What's happening
This bill establishes requirements for New York electric providers and authorities to annually procure increasing amounts of renewable energy credits to support renewable energy generation, with compliance monitored and reported until state renewable energy goals are met.
Why it matters
Creates new financial incentives and obligations for utilities and energy providers. By mandating the annual purchase of renewable energy credits (RECs)—which increase each year—electric companies and authorities are required to steadily boost their support for renewable energy, potentially raising their costs and changing how they source electricity. This could eventually affect consumer rates and investment decisions within the energy sector.
Promotes small-scale, distributed renewable energy and local ownership. At least 25% of the required RECs must come from small, customer-sided renewable energy generation (like rooftop solar or small wind). There are specific provisions to favor systems owned by New York residents, LLCs with a majority of NY members, or NY not-for-profits—encouraging local economic development and democratization of energy generation.
Establishes a comprehensive compliance and tracking framework. The bill sets up a REC tracking system, requires regular reporting to government officials, and outlines processes for plans, waivers, and alternative compliance payments. These mechanisms aim to ensure transparency, accountability, and flexibility for providers who cannot meet targets through direct procurement.
Links state and federal/regional policy and market incentives. The bill coordinates with existing Renewable Portfolio Standards, allows some overlap in compliance, and provides for repeal if a similar federal program is implemented. This approach prevents duplication of effort while reinforcing New York’s leadership in renewable energy transitions.
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Full text
14 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2955
2017-2018 Regular Sessions
IN ASSEMBLY
January 23, 2017
Introduced by M. of A. HEVESI -- read once and referred to the Committee on Energy
AN ACT to amend the public service law and the public authorities law, in relation to the creation of renewable energy credits for retail electric providers, the New York power authority and the Long Island power authority; and providing for the repeal of such provisions upon expiration thereof
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. This act shall be known and may be cited as the "New York renewable energy development and jobs act of 2017".
§ 2. The public service law is amended by adding a new section 66-o to read as follows:
§ 66-o. Procurement of renewable energy credits. 1. As used in this section:
(a) "Alternative compliance payment" means a payment of a defined dollar amount per megawatt-hour, as established by the commission, that a retail electric supplier shall submit to the commission in order to comply with its annual obligations established in subdivision two of this section.
(b) "Distributed renewable energy resource systems" means small-scale power generation technologies in the range of one kilowatt to ten thousand kilowatts used to provide an alternative to or an enhancement of the traditional electric power system, using renewable energy resources.
(c) "Distributed renewable energy generation" means qualified renewable energy generation produced by a qualified renewable energy system that is interconnected to the customer's side or utility distribution company meter.
(d) "Electric distribution company" means an investor-owned utility that distributes electricity within New York state.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02483-01-7
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(e) "New energy technologies" means all methods used to produce, distribute, conserve and store energy by methods not in common commercial use, with emphasis on renewable energy sources including but not limited to solar, wind, bioconversion and solid waste.
(f) "Power purchase agreement" means an agreement, for a minimum of fifteen years, for the purchase of renewable energy credits from an owner of a qualified renewable energy system.
(g) "Qualifying owner" means the owner of a qualifying renewable energy system that is also a:
(i) resident of New York state;
(ii) limited liability company organized under the New York state limited liability company law and made up of a majority of members who are New York state residents; or
(iii) New York not-for-profit organization organized under the New York state not-for-profit corporation law.
(h) "Qualified renewable energy generation" means the electric energy measure in kilowatt-hours produced from a qualified renewable energy system.
(i) "Qualified renewable energy system" shall mean a distributed renewable energy resource system or technology as determined by the commission consistent with the definition provided in paragraph (b) of this subdivision that may result in the cost effective production of electricity from renewable resources that has been constructed and is owned by a qualifying owner. For the purposes of this section, they shall include:
(i) wind;
(ii) solar photovoltaic, including rooftop and stand alone systems;
(iii) solar thermal;
(iv) geothermal;
(v) fuel cell technology;
(vi) hydro-kinetic, including approved river or tidal generation systems;
(vii) hydroelectric;
(viii) biomass;
(ix) anaerobic digestion; and
(x) landfill gas to energy systems.
(j) "Renewable energy credit" or "REC" means the environmental attributes associated with one megawatt-hour of qualified renewable energy generation.
(k) The term "renewable energy resources" shall have the same meaning as set forth in subdivision twelve of section 1-103 of the energy law.
(l) "Retail electric supplier" means an entity authorized to sell electricity at retail rates and terms and conditions to end-use customers in New York, including an electric distribution company acting as a provider of last resort or an energy service company approved by the commission for such purpose.
(m) "Small retail distributed customer-sided renewable energy generation" means retail distributed renewable energy generation produced by a qualified renewable energy system that is equal to or less than one hundred kilowatts in size.
2. (a) Each retail electric supplier shall annually procure RECs by an additional annual percentage point of such supplier's total electric sales in each compliance year:
Compliance Annual
Year Requirement
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2019 0.05%
2020 0.13%
2021 0.15%
2022 0.17%
2023 0.20%
2024 0.23%
2025 0.27%
2026 0.32%
2027 0.38%
2028 0.44%
2029 0.52%
2030 0.61%
2031 0.72%
2032 0.85%
(b) If by the year two thousand thirty-four New York state has not met its goal of thirty-five percent electric energy from renewable energy sources, the program established in this section shall be extended and shall grow at a rate of 0.85 percentage points until this goal is achieved.
(c) At least twenty-five percent of the annual obligation applicable to each retail electric supplier shall be met through the procurement of RECs associated with small retail customer-sided distributed renewable energy generation. In the third compliance year and each year thereafter the commission shall undertake a review concerning the retail electric supplier's ability to meet twenty-five percent of their annual obligations through small retail customer-sided distributed renewable energy generation. If the commission concludes that a retail electric supplier cannot reasonably meet this obligation, the commission may allow a retail electric supplier to apply for a waiver to procure power purchase agreements from other sources.
(d) Obligations for the procurement of RECs associated with qualified renewable energy generation shall continue until all existing power purchase agreements have expired.
(e) Retail electric suppliers may meet their obligations established by the commission pursuant to this subdivision through the procurement of RECs together with or separate from the associated qualified renewable energy generation.
(f) The New York state energy research and development authority shall establish an automated REC tracking system within one hundred eighty days of the effective date of this section. Each qualifying owner shall apply to the New York state energy research and development authority to certify the amount of qualified renewable energy generation they will be able to achieve and to receive a renewable energy credit certificate. The New York state energy research and development authority shall consult with the New York independent systems operator to verify the amount of qualified renewable energy generation produced. Once this amount is verified, the New York state energy research and development authority shall issue the qualifying owner RECs proportional to the amount of qualified renewable energy generation produced. Each REC certificate shall have an electronic identification number to assist in the tracking. Each issuance, sale, and trade of a REC shall be recorded in the tracking system.
(g) RECs shall be eligible for use in meeting the obligations established in this subdivision in the compliance year in which they are created and for the following two compliance years.
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3. (a) In the event that retail electric suppliers cannot meet their obligations established in subdivision two of this section, they shall be permitted to discharge such obligations by making an alternative compliance payment in an amount established by the commission, provided, however, that the commission shall set such payment at a level that shall stimulate the development of new qualified renewable energy generation necessary to achieve the obligations established in subdivision two of this section.
(b) No later than December first, two thousand twenty, the commission shall establish an alternative compliance payment schedule through the year two thousand twenty-one. The commission shall set alternative compliance payment levels no later than January thirty-first of each year thereafter to serve as the payment level for the year in which it is set. The commission shall review such schedule to ensure that the payments are set at a level to stimulate the development of new qualified renewable energy generation in accordance with paragraph (a) of this subdivision. Once such schedule is established, the commission may adopt, after appropriate notice and opportunity for public comment, an increase in alternative compliance payments, provided that the commission shall not reduce previously established levels of payments, nor shall the commission provide relief from the obligation of payment of the alternative compliance payments by the retail electric suppliers in any form.
(c) The commission shall make available all monies from amounts collected through such alternative compliance payments for renewable programs and initiatives to be administered and funded by the New York state energy research and development authority.
4. (a) No later than December first, two thousand twenty, the commission shall establish a template for power purchase agreements to be used by retail electric suppliers for their procurement of RECs for the purpose of fulfilling their obligations established in subdivision two of this section.
(b) Each retail electric supplier shall, not later than January first, two thousand twenty-one, submit for commission review and approval a solicitation plan that shall include a timetable and methodology for soliciting proposals for RECs associated with qualified renewable energy generation other than small retail distributed renewable energy generation, for the purpose of fulfilling its obligations established in subdivision two of this section. The electric distribution company's solicitation plan shall be designed to foster a diversity of renewable project sizes and participation among all eligible customer classes subject to cost-effectiveness considerations.
(c) Each retail electric supplier shall execute its approved solicitation plan no later than thirty days after commission approval and submit for commission review and approval its preferred procurement plan comprised of any proposed power purchase agreements for RECs associated with qualified renewable energy generation other than small retail distributed renewable energy generation. The commission may approve, reject or modify an application for approval of such plan, provided that the commission shall approve such plan if the commission finds that: (i) the solicitation and evaluation conducted by the electric distribution company was the result of a fair, open, competitive and transparent process; (ii) approval of the procurement plan would result in the achievement of the distribution company's obligations pertaining to the procurement of RECs associated with qualified renewable energy generation other than small retail distributed renewable energy generation at
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the lowest reasonable cost; and (iii) such procurement plan satisfies other criteria as may be established in the approved solicitation plan. If the commission does not approve, reject or modify the distribution company's application within sixty days, the procurement plan shall be deemed approved.
(d) No later than January first, two thousand twenty-one, each retail electric supplier shall submit to the commission for review and approval a plan for the achievement of its obligation pertaining to the procurement of RECs associated with small retail distributed renewable energy generation established in subdivision two of this section.
5. Each retail electric supplier shall be entitled to recover the prudently incurred costs of complying with its obligations established in subdivision two of this section, as determined by the commission.
6. No later than January first, two thousand twenty-one, the commission shall establish an incentive program for retail electric suppliers based on such companies' achievement of their obligations, and exemplary performance beyond such obligations, established in subdivision two of this section (a) in a cost-effective manner that achieves the obligations at least cost and avoids long-term costs to the transmission and distribution system; (b) provides enhanced electricity reliability within companies' service territories; and (c) minimizes peak load in constrained areas.
7. No later than January first, two thousand twenty-one, the commission shall establish the terms and conditions that shall be applicable to power purchase agreements entered into by retail electric suppliers for the procurement of RECs associated with small retail distributed renewable energy generation, for the purpose of achieving such companies' obligations pertaining to RECs associated with such generation established in subdivision two of this section. Such terms and conditions shall include a tariff, as established by the commission, for the procurement of RECs associated with small retail distributed renewable energy generation, to be paid by electric distribution companies to applicable owners of qualified renewable energy technologies. The commission shall review such tariffs every two years and adjust as necessary to achieve the obligations pertaining to RECs associated with small retail distributed renewable energy generation established in subdivision two of this section; provided, however, that such adjustments shall not go below the originally set tariff rate.
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