About Tier 4

New York’s Commitment to Clean Energy

Climate change presents a real, grave challenge to our planet, and New York State has committed to taking action through comprehensive legislation.

In 2019, the historic Climate Leadership and Community Protection Act (Climate Act) was signed into law, requiring the State to achieve a 100 percent zero-emission electricity system by 2040 and an 85 percent reduction in greenhouse gas emissions below 1990 levels by 2050, setting a new standard for states and the nation to expedite the transition to a clean energy economy. The law mandates that at least 70 percent of New York's electricity come from renewable energy sources by 2030.

Greening New York’s City

New York’s Climate Act goals necessitate the state shed its fossil-fuel dependency. Consuming approximately one-third of the New York State’s annual electric consumption, New York City’s power originates from nearly 90 percent fossil fuels, despite abundant renewable energy statewide. Without displacing a substantial portion of the fossil fuel-fired generation currently operating within New York City, the statewide 70 percent renewable energy by 2030 goal will be difficult to achieve.

As New York State moves forward with bold plans to implement the Climate Act’s Final Scoping Plan, it is critical that sufficient transmission capacity is available to deliver clean energy, especially to New York City. 

What is Tier 4?

To tackle this challenge, the New York State Public Service Commission (PSC) approved a new first‐of‐its‐kind program known as Tier 4, aimed at addressing the imbalance of renewable energy access within the State’s grid. This program, administered by the New York State Energy Research and Development Authority (NYSERDA), procures renewable energy attributes in the form of Tier 4 Renewable Energy Certificates (RECs) which are tied to the delivery of renewable generation in New York City. Tier 4 is an innovative approach to supporting the development of transmission infrastructure at the state level while also providing clean energy to the State’s most challenging load center.

Establishing the Tier 4 Program

Tier 4 was established by The Public Service Commission’s October 15, 2020 Order [PDF] in response to NYSERDA’s Clean Energy Standard White Paper [PDF] with a goal to increase the penetration of renewable energy into New York City (NYISO Zone J).

NYSERDA issued a Tier 4 solicitation in January 2021.

After a thorough project evaluation and negotiation process, two contract awards were recommended – the Clean Path NY project (CPNY) and the Champlain Hudson Power Express project (CHPE).

The Public Service Commission approved the contracts by Order of April 14, 2022 [PDF], subject to limited contract clarification and similar requirements as laid out in the Order. These projects will deliver wind, solar, and hydropower to New York City via new high-voltage direct current (HVDC) transmission lines.

On November 27, 2024, NYSERDA and the developers of CPNY mutually agreed to terminate the project’s Renewable Energy Certificate (REC) Purchase and Sale Agreement.

Implementation Plan

NYSERDA does not purchase energy; it procures clean energy’s renewable energy attributes called Renewable Energy Credits (RECs) that are created through the delivery of clean energy on a per-Megawatt hour (MWh) basis.

The Tier 4 Implementation Plan describes the administration of Tier 4 RECs in The New York Generation Attribute Tracking System (NYGATS), an online certificate-tracking system that records information about electricity generated, imported, and consumed within New York State. NYGATS will mint the Tier 4 RECs and administer the purchase and sale of RECs statewide, including Tier 4.

Under the Tier 4 contract, the Champlain Hudson Power Express will deliver renewable energy to New York City (NYISO Zone J) thereby creating Tier 4 RECs that will be purchased by NYSERDA. Tier 4 RECs will also be available for purchase through sale agreements, such as with New York City, and a voluntary sale process that will help defray the program cost.

The Tier 4 program is a complex and entirely new component of New York’s clean energy strategy that requires hourly matching of the generation, delivery, and renewable energy attributes, in order to create Tier RECs. NYSERDA is responsible for ensuring that Hydro-Quebec’s export of clean energy and its environmental attributes or RECs, are verified with the delivery of clean energy over the CHPE line into Zone J on an hourly basis. Only once the eligible energy production, delivery and its associated environmental attributes have been verified will Tier 4 RECs be created and procured by NYSERDA.

Payment for Renewable Energy Credits will only commence after the Tier 4 project has completed construction and is delivering power to New York City.