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 target of 25% by 2013, but was expanded in January 2010 to 30% by 2015 by order of the PSC. Of this 30%, approximately 19.3% of the target will be derived from existing (2004) renewable energy facilities and one percent (1%) of the target is expected to be met through voluntary green power sales.* The remainder will be derived from new, eligible resources centrally procured by the New York State Energy Research and Development Authority (NYSERDA).
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 and the Long Island Power Authority do not fall under the jurisdiction of this program, but have been encouraged by the PSC to adopt similar programs.
The RPS program identifies two tiers of eligible resources -- a Main Tier (98% of incremental renewables generation) and a Customer-Sited Tier (2%). 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, or standard offer contracts. 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.**
The resources eligible for the Customer-Sited Tier include fuel cells, photovoltaics, wind turbines, and methane digesters. Customer-Sited Tier 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. The PSC initially set overall funding for the Customer-Sited Tier at $45 million through 2009. Of this sum, 30.7% was allocated to support PV, 10% to support small wind, 24.9% to support fuel cells, 24.4% to support anaerobic digestion, and 10% to be used for discretionary purposes. In February, 2007, NYSERDA and the Department of Public Service issued the Customer-Sited Tier
implementation plan. The funding breakdown has changed considerably over time, with the PV and anaerobic digester portions experiencing demand far in excess of their original funding allocations. The most recent figures (See
June 2009 PSC Order) put total funding through 2009 at $107.6 million, with roughly 70% devoted to PV. The January 2010 PSC order revising the broader renewables target does not address specific changes to the CST, although it does state that further orders resolving CST and geographic imbalance issues are anticipated in the future.
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).
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 ETS). Furthermore, the PSC has stated that it supports a regionally compatible tracking system that can fully support the state's environmental disclosure program.
In 2009 the PSC began conducting 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. According to the
RPS Mid-Course Report issued in October 2009, the PSC expects that the first three rounds of Main Tier procurement solicitations will generate 2.95 million MWh of renewable electricity by the end of 2009, or about 62% of the 2009 Main Tier goal. The Customer-Sited Tier is expected to be closer to the target, with expected annual energy production of 99,000 MWh from systems supported by CST incentives through 2009, compared to a 2009 target of roughly 101,000 MWh.
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here to view historical annual reports, evaluation documents, and other RPS related resources from NYSERDA, including the 2009 comprehensive RPS Evaluation Report. The evaluation report notably includes a scenario analysis describing possible changes in the energy (MWh) targets as a result of revised load forecasts, the state's energy efficiency portfolio standard (EEPS), and the revised goal of 30% renewables by 2015 that was ultimately adopted by the PSC. The EEPS scenario estimates a reduction the amount of renewable energy required to meet the 25% target by more than 50% compared to the forecast described in it the 2004 RPS Order. In the January 2010 order revising the ultimate target to 30% by 2015, the PSC notes that if expected load reductions as a result of the EEPS are accounted for, the estimated amount of incremental renewable generation needed to meet the revised target (10.4 million MWh) is only slightly higher than the original 2004 estimate (10.0 million MWh) that did not contemplate energy efficiency improvements.
*The total incremental increase in renewable energy production as a result of this law is expected to be 6.56% (see 2004 PSC Order, Appendix D, Table 1). This calculation takes into account electricity consumption forecasts, expected generation from baseline resources, and expected line losses. It does not include the 1% voluntary green power goal or the state's governmental green power purchasing goal (an additional 0.19%) under Executive Order 111. The total 2% Customer-Sited Tier contribution is calculated as a percentage of this incremental requirement.
** 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.
