Tier 4 – New York City Renewable Energy

The Public Service Commission’s October 15, 2020 Order [PDF] (CES Modification Order) established a new Tier 4 within the Clean Energy Standard (CES) in response to NYSERDA’s CES White Paper [PDF]. The new Tier 4 will increase the penetration of renewable energy into New York City (NYISO Zone J), which is particularly dependent on polluting fossil fuel-fired generation.

In response to the CES Modification Order, NYSERDA issued a Tier 4 solicitation in January 2021.

The solicitation generated robust competition, including seven different projects with 35 total alternative bid variants. After a thorough vetting and scoring process, Governor Kathy Hochul announced two recommended contract awards in September 2021 – the Clean Path NY project (CPNY) and the Champlain Hudson Power Express project (CHPE). These projects will deliver wind, solar, and hydropower to New York City.

The contracts were submitted to the Public Service Commission for approval and public comment on November 30, 2021. The contracts for CHPE [PDF] and CPNY [PDF] and the accompanying Petition [PDF] are available on the Department of Public Service’s website under Case Number 15-E-0302. The Public Service Commission approved the contracts by Order of April 14, 2022, subject to limited contract clarification and similar requirements as laid out in the Order [PDF] .

These transformational renewable energy and transmission projects are expected to deliver close to $6 billion in overall net societal benefits statewide, inclusive of greenhouse gas reductions and air quality improvements, and over $8 billion in economic development, including investments in disadvantaged communities.

As the largest transmission projects contracted in New York State in the last 50 years, these projects will reduce New York City’s fossil fuel use for electricity by more than 80 percent in 2030 when combined with the State’s deployment of clean energy and offshore wind. These projects accelerate progress to exceed New York's goal for 70 percent of the State's electricity to come from renewable sources by 2030 on the path to a zero-emission grid as outlined in the Climate Leadership and Community Protection Act (Climate Act).

The projects also help the City of New York (the City) achieve its ambitious climate goals. The City confirmed they will join in these landmark awards, helping to make the scale of these projects possible while creating the opportunity to reduce the cost impact of these projects. NYSERDA and the City have entered into a contract [PDF] under which the City will purchase Tier 4 RECs for its yearly electric load beyond the purchase of its proportional share of offshore wind renewable energy certificate (OREC)-supported offshore wind.

NYSERDA will also offer Tier 4 RECs generated by these projects for voluntary purchase, finally enabling the many New York City organizations with interest in switching to clean energy, but who have been unable to do so on-site due to practical constraints, to go one hundred percent renewable with confidence.

NYSERDA payments will commence for each respective project only once the project has obtained all required permits and local approvals, has completed construction, and is delivering power to New York City, which is expected to begin in 2025 for the permitted CHPE project and 2027 for the CPNY project.

New York State map of wind, solar, and hydroelectric projects

Downstate New York map of delivery stations at Astoria Energy Complex and Rainey

To learn more about these projects, view the Fact Sheet [PDF]

Implementation Plan

NYSERDA will file a Tier 4 implementation plan for stakeholder comment and Commission approval. The plan will include a description of the Tier 4 compliance obligation calculations, process and structure, as well as a Tier 4 standard purchase agreement.

Tier 4 2021 Solicitation (Closed)

Tier 4 - Solicitation

In response to the CES Modification Order, NYSERDA issued a request for proposals (RFP) in January 2021 for renewable energy projects that are located in or deliver energy to Zone J. The solicitation generated robust competition, including seven different projects with 35 total alternative bid variants. After a thorough vetting and scoring process, Governor Kathy Hochul announced two recommended contract awards in September 2021 for the Clean Path NY (CPNY) and Champlain Hudson Power Express (CHPE) Projects that will deliver wind, solar, and hydropower to New York City.

Eligibility

Tier 4 is open to the following renewable energy systems: solar thermal, photovoltaics, on-land wind, hydroelectric, geothermal electric, geothermal ground source heat, tidal energy, wave energy, ocean thermal, and fuel cells which do not utilize a fossil fuel resource in the process of generating electricity. To be compensated under Tier 4, the resource must either be located in Zone J or delivered to Zone J over a new transmission interconnection (that electrically connects after October 15, 2020). Non-hydropower renewables must achieve commercial operation after October 15, 2020 to be eligible for Tier 4. Hydropower resources must be existing or already under construction as of June 18, 2020.

Offshore wind RECs will be procured separately from Tier 4 resources. Behind-the-meter resources are not eligible under Tier 4.

Tier 4 – Step One Eligibility Response

NYSERDA’s Tier 4 RFP solicitation garnered a significant level of competitive interest from the private market. NYSERDA received 18 Tier 4 Step One Eligibility Applications, from 14 proposers representing:

A total of nearly 57 million annual megawatt hours of renewable energy – the equivalent of powering 8 million New York homes; and
Nearly 14,000 megawatts of new transmission capacity, more than four times the maximum quantity sought through the solicitation.

Tier 4 – Step Two Bid Submission Response

In response to New York’s Tier 4 solicitation, NYSERDA received bids from seven proposers for seven projects with 35 alternative configurations representing:

A total of over 35 million megawatt hours of renewable energy per year – the equivalent of powering five million homes; and
Nearly 7,500 megawatts of new renewable transmission capacity – nearly five times the capacity sought through the solicitation.

The strong response provides the robust competition needed to responsibly deliver renewable electricity to New York City and unlock significant benefits, including greenhouse gas reduction and improved air quality while spurring significant private sector investment and job creation.

Schedule

The schedule for T4RFP21-1 was as follows (all times ET):

T4RFP21-1 Release Date	January 13, 2021
Deadline for Notice of Intent to Propose	January 21, 2021
Proposers’ Webinar [PDF]	January 28, 2021
Deadline for submitting written questions on Step One	February 4, 2021
NYSERDA posts responses to Step One questions [PDF]	February 11, 2021
Deadline for Step One Eligibility Application and Hydropower Baseline Data	February 16, 2021, 3:00 pm
NYSERDA posts responses to Step Two questions [PDF]	April 5, 2021
NYSERDA provides Final Baseline Determination	No later than April 12, 2021
NYSERDA Portal Opens to register for account	April 14, 2021
Portal opens for Step Two Proposal submission	April 30, 2021
Proposer's Webinar [PDF]	May 3, 2021 11:30 am ET
Deadline for submitting written questions on Step Two	May 3, 2021
NYSERDA posts responses to Step Two questions [PDF]	May 7, 2021
Deadline to Register for NYSERDA Portal	May 10, 2021
Deadline for Step Two Proposal Submission	May 12, 2021, 3:00 pm
Petition and Contracts Submitted to PSC	November 30, 2021
Comment Period Closed	March 7, 2022
PSC Decision	April 14, 2022

T4RFP21-1 and Appendices (Closed)

Communications and Updates regarding the RFP

Per RFP Section 1.12, Clean Path New York LLC. notified NYSERDA [PDF] of a change to their Step 2 Proposal for the Clean Path New York Project of the site of the Zone J converter station from land adjacent to the Bronx Terminal Market to a new industrial location in Zone J. An updated version of the Public Proposal Narrative [PDF] and Appendices [PDF] have been posted to NYSERDA’s Tier 4 website.

NYSERDA posted the final responses to submitted questions [PDF] and the slides presented during the May 3, 2021 Webinar [PDF] on May 7, 2021. Questions submitted during the Webinar are included in the posted responses.

NYSERDA hosted a webinar for interested Tier 4 Proposers [PDF] on Monday, May 3, 2021, from 11:30 a.m. – 12:30 p.m. ET.

An update [PDF] to the Tier 4 RFP was posted on March 29, 2021.

The first set of responses to submitted questions under Step 2 [PDF] was posted on April 5, 2021. The responses were updated on a rolling basis until May 7, 2021.

NYSERDA has posted Summary of Received ITC Comments [PDF] regarding whether the Tier 4 RFP should be amended to introduce a new provision in the Tier 4 Agreement that would share the benefits of any newly- enacted ITC or other direct financial support that would apply to transmission facilities associated with Tier 4 Proposals. Comments were due and received on April 9, 2021.