The Accelerated Renewable Energy Growth and Community Benefit Act (“Accelerator Act”) was enacted to speed up the siting and construction of major renewable energy projects in New York State. One of the key components of the Accelerator Act was the creation of the Office of Renewable Energy Siting (ORES) within the New York State Department of State to address, in large part, many of the shortcomings of New York State’s existing Article 10 siting process. At the statutory level, ORES is intended to improve and streamline the process for cost-effective siting of large-scale renewable energy in a timely fashion in order to achieve the State’s aggressive renewable energy targets. Of course, the details would be fleshed out in regulations required to be promulgated within a year of the Act’s passage. Continue Reading New York State’s Office of Renewable Energy Siting Draft Regulations Out for Public Comment
On August 20, 2020, the New York State Supreme Court, Appellate Division, Fourth Department issued a decision in Cornell University v. Board of Assessment Review (“Cornell University”), finding that a solar photovoltaic system is taxable real property. See No. CA 19-00339, slip op. 04636, 2020 WL 4876486 (4th Dep’t Aug. 20, 2020). This decision settled, at least in the Fourth Department, a real property tax question long considered—and feared—by solar developers. Although this decision has the potential for significant impacts on solar development projects throughout New York State, it may be possible to mitigate the financial impact of this tax burden with careful planning and mindful project decisions. Continue Reading Solar Photovoltaic Systems Are Taxable Real Property: Fourth Department Decision Requires Consideration in Early Project Development
On May 14, 2020, the New York State Public Service Commission (“Commission”) issued an order that will mark a turning point in the State’s electric grid modernization efforts (“Transmission Planning Order”). The Transmission Planning Order was issued in response to the recently enacted Accelerated Renewable Energy Growth and Community Benefit Act (“Accelerate Act”), which was signed into law on April 3, 2020, as previously reported in Phillips Lytle’s Energy Client Alert. The Accelerate Act directs the Commission to conduct a comprehensive study (“Power Grid Study”) to identify distribution, transmission and bulk investments to facilitate timely achievement of New York State’s nation-leading clean energy objectives set forth in the Community Leadership and Community Protection Act (CLCPA). Upon completion of the Power Grid Study, the Accelerate Act directs the Commission to establish utility-specific capital plans to support the development and implementation of appropriate electric system upgrades. Continue Reading New York State Public Service Commission Accelerates Grid Modernization Efforts
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