qualified biomass resource; (2) allow NYSERDA to issue solicitations for Main Tier projects at least once a year without an authorizing order from the PSC; and (3) allow in-state, behind-the-meter projects to qualify for Main Tier solicitations, subject to NYSERDA measurement and verification requirements. The full orders are available in Case 03-E-0188 at the program web site above.

The resources eligible for the Customer-Sited Tier (CST) are fuel cells, photovoltaics, solar hot water, wind turbines, and methane digesters. Solar hot water, as an alternative to electric hot water heating, was added as an eligible CST technology by the April 2010 PSC order setting terms for the CST through 2015. CST systems are generally limited to the size of the load at the customer's meter. The RPS supports incentive programs that previously were supported by the state's SBC. In August 2011 the PSC issued an order declining a petition to make elevator regenerative drives an eligible CST technology.

The PSC initially set overall funding for the Customer-Sited Tier at $45 million through 2009 with specific funding allocations for different technologies (see CST Operating Plan 2006-2009). Due to market demand the level of funding and the funding breakdown changed considerably over time, with the PV and anaerobic digester portions experiencing demand far in excess of their original funding allocations. Subsequent additions (see June 2009 PSC Order) put total funding through 2009 at $107.6 million (including administration costs), with roughly 70% devoted to PV. A subsequent February 2010 PSC Order authorized an additional $21 million in interim funding to allow NYSERDA to continue the CST program through June 2010.

The CST was reauthorized and expanded in April 2010 as part of the larger expansion of the RPS to 30% by 2015. The revision allocated additional funding totaling $279 million for CST programs similar to those supported by the original CST program. However, the order also provided for the creation of a separate CST program designed to achieve a greater geographic balance in renewable energy development (the "Geographic Balancing program") This program component will offer a combination of capacity based and performance incentives through periodic competitive solicitations to PV, anaerobic digesters, fuel cells, and combined heat and power (CHP) systems of 50 kilowatts (kW) or larger. A total of $150 million was originally authorized for this program -- $30 million annually from 2011 through 2015 -- broken down by NYISO zone.

In April 2012 the PSC issued two separate orders affecting the funding and operation of the CST.  The PSC's April 20, 2012 Order authorized the reallocation of $17.6 million in unencumbered 2011 funds to the 2012 small PV incentive program and a further $1.5 million to the 2012 small wind incentive program.  A more far reaching order was issued several days later in response to the recently unveiled NY-Sun Initiative, which sets a goal of quadrupling 2011 annual PV capacity installation within the state by 2013. The PSC's April 24, 2012 Order provided additional funding of $13.5 million for the small PV incentive program for 2013 program year, $36.4 million to the Geographic Balancing program for the 2012 program year, and $40.5 million to the Geographic Balancing program for the 2013 program year. It should be noted that the order does not establish an equivalent increase in the overall CST program target, though NYSERDA's revised CST Operating Plan approved in June 2012 does include an increase.The PSC will consider further funding additions for the 2014 and 2015 program years as part of its scheduled review of the RPS in 2013.

To encourage the growth of the state's voluntary green-power market to meet the 1% target, Commission has adopted a set aside provision of 5% of a renewable facility's output. Accordingly, renewable generators must demonstrate that at least 5% of their output is available for voluntary green market sales outside the RPS program. (NYSERDA will pay incentives for only 95% of a project's actual monthly output up to the contract amount).

In the past the PSC has indicated that it supports a transition to a certificate-based attribute accounting system similar to other systems deployed in the market region (e.g. NEPOOL GIS and PJM GATS). Furthermore, the PSC has stated that it supports a regionally compatible tracking system that can fully support the state's environmental disclosure program. In August 2012, the state enacted A.B. 6114 requiring the development of a New York Generation Attribute Tracking System and NYSERDA is currently working to implement this requirement.

According to the 2013 RPS Performance Report, through 2012 a total of eight Main Tier procurements has resulted in contracts for expected production of 4.49 million MWh in 2015, or about 47% of the ultimate 2015 target of 9.52 million MWh. The same report indicates that through 2012 CST contracts totaling almost 288,000 MWh in 2015 were in place, equivalent to 33% of the ultimate 2015 target of roughly 878,000 MWh.*** In 2009 the PSC undertook a review of the RPS, focusing their analysis on program implementation; cost effectiveness and benefit/cost analysis; impacts on the energy system reliability and economic development; and market conditions, including impacts of the program and other factors on the development of wholesale, retail, and voluntary power markets for renewable resources. Click here to view historical annual reports, evaluation documents, and other RPS related resources from NYSERDA, including the 2009 comprehensive RPS Evaluation Report.


*The total incremental increase in renewable energy production as a result of this law is expected to be 8.09% (see April 2010 PSC Order, Appendix, Table 17). This calculation takes into account electricity consumption forecasts and expected generation from baseline resources. It does not include the 1% voluntary green power goal or the state's governmental green power purchasing goal (an additional 0.21%) under Executive Order 111. The CST targets listed above are calculated on the basis of the MWh CST goal established under the 2012-2015 Operating Plan in relation to forecast total state electric consumption (0.5764%) and as a percentage of total RPS MWh target (8.44%), which does not include LIPA's expected contribution under a self-imposed goal.

**See Appendix A of the April 2005 PSC order for a more complete listing of eligible technologies, including identification of requirements associated with the use of the technologies. Note that the PSC has made several changes to the criteria for eligible biomass technologies.

***The CST target identified in the 2013 RPS Performance Report (878,089 MWh) differs slightly from the Total CST target (729,479 MWh) listed in Table 17 of the Appendix of the April 2010 PSC Order establishing the CST through 2015. The reason for this difference is related to subsequent funding changes, primarily the creation of the NY-SUN program that will expand the amount of customer-sited solar generation built in the state. The increase in the CST is offset by a decrease in the Main Tier target, keeping the overall MWh target at the same level.