The New York State Public Service Commission (“Commission”) leveraged an unprecedented interpretation of its “just and reasonable” regulatory authority to impose drastic changes to the retail energy marketplace, which will have ripple effects on Renewable Energy Credit (REC) markets, retail energy contracts, Distributed Energy Resource (DER) providers and other clean technology stakeholders. The Commission’s Order Adopting Changes to the Retail Access Energy Market (“Order”) establishes enhanced eligibility criteria for Energy Service Companies (ESCOs), mandates price caps on ESCO products, severely limits the type of value-added products and services ESCOs can provide to customers, and mandates granular transparency of energy product information on utility bills. By March 11, 2020, all ESCOs must file revised eligibility applications detailing how they will comply with the Order or risk immediate suspension. For insights into what this Order may mean for the future of retail energy markets and DER products in New York State, please see our latest Client Alert.
Since the New York State Public Service Commission (“Commission”) first authorized the Community Distributed Generation (CDG) program in 2015, CDG Sponsors—the entities that organize, own and/or operate CDG projects—have faced an uphill battle in explaining the program, marketing it to customers and streamlining the energy billing process. The confusion arises first and foremost because CDG customers currently receive only bill credits, not renewable electricity or the environmental attributes of that electricity. This is further complicated by the fact that credits are typically denominated on the bill in kilowatt hours and are allocated in a cumbersome manner, whereby the utility first applies credits to a customer’s utility bill, but then the customer separately pays for a portion of those credits at a discounted rate (the “CDG Savings Rate”) to a third party – the CDG Sponsor – through a second bill. In addition to creating market confusion, this two-step process imposes unnecessary customer management and billing costs. Continue Reading New York State Public Service Commission Modernizes Community Solar Billing Procedures
Public Service Commission Resets Retail Energy Marketplace:
All ESCOs Required to Re-Register Under New Rules and Completely Revise Product Offerings
On December 12, 2019, the New York State Public Service Commission (“Commission”) voted to reset the retail energy marketplace by requiring all Energy Service Companies (ESCOs) to re-register for eligibility to serve customers. While the final order remains to be issued, the Department of Public Service (DPS) explained that as part of the re-registration process, it will subject each ESCO to new eligibility requirements and require all ESCOs to modify their product offerings to fit one of four categories. Continue Reading Reset 2.0?
The waning hours of the 2019 New York State legislative session saw both houses pass an extraordinary piece of legislation. The Climate Leadership and Community Protection Act (“Act”) requires the State to achieve a carbon-free electricity system by 2040 and reduce greenhouse gas emissions 85% below 1990 levels by 2050. The Act creates and empowers a council to determine how the State will achieve these goals. It is anticipated that the Act will also drive investment and a number of clean energy solutions, as well as target investments to benefit disadvantaged communities. The Act will also clearly impact existing energy consumers, including large industrial users. The Act was signed into law by Governor Cuomo on July 18, 2019. The new law is likely to profoundly impact and transform New York’s economy over the coming 50 years.
On April 1, 2019, the State Legislature approved a $175.5 billion budget for 2019-2020, which, among other things, eliminates an important sales tax exemption that allowed certain commercial customers of Energy Service Companies (“ESCOs”) to receive electric and gas supply without paying sales tax on transmission and distribution charges.
Since 2000, shortly after New York restructured its energy markets, the NYS Tax Law has included an exemption for commercial ESCO customers that was designed to incentivize consumer choice and enhance the ability of ESCOs to offer competitive prices (“Exemption”). Under the Exemption, commercial customers that received service from an ESCO would pay sales tax on the commodity portion of their bills, but not the delivery service. In contrast, default utility customers paid sales tax on both the commodity and delivery provided by the utility. Continue Reading New York Repeals ESCO Sales Tax Exemption for Businesses
Throughout the first four years of New York’s Reforming the Energy Vision (“REV”) initiative, the precise role of energy storage has been unclear. There was no energy storage goal, only sparse incentives were available to spur development, the regulatory framework remained under construction, and the relatively nascent storage applications did not seem to fit within currently existing market mechanisms.
New York is now paving the way for a robust storage industry. In December 2018, the Public Service Commission (“Commission”) adopted an energy storage goal of 3,000 MW by 2030, with an interim target of 1,500 MW by 2025 (the “Storage Order”). To jumpstart the program, the Commission ordered Consolidated Edison to competitively procure and deploy 300 MW of energy storage by 2022, and the remaining utilities to each procure 10 MW of energy storage in their respective service territories. Continue Reading New York Transforms Energy Storage Economics
The New York Public Service Commission (“PSC”) appears to be creating a new Office of Investigations and Enforcement (“OIE”) and has posted a job listing for a Director of OIE (“Director”) who would report to the CEO of the Department of Public Service (“DPS”), as well as the Chairman of the PSC. The Director would be tasked with managing the OIE’s efforts in investigating and enforcing the regulations promulgated pursuant to §25 and §25-a of the Public Service Law. This mandate may include a vast field of public utilities and comes at a time when New York is in the midst of updating its complex Value of Distributed Energy Resources mechanism, which regulates electric utilities in their dealings with the ever-increasing number of privately owned distributed energy resources. Continue Reading New York Public Service Commission to Create “Office of Investigations and Enforcement” to Centralize Compliance Regime
On August 21, 2018, the Environmental Protection Agency (“EPA”) proposed a new rule which would replace the Obama-era Clean Power Plan (“CPP”) and establish new emissions guidelines for states to address greenhouse gas (“GHG”) emissions from electric-generating power plants. As background, the CPP was stayed by the Supreme Court in a 5-4 decision in February of 2016 before the rule ever went into effect. More recently, in October 2017, the EPA announced its intention to effectively repeal the CPP because it “exceeded” the EPA’s authority. Now, the EPA is proposing to enact the Affordable Clean Energy rule (“ACE Rule”) to reduce GHGs while giving states more flexibility to achieve that goal. Continue Reading EPA Proposes to Replace Clean Power Plan with Affordable Clean Energy Rule
Recently, Phillips Lytle’s own Dennis Elsenbeck made an appearance on Spectrum News’ Capital Tonight program with host Liz Benjamin to discuss the energy landscape in New York and the economic impact of energy-related policy decisions. As the State legislative calendar year comes to a close, the conversation centered around how energy policy should be focused on meeting market demands so that it aligns with the current economic goals to drive development. As the energy industry continues to undergo changes through innovation and entrepreneurship, synergy amongst the key players – State policymakers, economic developers and the utilities – will influence the effectiveness and efficiency of energy-related development across the State. The interview in its entirety may be viewed in this video.
New York State (“NYS” or “State”) is launching a second round of request for proposals (“RFPs”) for large-scale renewable projects. According to NYS Energy Research and Development Authority (“NYSERDA”), the State is seeking to accelerate progress to achieve the lofty goals set in the Clean Energy Standard initiative that went into effect in August of 2016. As we have previously reported, the Clean Energy Standard mandates that renewable energy supply 50 percent of the State’s electricity needs by 2030. Large-scale renewable projects, such as utility-scale solar and wind, have been expected to carry a huge load in bridging the gap between the mandated 50 percent and the roughly 23 percent that was produced by renewables in 2016. Continue Reading New York State Seeks Proposals for Large-Scale Renewable Projects