LSE Obligations
The Clean Energy Standard
[PDF] requires three approaches for utilities, electric companies, and other load serving entities (LSEs) to help New York meet clean energy and climate goals: meeting a Renewable Energy Standard through the purchase of Tier 1 RECs and a requirement to purchase zero-emissions credits (ZEC). The processes and obligations for purchasing Tier 1 RECs and ZECs are similar but the timelines differ. Compliance processes have also changed since the adoption of the CES as the programs have matured and new obligations have been added.
Renewable Energy Standard (RES)
Effective January 1, 2025, New York State’s load-serving entities must purchase Tier 1 RECs from NYSERDA every year. The annual obligation is based on the total Tier 1 RECs NYSERDA procures via Large-Scale Renewable solicitation plus the cost of VDER Tier 1 REC and an LSE’s proportional amount of statewide load in each compliance year.
What’s a Tier 1 REC?
Tier 1 RECs are derived from the energy production of megawatt-hour (MWh) by RES-eligible electric generation sources which first entered commercial operation on or after January 1, 2015. One Tier 1 REC represents the energy production of one MWh. The initial Clean Energy Standard order, accessible on the CES homepage, identified RES-eligible resources and other requirements.
Former LSE Obligation Percentage Approach
Compliance Year 2024 was the last compliance year to use the LSE Obligation Percentage Approach.
The initial RES Obligation was based upon an LSE Obligation Percentage Approach. The RES obligated every load serving entity (LSE) in the State to serve their retail customers by procuring new renewable resources, evidenced by qualifying Tier 1 Renewable Energy Certificates (RECs) or by making alternative compliance payments (ACPs). LSEs had four options to ensure compliance, they include:
- Purchasing Tier 1 RECs from NYSERDA
- Purchasing Tier 1 RECs from a third party
- Self-supplying Tier 1 RECs
- Making ACPs
The CES determined the percentage of load that needed to be satisfied by Tier 1 RECs annually. Later, the October 15, 2020 Order Adopting Modification to the CES [PDF] revised the percentages.
Tier 1 REC Annual Obligations |
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|
Year |
LSE Tier 1 Obligation |
Updated LSE Obligation (03/16/22) |
|
|
2017 |
.035% |
.035% |
|
|
2018 |
.15% |
.15% |
|
|
2019 |
.78% |
.78% |
|
|
2020 |
2.84% |
2.84% |
|
|
2021 |
2.04% |
2.04% |
|
|
2022 |
5.61% |
3.25% |
|
|
2023 |
8.20% |
6.16% |
|
|
2024 |
_ |
6.45% |
|
The New York Generation Attribute Tracking System (NYGATS) will record and track information on electricity generated, imported, and consumed within New York State. Additionally, NYGATS will demonstrate LSE compliance with, and progress toward, the CES 70% by 2030 goal. LSEs need to register in NYGATS to create an account and manage their CES obligation. Visit NYSERDA’s NYGATS information page to learn more about using NYGATS.
Tier 2
NYSERDA’s Tier 2 program ended December 31, 2023.
Zero-emission Credits
New York State’s load-serving entities must purchase zero-emission credits (ZECs) from NYSERDA every year. This annual obligation is based on an LSE’s proportional amount of statewide load in each compliance year.
Tier 4
Tier 4 will be a future LSE Obligation. Tier 4 is currently under development. More information to come.
Contact
Email [email protected] with questions regarding REC or ZEC purchases.