Creates renewable energy credits for retail electric providers, the New York power authority and the Long Island power authority

Summary of provisions

This bill amends the public service law by adding a new section 66-M. The public authorities law is amending by adding a new subdivision 17 to section 1005, and renumbers sections 1020-hh, 1020-ii, and 1020-jj, as renumbered by chapter 433 of the laws of 2009, as sections 1020-ii, 1020-jj, and 1020kk, respectively, and adds a new section 1020-hh.

Justification

New York State has the ability and the obligation to lead the country in the development and use of renewable sources of energy. In order to achieve that goal, the state must create a mechanism which overcomes the largest single impediment to the growth of renewable energy in New York. That obstacle is the risk inherent in investing in these technologies.

By their nature, renewable energy projects typically have higher initial costs and offer uncertain long-term returns on investment. Individuals and companies who are interested in developing and producing renewable energy lack certainty on several issues. There is no guarantee that the power they produce will be integrated into the system, no guarantee that all of the energy they produce will be purchased, and no guarantee of the price they will receive for their energy. These uncertainties translate into large risk for potential renewable energy producers and investors. It is this risk that has served as the largest single deterrent to substantial investment in renewable energy in New York State.

This bill, the New York Renewable Energy Development and Jobs Act of 2010, requires all retail electric suppliers in New York, including utilities, public authorities, and energy service companies, to incrementally increase the percentage of renewable energy transmitted through their systems every year. These entities will be required to purchase Renewable Energy Credits (RECs) to fulfill these statutorily set targets.

A REC is defined as the environmental attributes associated with one mega-watt hour of qualified renewable energy generation. Renewable energy generators in New York will be required to apply to the New York State Energy Research and Development Authority (NYSERDA) to certify the amount of renewable power they are able to produce. Currently, the New York State Independent Systems Operator (NYISO) monitors the wholesale market for electricity. The NYISO is the command center for New York's power and can verify that the power the generator is applying to have certified by NYSERDA was in fact produced. NYSERDA will be required to verify with the NYISO that the energy a generator is applying to have certified as a REC was produced. Once this has been verified, NYSERDA will issue the generator renewable energy credits in the amount proportional to the power produced.

This legislation requires NYSERDA to establish a tracking system for RECs. Each REC will have an electronic tag or certificate number assigned to it for the purposes of tracking. NYSERDA will then monitor the movement of each REC as they are traded, bought, or sold.

In order to fulfill the new obligations established by this bill, each utility, energy service company, and authority will purchase a certain number of RECs via long term contracts which will be established for minimum of 15 years. NYSERDA will track the movement of RECs through these sales. At the end of each calendar year, utilities and energy services companies will submit reports to the Public Service Commission (PSC) to verify the amount of RECs they purchased toward their annual obligations. If an obligation is not met, a utility or energy service company will be required to pay an alternative compliance payment at a rate to be determined by the PSC. The public authorities (the New York Power Authority and the Long Island Power Authority) will be required to submit similar reports to the Independent Authorities Budget Office and pay a similar alternative compliance payment. All monies collected via alternative compliance payments will be transferred to NYSERDA for the purposes of funding renewable energy programs and initiatives.

This system is designed to provide the long term stability and risk reduction that renewable energy generators and investors need to invest in renewable energy in New York State. There will now be a guaranteed market for renewable generators to compete in, which will increase at a set rate every year. Those renewable energy producers who have their REC's purchased will be guaranteed long term contracts. The generators will also know how much of their power will be purchased and at what price.

The New York Renewable Energy Development and Jobs Act of20l0 will reduce our country's dependence on foreign oil, make our energy system less vulnerable to attack, reduce carbon emissions and mitigate climate change, provide reliable energy, and ultimately create tens of thousands of jobs in New York State's clean energy jobs sector.

Legislative history

This is a new bill.

Fiscal implications

EFFECTIVE DATE: This act shall take effect immediately.