Archive for the ‘New York’ Category

RPS Evolving: States Take On U.S. Climate Goals

Posted April 19th, 2017 by SRECTrade.

This article by Allyson Browne was originally published in the American Bar Association’s Natural Resources & Environment Spring 2017 Issue: Science & The Law. It provides an in-depth look into how states across the U.S. are carrying the country’s torch towards Paris pledges with impactful RPS programs. In addition, the article breaks down the Clean Power Plan to illustrate how states could evaluate and implement similar obligations in harmony with existing RPS policies. These state actions will be increasingly important as the EPA endeavors to review the Clean Power Plan under President Trump’s recent Executive Order

As the Clean Power Plan (CPP) undergoes judicial review and faces a likely unsupportive Trump administration on the federal stage, states across the country are bringing their renewable portfolio standards (RPS) back to the top of their legislative agendas. Although the CPP is not the primary driver of today’s RPS reformation, its future will undoubtedly impact the future of RPS policies across the country, if not cause an RPS revolution—one way or the other. Historically, federal policies, including the federal production tax credit and the investment tax credit, have served primarily to support RPS programs and renewables deployment. Moreover, the Federal Energy Regulatory Commission’s (FERC) regulation of the wholesale electricity market has increased competition in the renewables sector by reducing barriers to project development and market participation, particularly with respect to requirements placed upon electricity suppliers and utility companies for renewables integration. Examples of such regulation are FERC Order 2003, Standardization of Generator Interconnection Agreements and Procedures (issued July 24, 2003), and FERC Order 764, Integration of Variable Energy Resources (issued June 22, 2012). As states look beyond their RPS target years and goals, the CPP has the ability to influence RPS program design much more heavily than did its federal predecessors. The CPP could prompt states to more closely align renewable energy goals with emissions reduction goals, thereby minimizing legislative and regulatory overlap and enabling states—and the nation as a whole—to recognize the maximum benefits of these broader climate change policies. But this is not to say that RPS programs will weaken if the CPP is struck down. Conceivably, the rejection of the CPP could lead to a great awakening of state leadership in our clean energy and climate future.

Renewables technology has progressed significantly since the first RPS was enacted in Iowa in 1983. Iowa Code § 476.41, et seq. And RPS programs, which require retail electricity suppliers to supply a minimum percentage or amount of their retail load with eligible sources of renewable energy, are constantly playing catch-up to these ever-evolving market dynamics. Technological innovations and the diversification of financial products have driven down project costs and broadened accessibility. States have provided incentives such as rebates or net metering credits. Project developers and service providers have adapted to meet the varied conditions of their markets. The result is a diverse portfolio of U.S. RPS policies, as states across the country have designed, implemented, revised, frozen, annulled, or otherwise modified their individual RPS programs as the renewables sector has matured over the course of the past 33 years.

Today, 29 states and the District of Columbia have compliance RPS programs. Altogether, the obligations apply to 55 percent of total U.S. retail electricity sales. See Galen L. Barbose, U.S. Renewables Portfolio Standards: 2016 Annual Status Report, Lawrence Berkeley National Laboratory No. 1005057 (April 2016). And these figures do not include states with voluntary renewable energy goals, such as North Dakota, Utah, and Virginia. See Jocelyn Durkay, State Renewable Portfolio Standards and Goals, Nat’l Conf. of State Legislatures (Dec. 28, 2016).

Although most RPS programs share common elements (such as imposing penalties for lack of compliance and utilizing some form of tradable renewable energy credit (REC) to track compliance), no two states share an identical RPS. States differentiate their RPS policies with unique targets and time frames, entities obligated and exemptions, eligibility rules and definitions, carve-outs, contracting or procurement requirements, and the use of cost caps and floors. Barbose, supra. This differentiation has empowered states to design programs that best fit their needs, market dynamics, and renewables goals. Modifications can be made when and where the barrier to entry is too high, or if the RPS imposes exorbitant costs on ratepayers. Consequently, the majority of states with RPS have hit their targets, with 94 percent achievement in 2013 and 95 percent achievement in 2014. Id.

While few new RPS policies have been enacted in recent years, states continue to modify existing policies in response to changing market conditions, program success and end-dates, and federal policies. As states begin to approach their target years or achieve (or exceed) target goals, states are evaluating whether and how to extend targets into the future. Under currently enacted laws, 20 states will reach the terminal year of their RPS by 2026. Id.

Recent legislative activity evidences this period of reformation. State legislatures have introduced and enacted more than 200 RPS-related bills since the beginning of 2015. See EQ Research, available at http://eq-research.com/. Most notable are the five jurisdictions (California, Oregon, New York, Vermont, and D.C.) that have adopted policies requiring at least 50 percent renewables, and Hawaii—the first U.S. state to establish a 100 percent RPS goal. Id. In addition to extending and expanding RPS time frames and goals, states have modified RPS programs by introducing resource-specific or distributed generation carve-outs, refining resource eligibility rules and definitions, and relaxing geographic preferences or restrictions. Barbose, supra.

As we approach common terminal years in 2020 and 2025, we are likely to see continued legislative and gubernatorial action on RPS programs and renewables goals. But approaching targets are not the only reason why states are revisiting and revising their RPS policies. Endogenous factors, including compliance costs, legal challenges, and other state- and local-level market and policy conditions are the primary internal drivers of RPS reevaluation. On the federal front, continued FERC regulation and the impending decision on CPP are making states rethink—and redesign—RPS policies to ensure continued compliance with federal law. Even before CPP leaves the bench, some states are planning ahead to ensure that their RPS programs will support their CPP-compliance programs. Pennsylvania, for instance, is already designing its CPP state plan, undeterred by the U.S. Supreme Court’s February 2016 decision granting a stay on the CPP pending the resolution of legal challenges. See Susan Phillips, Wolf says PA will move forward on Clean Power Plan, StateImpact Pennsylvania (Feb. 10, 2016); and Chamber of Commerce v. EPA, 136 S. Ct. 999 (2016) (order in pending case).

The CPP is the first-ever national standard aimed toward reducing carbon pollution from power plants, the nation’s largest source of emissions. See EPA, Fact Sheet: Overview of the Clean Power Plan (2015). Recognizing that fossil fuels will “continue to be a critical component of America’s energy future,” the EPA put forth the CPP to ensure that fossil fuel-fired power plants operate “more cleanly and efficiently, while expanding the capacity for zero- and low-emitting power sources.” Id. The CPP establishes interim and final carbon dioxide (CO2) emission performance rates for two subcategories of fossil-fuel-fired electric generating units (EGUs): fossil fuel-fired electric steam generating units (i.e., coal- and oil-fired power plants) and natural gas-fired combined cycle generating units. Id.

Under the CPP, states and utilities can implement the standards and meet these goals through one of three methods: a rate-based state goal measured in pounds per megawatt hour (MWh), a mass-based state goal measured in total short tons of CO2, or a mass-based state goal with a new source complement measured in total short tons of CO2, also known as a state measures plan. States need to develop and implement plans which, when combined with other state or regional initiatives, will ensure compliance with the CO2 emissions performance rates over the 2022–2029 compliance period, and with the final CO2 emissions performance rates, rate-based goals or mass-based goals by 2030 (or later, if the CPP is further delayed). The EPA estimates that the pollution reductions required by the CPP will yield climate benefits of $20 billion, health benefits of $14–34 billion, and net benefits of $26–45 billion. Id. Complementary or additive RPS programs will amplify these benefits by incentivizing additional renewable deployment, implementing stronger energy efficiency standards, and more.

Under any of the three methods, compliance will be tracked via emissions trading. See Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662 (Oct. 23, 2015) (to be codified at 40 C.F.R. Part 60). How an existing RPS and its tracking mechanism will interplay with a state’s CPP plan and its emissions trading will depend on the state’s CPP compliance path. Under a rate-based state goal, renewable energy facilities, energy efficiency units, new nuclear facilities, or performance upgrades at existing nuclear, hydro, and natural gas combined cycle power plants will produce emission rate credits (ERCs), which represent one MWh of zero-emission generation. These ERCs will be added to the denominator of the pounds per MWh until the EGU (either individually or on a state average basis) satisfies the required rate.

A state with an existing RPS that uses RECs to track compliance will need to decide whether and how ERCs and RECs will be issued, tracked, and retired together or separately. In its guidelines, the EPA clarifies that ERCs were intended to be unique and separate from RECs, and that a single generating unit could produce both an ERC and a REC for each MWh generated where eligibility overlap exists. But in practice, managing ERCs and RECs in the same compliance universe will be no easy undertaking—there will be issues with double-counting, existing forward contracts, and whether a facility can still claim its renewable attributes if it keeps its RECs, but trades away its ERCs. Id.

Emissions trading under a mass-based state goal is much more straightforward—states will be issued emissions allowances, which can be auctioned (traded) or given away. Compliance will be determined solely on total tons of CO2 emitted. As designed, there is no direct relationship between a state’s CPP plan and its RPS; rather, the two plans would exist contemporaneously. Id.

States with RPS, energy efficiency standards, and other related programs are best suited for a mass-based state measures plan. The state measures plan allows a state to leverage its existing policies, programs, and compliance mechanisms to meet the standards imposed by the CPP. And, rather than being the primary enforcement mechanism, the mass-based emissions standard acts as a federally enforceable backstop that only kicks in if the state measures fail to achieve the required reductions. There are no ERCs under this plan, and states can continue to utilize RECs to track RPS compliance, focusing CPP compliance efforts on bolstering their existing RPS and other programs instead of establishing entirely new programs and tracking tools. Id.

It is evident that the EPA carefully crafted the CPP to exist in harmony with state RPS programs and to provide a path for all states to reduce overall emissions while incentivizing renewable energy development—including those already on the right track. And although the CPP or similar federal policies would be instrumental in accelerating America’s timetable for achieving its Paris Agreement goals, states have proven willing to push for progress on their own. Now more than ever, it is imperative that states renew their commitments to renewable energy, promoting a sustainable renewables industry that supports continued job creation, grid resiliency efforts, and energy independence. As we enter into the era of Trump—and with it, an uncertain federal position on climate policy—states will take hold of the power to determine and define the nation’s stance for renewable energy and against the threat of climate change. Will we stand united?

Allyson Browne, Director of Regulatory Affairs & General Counsel

© 2017. Published in Natural Resources & Environment, Vol. 31, No. 4, Spring 2017, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

New York Solar Legislation Update

Posted September 21st, 2012 by SRECTrade.

A series of bipartisan bills were signed by Governor Andrew Cuomo on August 20th aimed at supporting business and homeowner investments in solar energy.  We outline the bills below.

Bill 34-B, expands the 25% tax credit for non- 3rd party owners, lessees, and PPA off takers. The credit does not exceed $3,750 for “qualified solar energy system equipment expenditures” before September 1st, 2006 or $5,000 on “qualified solar energy system equipment expenditures” after September 1st 2006. Qualified solar expenditures include:

A) Solar equipment installed on a property in the state and is the principal residence of the taxpayer at the time of install.

B) A solar equipment lease of at least 10 years in New York and is the principal residence of the taxpayer at the time of install.

C) Power purchase agreement spanning at least 10 years in New York and is the principal residence of the taxpayer at the time of install.

D) The expenditures connected with installation and labor.

E) This does not include the interest or other finance charges of solar equipment purchase.

Bill A10620 allows a property tax abatement over a “compliance period” of four years available to solar-generating systems installed in cities of one million people or more. The bill covers:

A)  Installations before January 1st 2011 can receive a tax credit that is the lesser of:

    1. 8.75% of facility cost
    2. 8.75% total amount of taxes payable
    3. $62,500

B) Installations on or after January 1st 2011 and before January 1st 2013 can receive a tax credit that is the lesser of:

    1. 5% of facility cost
    2. 5% total amount of taxes payable
    3. $62,500

C) Installations on or after January 1st 2013 but before or on January 1st 2015 can receive a tax credit that is the lesser of:

    1. 2.5% of facility cost
    2. 2.5% total amount of taxes payable
    3. $62,500

Senate Bill S03203 exempts commercial solar energy system installation costs from state sales tax obligations. Additionally Senate Bill S03203 gives municipalities the power to grant certain systems a tax exemption.

On another note, the much anticipated, “NY Solar Jobs Act” legislation, formally bill A05713 has been watered down under a renamed Assembly Bill  A09149.  This new bill, proposed by Assemblyman Steven Englebright eliminates language creating a state-wide SREC market due to push back from the New York Senate and Governor’s office. Representatives from Steven Englebright’s office, maintain “cautious optimism” that the bill will gain support when the 2013 Legislative Session begins in January. As of September 7th,  the “Solar Jobs Act” is searching for a Senate sponsor.

Analysis of the bill can be found on VoteSolar.org here. The bill sets a solar target of 670 MW in 2015 and ramps up to 3,000 MW in 2021 but segments goals in to three separate requirements, based on type of utility. The bill allows the utilities the ability to define how they plan to achieve the solar mandate and does not specify interim solar requirements between 2015 and 2021.

 Utility Type  2015  2021
 Investor Owned Utilities (IOUs)  270 MW  900 MW
 New York Power Authority  120 MW  400 MW
 Long Island Power Authority  150 MW  500 MW

New York Solar Jobs Coalition Sets Aggressive Targets

Posted December 7th, 2011 by SRECTrade.

Solar industry representatives in New York are teaming up with organized labor and other environmental advocacy groups to put forth ambitious goals to build a sustainable solar industry in the Empire State. The organizations collectively form the New York Solar Jobs Coalition, and their agenda goes beyond just getting more solar power tied to the grid. The proposal supports strong labor protection and wage laws for solar industry jobs to attract a skilled workforce that will create a more independent energy infrastructure.

New York has been slow to implement solar targets for their energy sector, lagging behind neighboring states New Jersey, Massachusetts, and Pennsylvania. Now, the Solar Jobs Coalition is calling for a program that will install 5,000 megawatts (MW) of solar power, or roughly 3% of the state’s energy portfolio, over a 15-year period. With the benefit of observing other state-based solar industries, the Coalition is wisely tying these targets to strong workforce standards that ensure efficient, quality work.

“Here in New York, we want to be able to do this work in a way that is cost efficient and that we attract the people with the highest skill,” stated Denis Hughes of the AFL-CIO in a local public radio interview last week.

The legislation supported by the Coalition would create an SREC market that differs from other neighboring states as well. The new SREC market would support distributed generation from residential and small commercial systems by requiring a minimum of 20% of eligible SRECs to come from systems under 50 kW. To attract financing, particularly for large-scale projects, utilities would be required to offer long-term contracts for periods up to 15 years, subject to negotiation for exact length and pricing. The one potential weakness of the proposed legislation is that it does not set a non-compliance penalty, or ACP, that would push buyers into the market and set a price ceiling for the SRECs.

Leaning on Governor Cuomo and state legislators, the Coalition predicts their proposal will build a $20 billion industry to New York while increasing the state’s  energy independence and reducing its carbon footprint. The Coalition has garnered support from national and state chapters of solar industry representatives, organized labor, and environmental advocacy groups.

DC Closes Borders to Out-of-State Solar Systems

Posted July 12th, 2011 by SRECTrade.

The Council of the District of Columbia unanimously voted, today July 12th, to close the DC SREC market to out-of-state systems. The Distributed Generation Amendment Act of 2011 (Bill 19-10) increases the SREC requirement in 2011 as well as establishes an SACP schedule through 2023.  Once in effect, the bill will allow out-of-state systems registered prior to 1/31/2011 to continue to sell SRECs in the DC market. The DC Public Services Commission has not provided clarification on how the bill will affect out of state systems that have already granted DC registrations after the January 31st 2011 grandfather date. For more information on the bill please refer to our previous blog postings here and here.

The bill is not yet law. It first must go through a 30-day Congressional Review process before it can go in to effect. Given these mechanistic delays we don’t expect the bill to go in to effect for at least another month.

The following chart illustrates which out-of-state systems will be effected by the legislation.


State Eligible Markets (after B19-10 is effective)
DE DE, PA
IN OH; PA (if in American Electric Power territory)
IL PA (if in Com Ed territory)
KY OH; PA (if in American Electric Power territory)
MD MD; PA
MI OH; PA (if in American Electric Power territory)
NC NC; PA (if in Dominion Electric Territory)
NJ NJ, PA
NY
OH OH; PA
PA PA; OH
TN PA (if in American Electric Power territory)
VA PA
WV OH; PA
WI

NY SREC market put on hold

Posted June 28th, 2011 by SRECTrade.

The New York State Assembly’s session ended on Friday, June 24th without the passing of the New York Solar Industry and Jobs Act, which would have established an SREC market in New York beginning in 2013. The bill is the assembly’s latest iteration of State Senate Bill S.4178A, which we covered in a blog post in May. Since then, the bill has received several edits:

*The compliance schedule for the implementation of solar has changed, with the first year’s targets reduced from a .33% solar requirement to a .15% requirement. The 2020 target of 1.5% solar has remained unchanged.

*The original $300 price floor for state-sponsored SREC sales has been removed, and SRECs will simply expire after 2 years.

*A multiplier making SRECs generated within a utility’s distribution region worth 1.5 the value of SRECs generated outside the distribution region was added.

Unfortunately, this important legislation will not be able to be addressed until the start of the 2012 session. Until then, the prospect of a NY SREC market has been put on hold.

SRECs coming to NY?

Posted May 23rd, 2011 by SRECTrade.

This year’s solar carve-out bill introduced in NY, S4178A-2011, is looking promising.  It was co-sponsored by 8 Republicans, and since the Republicans have only a small majority in the Senate and the Democrats have nearly a supermajority in the NY House, its a good sign, although it’s notoriously difficult to get a bill that even everyone agrees with through the NY legislature.  Gov. Cuomo ran on a strong solar platform so chances are high he will sign any bill that comes to him.  The bill itself is very promising, it starts out with a .33% requirement in 2012, which given the size of NY’s load would catapult them even with NJ in absolute terms for required solar build-out with about a 500,000 MWh requirement in 2012.  It allows the NY Public Service Commission (PSC) to set the alternate compliance (ACP) schedule, but it has a floor mechanism specified at $300 that is nearly identical to Massachusetts, so the ACP will have to be somewhat higher than that.  Overall this is a well-written bill that meets almost all the Effective SREC Market Design criteria outlined in our recent blog post.  As of May 18th it had been amended and recommitted to the Energy and Telecommunications Committee,  so there is plenty of time for those living in New York to contact their legislators regarding the bill.

Subscribe

Important New York SREC Update

Posted October 20th, 2010 by SRECTrade.

Good news for New York solar owners: SRECTrade was recently notified by the DC Public Service Commission that they are now accepting SRECs from facilities located in the state of New York.  We initially wrote about this several months ago and submitted applications that were subsequently rejected due to an inconsistency in the DC rules.  This inconsistency has been fixed and New York facilities can now be approved. In order to apply, your facility must be eligible to claim ownership for the SRECs that are generated (NYSERDA claims ownership of SRECs created by facilities funded by the program for a period of 3 years, after which the owner is eligible to generate and sell SRECs).

The bad news… act soon: Per the rules of the DC SREC programs, facilities are able to receive credit for generation dating back to the first month of the current energy year.  In order to receive credit for generation in 2010, all applications should be submitted to the DC Public Service Commission as quickly as possible so that the Commission has ample time to approve your facility by December 31st. Receiving approval by December 31st will allow your facility to be credited with SRECs as far back as January 1st, 2010.

Due to this time constraint, SRECTrade recommends owners submit applications directly to the DC Public Service Commission. The DC registration process requires an original and notarized application mailed directly to the DC Public Service Commission. Once approved, you can then apply for the EasyREC program.

Instructions for submitting an application to the DC SREC Program:
1. Download and complete the DC RPS Application.

2. Once you have completed the application and had the affidavit of general compliance notarized, mail the original to:

Dorothy Wideman
Commission Secretary
Public Service Commission of the District of Columbia
1333 H Street, N.W
2nd Floor West Tower
Washington, D.C. 20005

Cautionary comment on the DC SREC Market: The DC SREC market is a relatively small market.  Although SRECs are currently selling around $300, the market may soon be over-subscribed. This is due to the significant supply that can be drawn from several states across the region. In addition, DC allows solar thermal facilities to count generation towards the SREC requirement. For these reasons, buyers in the DC SREC market will eventually be able to meet their requirements with ease, which would lead to a potential significant drop in pricing.  The states eligible for the DC market include:

Delaware
Indiana
Illinois
Kentucky
Maryland
New Jersey
New York
North Carolina
Pennsylvania
Tennessee
Virginia
West Virginia
Wisconsin

Subscribe

NY SRECs Expected to be Eligible for DC Market

Posted September 16th, 2010 by SRECTrade.

The District of Columbia Public Services Commission has been revising the language of the state RPS, and details are expected to be released at the beginning of October.  Currently, a discrepancy in the wording of the RPS makes the eligibility of PJM-bordering states, such as New York, unclear.  This ambiguity led to the rejection of New York solar facilities earlier this year, and has effectively halted the certification of NY facilities in DC.  We expect that this revision will clarify the status of New York systems, making them eligible for the DC SREC market.  As soon as concrete details are released, SRECTrade will resume registering New York facilities in DC as a part of our EasyREC program.

Although prices in the DC market are close to $300 per SREC, the market is small.  In 2010, a total of approximately 3 megawatts must be installed in order to meet the requirement.  That number grows to 15 megawatts in 5 years.  Considering that facilities in the entire PJM region and adjacent territories are eligible for the DC market, it is quite possible that this market becomes oversubscribed in the future. We foresee the DC market as a viable option for smaller solar facilities for now, but in the long-run, it will be difficult for the solar industry in New York to rely on the DC market. The long-term solution for New York is to pass the Solar Jobs Act that is currently pending in the senate. Hopefully it will pass this fall and create one of the largest SREC markets in the nation.

Subscribe

NY Candidate for Governor Suggests SREC Program in Energy Plan

Posted August 12th, 2010 by SRECTrade.

Andrew Cuomo, the New York attorney general and Democratic candidate for governor, published an energy plan that suggests increased production of solar and wind energy.  The document, titled “Power NY,” suggests New York adopt an SREC program similar to those that have been so successful in other states such as New Jersey. It declares, “A programmatic commitment to solar power would go a long way toward stimulating the growing solar industry in New York.” Cuomo sites that significant economic growth experienced by California and Arizona upon making commitments to promote expansion of solar power within the states. Both states saw global solar manufacturers locate headquarters within their boarders (China’s Suntech Corp. in Arizona, and SunPower Corp. in California).

The candidate’s plan would create a system of solar renewable energy credits called NY-Sun. The Renewable Portfolio Standard of the state would include a solar carve-out, making utilities purchase SRECs to meet their solar requirement or suffer a compliance fine. He argues that the state should establish specific targets for the adoption of solar energy generation that utilities and electric service companies would have to meet, with the requirements to be suspended if solar costs do not drop to the extent expected.

Mr. Cuomo is the first candidate in the race for Governor to release an energy plan. The length and centrality of the document to the campaign indicates the importance of the worldwide energy transformation in the future of New York.

See the article on the Gubernatorial Candidate’s solar and SREC plan for more information.

Solar Bill Could Create New York SREC Market

Posted June 16th, 2010 by SRECTrade.

A strong solar bill currently moving through the state senate has the potential to make New York a national solar leader. The New York Solar Jobs Act of 2010 establishes aggressive annual solar capacity targets, reaching 2.5% of the state’s total energy–an estimated 5GW–by 2025.

The legislation would also provide a strong economic opportunity in the state. According to NREL’s Job and Economic Development model, the program will support about 22,000 jobs. On top of this, New York is expected receive a $20 billion boost to its economy. Independent energy consultants from Crossborder Energy estimated the cost of the program to be a 39 cent increase in each NY resident’s energy bill.

If this bill is passed into law, New York will be in position for a robust SREC market. SRECTrade already has a presence with many New York solar companies, and as soon as this bill is passed we will be working toward establishing a market for SRECs in the state.

For more information on the bill, find the complete article here.