The 2002 State Energy Plan warned of the possible consequences of New York's heavy dependence on fossil fuels. The Energy Plan noted that the State's fossil fuel resources (gas, coal, oil) are largely imported from abroad or out-of-state, have significant long-term negative environmental impacts, and face ultimate depletion. Recognizing the need for a proactive approach to the State's energy and environmental challenges, in February of 2003, the New York State Public Service Commission ("Commission") initiated a proceeding to explore the development of a Renewable Portfolio Standard. On September 24, 2004, following an extensive stakeholder process, the Commission issued an Order adopting an RPS, with a goal of increasing the proportion of renewable energy used by New York consumers from the then-current 19.3 percent (baseline resources) to at least 25 percent by the end of 2013.
As part of the September 24, 2004 Order, the Commission designated NYSERDA as the central procurement administrator for the RPS Program. In doing so, the Commission noted an expectation that voluntary renewable purchases by retail customers (the Voluntary Market) would contribute at least 1% toward the 25 percent goal, thus leaving baseline resources, State Agencies' purchases under Executive Order 111 (EO 111), and NYSERDA procurements to realize the remaining 24 percent. In the same Order, the Commission directed the major investor-owned utilities to collect funds from ratepayers to be administered by NYSERDA for the purpose of supporting NYSERDA's implementation responsibilities.
During 2009, the Commission undertook a planned mid-course review of the RPS program and its goals. In anticipation of this mid-course review, in early 2009 NYSERDA prepared and submitted an Evaluation Report [PDF]. Two technical conferences were held by the Commission to explore the issues raised by the Department of Public Service staff in response to the Evaluation Report. Subsequently, in early 2010, the Public Service Commission expanded the RPS goal to increase the proportion of renewable electricity consumed by New York customers from 25 percent to 30 percent and extended the terminal year of the program from 2013 to 2015, thus formalizing a goal set by Governor Paterson, and reaffirmed in the 2009 State Energy Plan. These changes to the RPS program targets reflect the State's continued commitment to support the development of various renewable energy technologies, and will help achieve New York's '45 by 15' clean energy goals.
In concluding its mid-course review of the RPS Program, the Commission issued two Orders in April 2010 regarding the RPS program. Therein the Commission:
- Established new CST program goals for the previously approved CST technologies (photovoltaic (PV), fuel cell, anaerobic gas-to-electric digester technologies (ADG), and on-site wind installations) to help support the overall RPS program target of 30 percent by 2015;
- Authorized a new CST program aimed at encouraging additional customer-sited installations in the downstate region (NYISO Zones G, H, I and J);
- Authorized a new CST program focused solely on the deployment of solar thermal energy systems;
- Authorized funding through the full compliance period for the overall RPS program, inclusive of new CST programs and program administration that it determined to be sufficient to achieve overall program goals by 2015
- Directed NYSERDA to consult with the DPS on the development of a Customer-Sited Tier Operating Plan ("Plan") for solicitation of customer-sited renewable resources, and provided the parameters and principles that were to be incorporated therein;
- Established the scope and cost of the administration of the RPS program, reaffirmed NYSERDA's role as central procurement authority, and provided for the augmented and extended collection of costs from electric delivery customers to fully achieve NYSERDA's 2015 targets.
Orders issued by the Commission in November and December of 2010 made additional significant programmatic modifications to the Main Tier portion of the RPS. These orders expanded the biomass eligible resources category to include the use of clean wood separated from construction and demolition debris at approved material reclamation facilities; modified the RPS eligibility rules to allow “behind-the-meter,” facilities, including facilities where the electric energy is delivered through a wholesale meter under the control of a utility, public authority, or municipal electric company to compete for Main Tier RPS incentives; reaffirmed the weighting of economic benefits at 30% in the competitive selection process, while relaxing former incremental economic benefits requirements to allow all claims of in state spending after January 1, 2003; and authorized NYSERDA to conduct future Main Tier competitive solicitations at least annually, in consultation with DPS Staff.
In a September 2011 Order issued by the Commission authorized NYSERDA to (a) re-allocate unencumbered 2010 Customer Sited Tier program funds so that such unused funds remained available for additional projects for 2011 in the same technology category from which they originated, except for $900,000 in unencumbered solar thermal funds that were re-allocated to fund a Solar Thermal awareness and outreach campaign during 2011 through 2013; (b) exceed the $2 million cumulative monthly cap on incentive payments in the Solar Electric (PV) category in a manner that only funds reallocated from 2010 may be used in excess of the cap; (c) modify the equipment size cap for the on-site wind category from 600 kW per installation to 2 MW per installation; and (d) use accumulated Case 03-E-0188 unencumbered interest earnings and unencumbered administration funds to pay any New York State Cost Recovery Fee amount that exceeds the amount previously budgeted for such fee. Quality assurance and quality control expenses continue to be paid using Program Administration account funds.
2013 State Energy Planning
The New York State Energy Plan will develop analyses and policy recommendations to guide the State in reliably meeting its future energy needs in a cost-effective and sustainable manner while fostering an innovative clean energy economy. In September 2009, a law was passed that statutorily establishes the State Energy Planning Board and calls on that Board to complete a State Energy Plan on or before March 15, 2013.
Benefits to New York
NYSERDA estimates that the 30 renewable energy projects from the first three Main Tier solicitations, supported under the RPS program, could generate more than $2.0 billion of in-state economic benefits over their 20-year expected economic life. These benefits are expected to come in the form of new trade and professional jobs, new property tax revenues to local taxing jurisdictions, royalty payments to landowners, purchases of construction materials and equipment rentals, and various other economic benefits. This estimate of benefits excludes consideration of economic spill-over affects associated with increased local income and increased property tax revenues. View the November 2008 report on the estimated economic benefits of the NYRPS at NYSERDA Main Tier Renewable Portfolio Standard Economic Benefits Report [PDF].
Along with the expected economic benefits resulting from the RPS investments, New York will enjoy cleaner air from the operation of these new renewable resources.
New York State's Unique Renewable Portfolio Standards
Many states around the country have enacted renewable portfolio standards with similar goals to New York’s RPS. 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. In most other states with RPS programs, the renewable energy percentage target is implemented by requiring the local delivery utilities to supply their customers with a certain percentage of electricity from renewable sources. New York’s RPS program uses a central procurement model, with NYSERDA as the central procurement administrator. NYSERDA does not procure renewable electricity directly. Rather, NYSERDA pays a production incentive to renewable electricity generators selected through competitive solicitations for the electricity they deliver for end use in New York. In exchange for receiving the production incentive, the renewable generator transfers to NYSERDA all rights and/or claims to the RPS Attributes associated with each MWh of renewable electricity generated, and guarantees delivery of the associated electricity to the New York State ratepayers.
One RPS Attribute is created by the production and delivery into New York’s wholesale electricity market of one MWh of electricity by an eligible RPS resource. RPS Attributes include any and all reductions in harmful pollutants and emissions, such as carbon dioxide and oxides of sulfur and nitrogen. By acquiring the RPS Attributes, rather than the associated electricity, the RPS program ensures that increasing amounts of renewable electricity will be injected into the State’s power system, while minimizing interference with the State’s competitive wholesale power markets.
Read more about the Renewable Portfolio Standards of other states.