FAQs for Load Serving Entities

NYSERDA will update frequently asked questions (FAQs) about ZECs and RECs periodically.


2017 NYSERDA Tier 1 Renewable Energy Credits (RECs) FAQs

  1. How is a Load Serving Entity (LSE) 2017 RES compliance obligation calculated?

The obligation of each LSE will be determined as a function of the actual load served by that LSE during the 2017 compliance period (January 1 through December 31, 2017). Once final load data for the Compliance Period has been reported to the New York Generation Attribute Tracking System (NYGATS), each LSE’s RES obligation will be determined by multiplying the LSE’s actual load served by the Compliance Obligation Percentage of 0.035%. To meet its compliance obligation, the LSE must acquire RECs or purchase Alternative Compliance Payments in combined amounts that equal that number.

Final load data will be available approximately five months after end of the compliance period. This topic is discussed in Section 5 of the Phase 1 Implementation PlanLink opens in new window - close new window to return to this page. [PDF] filed on October 31, 2016.

The load data for each LSE provided by NYSERDA via email on November 1, 2016 represents the load served by that LSE during the 12-month period between April 1, 2015 and March 31, 2016 (the “base year”) as compiled by the Department of Public Service Office of Clean Energy. This base year load number was necessary for NYSERDA to calculate the minimum right of first refusal amount for each LSE, and may provide a useful reference point regarding the LSE's potential 2017 obligation. The LSE’s actual Tier 1 RES compliance obligation will be based on the LSE’s actual load during the 2017 Compliance Period.

The Public Service Commission's August 1, 2016 Order Adopting a Clean Energy StandardLink opens in new window - close new window to return to this page. [PDF] stated that the Renewable Energy Standard (RES) would be determined by multiplying the LSE’s actual load served in the Compliance Period times the Compliance Obligation Percentage.  Originally 0.6%, the Department of Public Service updated this percentage in a November 17, 2016 Order Providing Clarification to 0.035% of actual load. As an example:

LSE XYZ Actual Load for 2017 Compliance Period (January 1, 2017 through December 31, 2017) - MWh:

1,000,000

RES Tier 1 Compliance Obligation Percent: 0.035%
LSE XYZ Tier 1 Compliance Obligation for 2017 Compliance Period: 350

In a Notice Soliciting CommentsLink opens in new window - close new window to return to this page. [PDF] issued on September 12, 2016 in response to a Petition for ClarificationLink opens in new window - close new window to return to this page. [PDF] filed by NYSERDA on August 25, 2016, the Public Service Commission (PSC) requested comments on how new renewable resources from NY-Sun and other Customer-Sited Tier projects are to be counted towards the compliance obligation. On November 17, 2016, DPS issued an Order Providing Clarification that stated that new renewable resources from NY-SUN and other Customer-Sited Tier projects are to be counted toward the overall CES goal but that these resources are not intended to be included in the amount of renewable energy the LSEs are mandated to procure from NYSERDA in 2017.   

The REC obligation is separate from any obligation on LSEs to encourage Zero-Carbon Emitting generation under the ZEC program.  Please see ZEC Frequently Asked Questions section for more information on the ZEC program.

  1. Do the 56,142 RECs that NYSERDA is offering for sale represent the total obligation of all LSEs for 2017?

If the statewide load in 2017 is equal to the statewide load during the base year, it is anticipated that the 56,142 and the overall compliance requirement will approximate each other. 

NYSERDA is offering each LSE a “right of first refusal” election opportunity to purchase a minimum of their proportional share of the total eligible 2017 Tier 1 RECs expected to be available from prior NYSERDA RPS Main Tier procurements. The minimum amount is determined by the proportion of the total statewide load served by the LSE during the base year (as described above). That right of first refusal must be exercised by December 1, 2016. As an example, an LSE that served 10% of the total statewide load during the base year will have a right of first refusal for 10% of the NYSERDA Tier 1 RECS:

NYSERDA Tier 1 RECs available for purchase:

56,142

LSE XYZ Load Share Ratio for base year (April 1, 2015 through March 31, 2016): 10%
Minimum number of Tier 1 RECs to be made available to LSE XYZ by NYSERDA: 5,614
  1. Does the amount of RECs NYSERDA has offered to sell an LSE equal to the LSE’s entire 2017 REC Compliance Obligation?

Maybe. Purchasing the minimum allocation may only represent a portion of an LSE’s 2017 RES compliance obligation, as the minimum allocation is intended to be an estimate as it reflects the compliance obligation percent times the base year (April 1, 2015 through March 31, 2016) load. The actual 2017 RES compliance obligation will reflect an LSE’s January 1, 2017 through December 31, 2017 load. If an LSE that elects to purchase its minimum “right of first refusal” quantity of RECs from NYSERDA, and that serves the same amount of load in 2017, should expect to be very close to compliance. If an LSE’s 2017 load differs from the base year load, the compliance obligation will be different. Please see question 1 for a more detailed description of the process.

  1. What are the terms and conditions of the REC Agreement?

On November 17, 2016 the Department of Public Service issued an Order Approving Standardized Agreements in the CES, including the Agreement for the Sale of Renewable Energy Certificates from NYSERDA to LSEs.  DPS has ordered that all LSEs are to provide NYSERDA with an executed copy of the REC standard contract agreement by December 19, 2016.  NYSERDA has posted the Standard Renewable Energy Credit Purchase Agreement on the REC and ZEC Purchases from NYSERDA page.  NYSERDA recommends reviewing the Agreement as it contains important information regarding payment and delivery schedules. 

  1. What happens if NYSERDA is unable to provide the quantity of RECs it has agreed to sell to an LSE?

If an LSE has a contract with NYSERDA, demonstrated by a confirmation, and NYSREDA is unable to deliver the Contract Quantity, Alternative Compliance Payments will be made to NYSERDA at the same price that would have been paid for the undelivered RECs.  For example, for any portion of the Contract Quantity that NYSERDA fails to deliver, an LSE will not need to pay the ACP Price of $23.28 and will instead pay the REC price of $21.16. 

  1. We would like to buy more than the minimum REC Quantity Available that NYSERDA indicated, can we do that? 

An LSE may order more than the minimum, but to ensure equity among LSEs, NYSERDA will only guarantee the minimum at this time. If some LSEs elect not to purchase the minimum quantity, and other LSEs order more than their minimum, NYSERDA will first fulfill all LSE orders for the minimum, and then allocate the rest proportionally to those who have expressed an interest in purchasing more than the minimum.

  1. If NYSERDA does not ultimately have enough RECs to satisfy all LSEs’ compliance obligations, what are other sources of RECs that are available from which an LSE can purchase the balance of their compliance obligation? 

An LSE may achieve RES compliance in any of three ways:

    1. LSEs may purchase Tier 1 RECs from NYSERDA;
      • The Commission directed NYSERDA to conduct Tier 1 REC procurement solicitations at least once annually.
    2. Self-Supply: LSEs may enter into agreements, including long-term power purchase agreements (PPAs), with renewable energy resources to procure Tier 1 RECs; and
    3. LSEs may pay an alternative compliance payment (ACP).

LSEs may pursue any combination of these three strategies, i.e. an LSE may choose to purchase a quantity of RECs from NYSERDA while also purchasing Tier 1 eligible RECs from other sources. If an LSE is unsuccessful in acquiring a sufficient quantity of RECs the LSE can complete its compliance by making ACPs, as substitutes for RECs, in an amount sufficient to fulfill the compliance obligation shortfall. Each LSE will need to determine the best approach to demonstrate compliance.

Regarding the second, self-supply option, NYSERDA is now in the ongoing process of certifying facilities and recording their RECs as Tier 1 eligible in NYGATS as detailed in the Phase 1 Implementation PlanLink opens in new window - close new window to return to this page. [PDF] field on March 24, 2017. LSEs and/or eligible facilities can post an interest to transact RECs on the NYGATS Bulletin Board.

An LSE that has purchased RECs from NYSERDA in an amount that exceeds the LSE’s actual compliance requirement for 2017 may sell RECs it purchased from NYSERDA back to NYSERDA. NYSERDA has proposed that LSEs be permitted to “bank” RECs not needed for compliance for use in future years.  NYSERDA expects the PSC to rule on the banking opportunity in the near future.   

  1. My LSE had no load in the base year ending March 31, 2016. Will I still need to comply?

Any LSE that serves load during the 2017 compliance year will have the obligation to comply by acquiring RECs or paying ACPs. As described above, the actual obligation of an LSE will be calculated at the end of the 2017 compliance period after final load numbers for the 2017 Compliance Period are available. The base year load numbers NYSERDA has provided to each LSE via email are each LSE’s baseline load for the most recent period that is available (April 1, 2015 – March 31, 2016). If an LSE has load in the 2017 compliance period of January 1 through December 31, 2017 but showed zero load in the baseline year, the LSE will still have a compliance obligation for 2017.

  1. Can RECs be produced and procured from adjacent control areas?

Yes. In order to count towards an LSE’s RES Tier 1 compliance obligation, the RECs must be tagged as eligible New York Tier 1 2017 RECs in NYGATS. These RECs may be produced in other control areas so long as they are deemed eligible according to the resource and delivery requirements established in the August 1, 2016 Commission OrderLink opens in new window - close new window to return to this page. [PDF]. The Phase 1 Implementation PlanLink opens in new window - close new window to return to this page. [PDF], filed March 24, 2017 has more details on geographic eligibility for Tier 1 resources.

  1. Why would an LSE prefer to pay an ACP instead of purchasing RECs?

An LSE may prefer to pay ACPs instead of purchasing eligible New York 2017 Tier 1 RECs for administrative simplicity.  However, the ACP price for 2017 has been established at a price 10% higher than NYSERDA’s Tier 1 REC sales price.

  1. How does an LSE demonstrate compliance with this obligation?

Eligible Tier 1 RECs procured towards compliance with the annual obligation must be held in the LSE's NYGATS account. Tier 1 RECs that are used to demonstrate compliance are subsequently retired and no longer available in NYGATS. Please review Section 5 of the Phase 1 Implementation PlanLink opens in new window - close new window to return to this page. [PDF], filed March 24, 2017 for details on demonstration of compliance with the RES program.

  1. When is 2017 compliance due?

As described in the Phase 1 Implementation PlanLink opens in new window - close new window to return to this page. [PDF], filed March 24, 2017, NYGATS will generate a compliance year RES compliance report, containing the actual compliance obligation and Tier 1 REC balances in the LSE's NYGATS account in July following the compliance year. This compliance report and an ACP report, if applicable, will be submitted to NYSERDA for the RES program within 30 days of the final report becoming available.

  1. Are there reports released by NYGATS showing qualified Tier 1 RES resources?

At this time there is no NYGATS Tier 1 resources report. The process for certification of eligible facilities was described in the Phase 1 Implementation PlanLink opens in new window - close new window to return to this page. [PDF], filed March 24, 2017. Once the certification process is approved by the PSC, NYSERDA will begin certifying facilities. Following certification, NYGATS will be updated and such reports will be available.

  1. Are there any 2016 Tier 1 RECs available?

Only 2017 Tier 1 RECs will count toward the 2017 obligation. Banked 2017 Tier 1 RECs may count toward future obligations, subject to banking rules adopted under future PSC Orders.

Contact

If your REC-related question is not on this page, email ces@nyserda.ny.gov.

2017 NYSERDA Zero-Emissions Credits (ZEC) and ZEC Sales FAQs

  1. How is a Load Serving Entity (LSE) ZEC compliance obligation calculated?

Each LSE’s ZEC compliance obligation is determined based on a calculation of the annual load share ratio for the LSE multiplied by the total number of ZECs purchased by NYSERDA during that compliance period.

The obligation of each LSE will be determined based on the actual load served by that LSE from April 1, 2017 through March 31, 2018 (ZEC compliance period). The Department of Public Service has stated that load will be calculated without losses (wholesale).  Final load data will be available approximately five months after end of the compliance period (approximately September 1). Once final load data for the ZEC compliance period has been reported to the New York Generation Attribute Tracking System (NYGATS), each LSE’s ZEC obligation will be determined using each LSE’s actual load share (the LSE’s load during the ZEC compliance period divided by the total New York State load during the ZEC compliance period). To meet its compliance obligation, the LSE must acquire ZECs from NYSERDA in an amount that equals its ratio of the statewide load multiplied by the total number of ZECs purchased by NYSERDA during that compliance period.

The ZEC obligation is separate from any obligation on LSEs to encourage generation utilizing renewable resources under the Renewable Energy Standard (RES). For more information on RES, please see RES Frequently Asked Questions.

  1. How did NYSERDA calculate each LSE’s projected ZEC compliance amount?

In December 2016, NYSERDA communicated with each LSE via email regarding a projected ZEC compliance amount using each LSE’s load served during a 12-month reference period between May 1, 2015 and April 30, 2016 (the “base year”) as compiled by the New York State Department of Public Service’s Office of Clean Energy, who used NYISO data to determine the load. This base year load number was necessary for NYSERDA to calculate an estimated ZEC compliance obligation. As described above, the LSE’s actual Tier 1 ZEC compliance obligation will be based on the LSE’s actual load during the ZEC compliance period and the total number of ZECs generated in that compliance period.

An example of the projected ZEC compliance calculation is provided below:

LSE XYZ Actual Load for Reference Period (April 1, 2017 through March 31, 2018) (MWh) 10,000,000
LSE’s Load Share percentage for Reference Period 10%
Maximum Available ZECs to be purchased by NYSERDA during first Compliance Year – page 145 of the Order Adopting a CES 27,618,000/year
LSE XYZ Projected ZEC Compliance Obligation for first Compliance Period 2,761,800/year
  1. Will the amount of ZECs that NYSERDA will initially sell an LSE during the first Compliance Period equal an LSE’s 2017 ZEC Compliance Obligation?

Maybe, but probably not. The amount of ZECs that each LSE is projected to need and will purchase from NYSERDA is an estimate based on historic load. The actual 2017 ZEC compliance obligation will reflect an LSE’s actual April 1, 2017 through March 31, 2018 load and the actual ZEC purchases by NYSERDA during the same period. If an LSE’s actual load differs from the forecasted load for the ZEC compliance period, or if the actual ZEC purchases by NYSERDA differ, the LES’s compliance obligation will be different.

  1. Can LSEs return unneeded ZECs to NYSERDA?

The Commission ordered that any unneeded ZECs should be returned to NYSERDA at the price the LSE paid. For the first Compliance Period, NYSERDA will accept excess ZECs and refund the LSE a price of $17.54 per ZEC.

  1. What are the terms and conditions of the ZEC Agreement?

On November 17, 2016, the Public Service Commission issued an Order Approving Standardized Agreements in the CESLink opens in new window - close new window to return to this page. [PDF], including the Agreement for the Sale of Zero-Emissions Energy Certificates from NYSERDA to LSEs. The Order required all LSEs to provide NYSERDA with an executed copy of the ZEC standard contract agreement by December 19, 2016. NYSERDA posted the Standard Zero-Emissions Energy Certificate Purchase Agreement [PDF] on its webpage. NYSERDA recommends reviewing the Agreement carefully as it contains important information regarding payment and delivery schedules.

  1. My LSE had no load in the base year ending April 30, 2016. Will I still need to comply?

Any LSE that serves load during a compliance year will have the obligation to comply with the ZEC obligation. As described above, the actual obligation of an LSE will be calculated at the end of the 2017 ZEC compliance period. If an LSE has load in the 2017 compliance period of April 1, 2017 through March 31, 2018 but showed zero load in the reference year, the LSE will still have a ZEC compliance obligation for the compliance period.

  1. When is 2017 ZEC compliance due?

As described in the Phase 1 Implementation Plan filed jointly by DPS and NYSERDA on October 31, 2016, NYGATS will generate a ZEC compliance year report, containing the actual ZEC compliance obligation and ZEC balances in the LSE's NYGATS account. Annual compliance filings will be made to NYSERDA no later than 30 calendar days after the final compliance reports for the compliance period are generated by NYGATS.

Contact

If your ZEC-related question is not on this page, email ces@nyserda.ny.gov.