Back to Tier 4 – New York City Renewable Energy

Tier 4 Program: Solicitation, Contract Awards and Program History

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. CHPE provides renewable energy to New York City via a new high-voltage direct current (HVDC) transmission line.

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.

Tier 4 2021 Solicitation (Closed)

Summary

The Public Service Commission’s October 15, 2020 Order (CES Modification Order) [PDF] established a new Tier 4 within the Clean Energy Standard (CES). In response to the CES Modification Order, NYSERDA issued a request for proposals (RFP) 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, two recommended contracts were approved by the PSC in April 2022 for the Clean Path NY (CPNY) and Champlain Hudson Power Express (CHPE) Projects that will deliver wind, solar, and hydropower to New York City.

The Tier 4 competitive solicitation was launched to bring new renewable energy into New York City, a region with limited local clean energy resources. Through this process, NYSERDA selected projects that could deliver firm, clean electricity via new transmission infrastructure to help meet the State’s climate and reliability goals.

Tier 4 Solicitation Eligibility

Tier 4 was 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.

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.

Step Two: Bid 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 provided 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. Public versions of the materials submitted under the Tier 4 solicitation can be found linked below.

NYSERDA conducted extensive outreach during the solicitation process. NYSERDA also hosted a webinar for interested Tier 4 Proposers [PDF] on Monday, May 3, 2021, from 11:30 a.m. – 12:30 p.m. ET. Final responses to submitted questions [PDF] and the slides presented during the May 3, 2021 Webinar [PDF] are available. Questions submitted during the Webinar are included in the posted responses.

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 also posted a 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.

Tier 4 Contract Awards

After a thorough vetting and scoring process, in September 2021 two contracts were recommended – the Clean Path NY project (CPNY) and the Champlain Hudson Power Express project (CHPE). Contracts were negotiated for both projects and 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 Tier 4 contracts by Order of April 14, 2022 [PDF] and Amendment 1 [PDF] on May 13, 2022.

The Tier 4 Implementation Plan [PDF] describes how Tier 4 RECs are administered through NYGATS, the tracking system used to record electricity generated, imported, and consumed within New York State. The Implementation Plan provides the administrative framework for minting Tier 4 RECs, tracking eligible renewable energy attributes, and supporting the purchase and sale of RECs statewide, including Tier 4.

Contract Termination

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. Both parties actively engaged in good faith discussions regarding the disposition of the contract security, as stipulated in the terms of the original agreement. The parties have entered into an agreement under which NYSERDA will hold the contract security and release it back to Clean Path NY, if and when, the transmission line is built; and certain metrics are met regarding clean energy generation and energy delivery into New York City. If the transmission line is not built, the entire contract security will be permanently retained by NYSERDA.

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