Renewable Portfolio Standard Frequently Asked Questions

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Q: What is a Renewable Portfolio Standard (RPS)?

A: An RPS is a policy that seeks to increase the proportion of renewable electricity used by retail customers. As of April 2012, 24 states (including New York) and the District of Columbia have implemented RPS policies. Five additional states have set voluntary goals for adopting renewable energy instead of portfolio standards with binding targets.

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Q: What sources qualify as renewables in the New York RPS program?

A: Generally, generation from photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Fuel Cells, Anaerobic Digestion, Tidal Energy, Wave Energy, Ocean Thermal, Ethanol, Methanol, and Biodiesel are eligible. In April 2010, the Public Service Commission expanded eligible technologies to include limited applications of solar thermal, and biogas delivered to generation facilities via natural gas lines.

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Q: Why not let the market decide electricity sources and costs? Why do we need an RPS policy?

A: Fossil fuel powered electric generating units have been operating for decades and are generally lower cost sources of electricity. Today, in the face of increasing environmental health problems and climate change concerns, we are looking to newer, cleaner sources of energy. Renewables offer some of the most environmentally friendly, sustainable forms of energy available, but the industry has many challenges to overcome. Like any new technology, renewables struggle to compete financially with "traditional" energy sources like fossil fuels. Renewables are disadvantaged by high capital costs, and the market's failure to capture non-monetary benefits such as reduced air emissions, economic development benefits, and the increased national security that comes from using local resources.

Policies like New York State's RPS will help the renewable energy industry to develop infrastructure, reach market potential, and overcome the steep learning curve typical of new industries. The RPS program will not be permanent. Ideally, utilities and consumers will choose renewables not because of a policy mandate, but because renewables offer sustainability, environmental favorability, and economic benefits.

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Q: What is New York's RPS percentage and year target?

A: New York's RPS goal is to reach 30 percent by 2015. Of this 30 percent, NYSERDA is responsible to contract for approximately 10.4 million megawatt-hours annually by 2015 through contributions from both the Customer-Sited Tier and the Main Tier. This consists of approximately 9.8 million MWh from the Main Tier and 0.6 million MWh from the Customer-Sited Tier.

Additionally, several program design features have been incorporated into the RPS to support the ultimate program goal of transitioning to the Voluntary Market. The Voluntary Market offers consumers the opportunity to increase their use of renewable resources on a voluntary basis, through electing to purchase additional power from clean, renewable sources by selecting that option on their electricity bill.

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Q: How is the RPS funded and how does it impact my energy bill?

A: In order to implement the RPS Program, NYSERDA receives funds collected from ratepayers by the State's major privately-owned electric utilities such as National Grid or New York State Electric and Gas. These funds, collected as part of a transparent "System Benefits/RPS Charge," on the delivery portion of electricity bills help to pay for energy efficiency, low income assistance, and the RPS. The RPS portion of this charge was approximately $2.87 in 2007 for a typical residential customer and $30.24 for a typical non-residential customer. For a homeowner, this comes out to just under 25 cents per monthly billing cycle to support the RPS program. View the current RPS surcharge rates by utility by selecting "Statements."Link opens in new window - close new window to return to this page.

If you receive your electricity from a municipal utility, the New York Power Authority or the Long Island Power Authority, you are exempt from the System Benefits/RPS Charge. However, the Public Service Commission has encouraged these electricity utilities to adopt similar programs.

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Q: What makes the New York State RPS unique?

A: Rather than require each utility to supply a certain percentage of renewable electricity to their customers, New York's program uses a "central procurement administrator" (NYSERDA) to ensure renewable electricity is supplied to those consumers who pay the System Benefits/RPS Charge. This approach is funded through a transparent fixed charge on consumer's electricity delivery bills and has successfully spurred investments in renewable generation within the State.

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Q: How much electricity in New York is generated from renewable energy sources today?

A: As of December 2010, about 22 percent of New York's electricity came from operating renewable electric generating facilities - that means more than one in five households in NYS are powered with clean, renewable electricity. Here's the detailed breakdown:

  • Hydropower - 18.6 percent
  • Wind - 1.9 percent
  • Biomass - 0.4 percent
  • Landfill Gas - 1.2 percent

Read more about the Department of Energy (DOE), Energy Information Administration's profile for New York StateThis page opens in a new window..

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Q: Does the Public Service Commission (PSC) have plans to reassess the New York State RPS anytime soon?

A: In 2009 the Public Service Commission ("PSC") undertook a comprehensive mid-course review of the existing Renewable Portfolio Standard ("RPS") program and goals. Subsequently, the PSC expanded the RPS goal to increase the proportion of renewable electricity consumed by New Yorkers from 25 percent to 30 percent and extended the terminal year of the program from 2013 to 2015.

In concluding its mid-course review of the RPS Program, the Commission issued two orders in April 2010 regarding the RPS program. These orders established new Customer-Sited-Tier (CST) program goals; authorized a new CST program aimed at encouraging geographic balance; added Solar Thermal energy systems as an eligible technology under the CST; authorized funding to achieve overall program goals by 2015; directed the development of a Customer-Sited Tier Operating Plan [PDF]; established the scope and cost of the administration of the RPS program; and reaffirmed the role of the New York State Energy Research and Development Authority ("NYSERDA") as the administrator of the program.

The next program review is scheduled for 2013.

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Q: Will achieving the RPS create jobs and positive economic impacts in the state?

A: Economic benefits accrue from the planning, development, construction, and operation of renewable energy facilities. These economic benefits come in the form of long and short term jobs, property tax or payment-in-lieu of tax benefits to local governments and school districts, biomass fuel purchases, as well as from lease and/or royalty payments to landowners. For example, as verified by the independent program evaluation contractors as part of the 2009 mid-course program evaluation, the facilities selected in the first three solicitations are expected to yield approximately $2.1 billion dollars over the 20-year life of the facilities in direct economic benefits measured in jobs, taxes and local payments, in-state purchases, biomass fuel purchases, and land leases. When the effects induced on the broader economy are considered, the total economic benefits are estimated at more than $4.2 billion.

For more information on the economic impacts of the RPS and renewable energy visit: Economic Benefits Resources.

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Q: How do I know what my current electricity sources are?

A: As of April 2000, all utilities are required to tell their customers twice a year exactly how their electricity is being generated. Take a look at your energy bill, and you'll see details about your electricity's sources- including the percentage of your total energy consumption that comes from renewables. This information, known technically as an "environmental disclosure label" should confirm that your contribution really does make a difference. (The most current label is available on the DPS websiteThis page opens in a new window..)

We're moving closer to our target of 30 percent renewables every day. And you, as a ratepayer, help us get there.