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S00023 Summary:

Relates to maintaining the continued viability of the state's existing large-scale, renewable energy resources.
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S00023 Actions:

02/27/20191ST REPORT CAL.167
02/28/20192ND REPORT CAL.
03/06/2019referred to ways and means
06/20/2019substituted for a4294
06/20/2019ordered to third reading rules cal.639
06/20/2019passed assembly
06/20/2019returned to senate
12/13/2019VETOED MEMO.204
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S00023 Committee Votes:

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S00023 Floor Votes:

DATE:06/21/2019Assembly Vote  YEA/NAY: 130/11
AbinantiYCrouchYGarbarinoYLupardoYPheffer AmatoYSimotasY
BarnwellYDe La RosaYGriffinYMcDonoughERRaiaYSteckY
BenedettoERDickensYHevesiYMiller B YReillyYTagueNO
BichotteYDilanERHunterYMiller MGYReyesYTaylorY
BlakeYDinowitzYHyndmanYMiller MLYRichardsonYThieleY
BronsonYEnglebrightYJohnsYNiouYRosenthal D YWalkerY
BuchwaldYEpsteinYJonesYNolanERRosenthal L YWallaceY
CookYGalefYLiftonYPeoples-StokesERSeawrightYMr. SpeakerY

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S00023 Text:

                STATE OF NEW YORK
                               2019-2020 Regular Sessions
                    IN SENATE
                                     January 9, 2019
        Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
          printed to be committed to the Committee on  Energy  and  Telecommuni-
        AN ACT in relation to maintaining the continued viability of the state's
          existing large-scale, renewable energy resources

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Legislative findings and  intent.  The  legislature  hereby
     2  finds and determines:
     3    1. New York is a national leader in developing and implementing policy
     4  to  promote the development of renewable energy resources, the growth of
     5  which has significantly benefited the state in numerous ways,  including
     6  through  reductions  in  pollutants  that  contribute to climate change,
     7  associated reductions in adverse impacts on public health, and  substan-
     8  tial job growth in the clean energy sector.
     9    2.  In  2016,  more  than  twenty percent of the state's electric load
    10  (representing 2,354 gigawatt hours) was supplied by renewable  resources
    11  - solar, wind, hydroelectric, biomass, fuel cells and similar resources.
    12  To  further promote and incentivize the development of renewable energy,
    13  the New York state public  service  commission  recently  established  a
    14  clean  energy standard requiring, among other things, that fifty percent
    15  of the electric load in  the  state  be  served  entirely  by  renewable
    16  resources by the year 2030 (i.e., 50 by 30 target).
    17    3.  A  recent  study  shows  that  New  York's clean energy sector now
    18  employs more than 85,000 workers at more than 7,500 business  establish-
    19  ments  spread  out  across  the  state, in both the renewable energy and
    20  energy efficiency sectors. With implementation of the clean energy stan-
    21  dard, clean energy jobs are anticipated to grow by more than six percent
    22  per year or double the growth rate of the entire United  States  economy
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 23                               2
     1  in  2016. Proper implementation of the clean energy standard will ensure
     2  that the state meets these job growth projections.
     3    4.  To promote achievement of the clean energy standard, and to ensure
     4  the continued job growth and other benefits attendant to a clean  energy
     5  economy, New York needs to assure that its existing large-scale, renewa-
     6  ble  energy sector is provided with adequate price signals and financial
     7  incentives to remain in operation and to  sell  their  renewable  energy
     8  attributes in New York, allowing the state to count the resources toward
     9  the  50  by  30 target and retain the jobs and tax payments supported by
    10  these generators. Absent these assurances, it would be difficult if  not
    11  impossible for the state to meet the recently established target.
    12    5.  New  York's  ability  to  meet  the  clean energy standard will be
    13  hampered if such  existing  resources  provide  their  wholesale  energy
    14  products  for  delivery  to  adjacent states, some of which have enacted
    15  laws that provide for a robust market that provides a stronger  opportu-
    16  nity  to sell renewable energy attributes than is currently available in
    17  New York. There is a real and present danger that a significant  portion
    18  of  New York's existing fleet of large-scale, renewable energy resources
    19  will participate in the programs offered by these other states and  thus
    20  will not be available for consideration in terms of meeting the 50 by 30
    21  target,  and  compete  effectively  with  other renewable classes in the
    22  clean energy standard.
    23    6. It also is of paramount importance to ensure the fuel diversity  of
    24  the state's energy sector for the purposes of providing energy security,
    25  system  reliability  and  protection  of  consumers from potential price
    26  spikes or shortages. For this same reason, it is important for the state
    27  to take measures to ensure the continued viability and competitive posi-
    28  tion of a wide variety of large-scale, renewable energy resources in the
    29  state.
    30    7. Accordingly, the overlying intent of this act is to provide  exist-
    31  ing  large-scale,  renewable  energy  resources  in  New York state with
    32  appropriate financial incentives to continue operations for the foresee-
    33  able future.
    34    § 2. Definitions.  1. "Large-scale, renewable energy  resource"  means
    35  an  electric  generating facility that:  (a) sells its energy within the
    36  New York control area with a generating  capacity  of  25  kilowatts  or
    37  more;  (b)  is deemed an eligible technology type pursuant to Appendix A
    38  of the "Order Adopting a Clean Energy Standard"  and,  in  the  case  of
    39  hydropower,  has  a  generating  capacity less than 50 megawatts; (c) is
    40  physically located within the jurisdiction of the New  York  independent
    41  system  operator;  and (d) the associated energy is delivered in accord-
    42  ance with a New York delivery requirement as described in section  three
    43  of this act.
    44    2. "Eligible large-scale, renewable energy resource" means an existing
    45  large-scale, renewable energy resource that: (a) at the time in question
    46  is  not  under  a contract for the sale of renewable energy credits with
    47  the New York state energy research and development authority pursuant to
    48  the renewable portfolio standard main tier, maintenance tier or  custom-
    49  sited  tier  program or clean energy standard tier 1 program implemented
    50  by such authority; (b) is not under an existing  contract  for  sale  of
    51  renewable  energy  credits with a load serving entity; and (c) is other-
    52  wise found by the New York state energy research and development author-
    53  ity to meet deliverability requirements specified in  section  three  of
    54  this  act,  and  other eligibility requirements specified in subdivision
    55  one of this section.

        S. 23                               3
     1    3. "Qualified independent party" shall have the meaning given  to  the
     2  term in the New York Generation Attribute Tracking System (NYGATS) oper-
     3  ating rules promulgated by the New York state energy research and devel-
     4  opment authority.
     5    4. "Load serving entity" or "load serving entities" means and includes
     6  all  investor-owned distribution utilities (in their capacity as commod-
     7  ity suppliers), energy service companies, community  choice  aggregation
     8  programs  not  served  by  energy service companies, municipal utilities
     9  under the jurisdiction of the  public  service  commission,  and  retail
    10  customers  that  self-supply with electricity through the New York inde-
    11  pendent system operator.
    12    5. "Renewable energy credit" means  a  tradable,  non-tangible  energy
    13  commodity  that represents proof that 1 megawatt-hour (MWh) of electric-
    14  ity was generated from a renewable energy resource. To be  eligible  for
    15  sale  in  New York state and to meet the procurement obligations of load
    16  serving entities, each renewable energy credit must be  registered  with
    17  the New York generation attribute tracking systems.
    18    6.  "Tier  1"  means  the program designated as tier 1 pursuant to the
    19  clean energy standard order.
    20    7. "Tier 2 renewable energy credit" refers to a renewable energy cred-
    21  it generated by an eligible large-scale, renewable energy resource.
    22    8. "Order adopting a clean energy standard" means the  public  service
    23  commission  order dated August 1, 2016, and entered in case number 15-E-
    24  0302 et seq.
    25    § 3. Deliverability. Energy from an  eligible  large-scale,  renewable
    26  energy resource shall be deemed to comply with the New York deliverabil-
    27  ity  requirement  if  either it is: (a) delivered into a market adminis-
    28  tered by the New York independent system operator  for  end-use  in  New
    29  York state; (b) delivered through a wholesale meter under the control of
    30  a  utility,  public authority or municipal electric company such that it
    31  can be measured, and such that consumption within New York state can  be
    32  tracked  and  verified  by  such  entity  or by the New York independent
    33  system operator; or (c) delivered to a customer in New York state, where
    34  such delivery shall be subject to independent verification  by  the  New
    35  York  state  energy  research  and  development authority or a qualified
    36  independent party.
    37    § 4. Program for eligible  large-scale,  renewable  energy  resources.
    38  Notwithstanding  any  other provision of law to the contrary, including,
    39  but not limited to, any order, rule or regulation  promulgated  pursuant
    40  to  the public service law, the public authorities law, and/or the state
    41  administrative procedure act, the public service commission, in  consul-
    42  tation  with the New York state energy research and development authori-
    43  ty, shall adopt a program within 120 days of the effective date of  this
    44  act, to provide support to and for eligible large-scale, renewable ener-
    45  gy  resources  through  a  market for tier 2 renewable energy credits as
    46  defined herein to ensure the continued viability of eligible  large-sca-
    47  le, renewable energy resources for the purpose of meeting the state's 50
    48  by  30 target. In developing such program, the public service commission
    49  shall create an obligation on load serving entities to purchase  tier  2
    50  renewable  energy  credits  from  eligible large-scale, renewable energy
    51  resources through a process and requirements as fully described below:
    52    1. Annual targets for tier 2  renewable  energy  credits.  The  public
    53  service  commission  shall  provide  annual targets and mandates for the
    54  acquisition of tier 2 renewable energy credits by load serving  entities
    55  for the years 2019 to 2030 that ensures market demand for tier 2 renewa-
    56  ble  energy  credits for all resources that become eligible large-scale,

        S. 23                               4
     1  renewable energy resources during such timeframe for purposes of achiev-
     2  ing the 50 by 30 target. The targets to be  established  by  the  public
     3  service  commission  should  reflect  the  quantity  of renewable energy
     4  generation  that  is  serving  total  electric  load  in New York state,
     5  excluding generation from facilities owned by the power authority of the
     6  state of New York and excluding hydropower from generators with a capac-
     7  ity greater than 50 megawatts.
     8    2. Load serving entities' tier 2 renewable energy  credit  obligation.
     9  Each  load  serving  entity shall be responsible for acquiring a defined
    10  quantity of tier 2 renewable energy credits based upon the total tier  2
    11  load  serving  entity  obligation  target  allocated to all load serving
    12  entities proportional to the  load  each  serves;  i.e.,  determined  by
    13  multiplying each load serving entity's actual load for the prior year by
    14  the  percentage  GWh  target  for  that  year. The New York state energy
    15  research and development authority shall publish each load serving enti-
    16  ty's annual obligation for each annual compliance period on its  website
    17  or  by  other  appropriate  means by December 1 of the year prior to the
    18  year such published annual obligation shall apply.
    19    3. Tier 2 renewable energy credit price. By each December 1  prior  to
    20  the annual compliance period, the public service commission shall estab-
    21  lish  a  tier 2 renewable energy credit price to be set at 75 percent of
    22  the weighted average cost per renewable energy credit that the New  York
    23  state  energy research and development authority paid to acquire renewa-
    24  ble energy credits from resources under the clean energy standard tier 1
    25  program in the prior calendar year.
    26    4. Financial hardship. Those eligible  large-scale,  renewable  energy
    27  resources for which the tier 2 renewable energy credit price is insuffi-
    28  cient  may  seek additional financial assistance from the New York state
    29  energy research and development authority  through  contracts  having  a
    30  minimum  duration of ten years for the purpose of ensuring the continued
    31  viability and availability of such resources toward meeting the 50 by 30
    32  target.  The New York state energy research  and  development  authority
    33  shall  apply  the  following  criteria in determining the eligibility of
    34  such eligible large-scale, renewable energy resources  to  receive  such
    35  financial assistance, which shall be paid as an increment above the tier
    36  2 renewable energy credit price determined pursuant to subdivision three
    37  of this section:
    38    (a) A showing of financial hardship;
    39    (b) The basis for and reasonableness of expected operating and capital
    40  costs.  This evaluation may include, among other things, a comparison to
    41  prior years' costs and a comparison to costs of like generation;
    42    (c) The existence of any other cash sources available  to  the  large-
    43  scale, renewable energy resource, such as: (i) tax benefits; (ii) subsi-
    44  dies;  (iii)  contracts; and (iv) other sources, including restructuring
    45  financing;
    46    (d) Whether market rules are increasing the costs of the  large-scale,
    47  renewable  energy resource and, if so, whether any steps can be taken to
    48  reduce such costs;
    49    (e) Whether the large-scale, renewable energy resource's real property
    50  tax assessment is consistent with the assessments imposed  in  similarly
    51  situated facilities elsewhere, and if not, what action has been taken to
    52  address such assessment;
    53    (f)  Whether the large-scale, renewable energy resource is required to
    54  operate as part of a package of assets that is financially viable  as  a
    55  whole;

        S. 23                               5
     1    (g)  Whether  the  large-scale,  renewable  energy  resource generates
     2  enough revenue, based on expected output, to cover its  operating  costs
     3  and enjoy a reasonable return;
     4    (h)  Whether  the generation facility generates enough revenue to make
     5  necessary capital improvements;
     6    (i) Whether  the  large-scale,  renewable  energy  resource  generates
     7  enough  revenue  to  cover its fixed costs, including: (i) debt service;
     8  (ii) property taxes; (iii) security costs; and (iv) other costs;
     9    (j) Whether the large-scale, renewable energy resource  has  attempted
    10  to make use of other renewables programs available to it, such as volun-
    11  tary green markets; and
    12    (k)  The regional economic importance of the resource. This evaluation
    13  may include job creation and retention, regional spending for  fuel  and
    14  other  goods and services, contribution to local tax base, fuel diversi-
    15  ty, greenhouse gas reduction, enhanced  forest  health,  flood  control,
    16  municipal  water  supply,  ecological stewardship and other non-economic
    17  factors on a region-specific basis.  Any contract entered into  with  an
    18  eligible  large-scale, renewable energy resource pursuant to this subdi-
    19  vision shall include a reasonable return, and take the form of  a  fixed
    20  price  increment  to  the  tier 2 renewable energy credit price that the
    21  generator is receiving  from  a  load  serving  entity  or  a  financial
    22  contract  for  differences to adjust based on fluctuations in the tier 2
    23  renewable energy credit price. The totality of all  increments  provided
    24  to resources pursuant to this subdivision shall be recovered from deliv-
    25  ery  customers in the same manner as in the renewable portfolio standard
    26  program maintenance tier.
    27    5. Procedures.  To  implement  the  tier  2  renewable  energy  credit
    28  program,  the public service commission shall also adopt within 120 days
    29  of the effective date of this act the following procedures  and  related
    30  requirements:
    31    (a)  The public service commission shall establish procedures consist-
    32  ent with the procedures developed under the clean energy standard tier 1
    33  program to determine the eligibility of  large-scale,  renewable  energy
    34  resources to participate in the program adopted pursuant to this act and
    35  to  certify  such  eligible large-scale, renewable energy resources. All
    36  resources that have previously been found by the New York  state  energy
    37  research and development authority to meet the eligibility and delivera-
    38  bility  requirements  in force under the renewable portfolio standard or
    39  clean energy standard programs shall be deemed to meet  eligibility  and
    40  deliverability requirements of this act.
    41    (b) The public service commission, with the assistance of the New York
    42  state  energy research and development authority, shall develop an equi-
    43  table process by which load serving entities acquire  tier  2  renewable
    44  energy  credits  from  eligible large-scale, renewable energy resources,
    45  which may include the designation of the New York state energy  research
    46  and  development  authority as the central procurement entity for tier 2
    47  renewable energy credits, whereby the New York state energy research and
    48  development authority would ensure the registration of all tier 2 renew-
    49  able energy resources from generators in New York  generation  attribute
    50  tracking systems, purchase the required targeted amount of tier 2 renew-
    51  able  energy credits, and re-sell the tier 2 renewable energy credits to
    52  load serving entities on an annual basis in order  to  facilitate  their
    53  collective efficient compliance. The public service commission, with the
    54  assistance of the New York state energy research and development author-
    55  ity,  shall also develop and implement protocols in the event that there
    56  is an oversupply or undersupply  of  tier  2  renewable  energy  credits

        S. 23                               6

     1  offered  for  sale, relative to the tier 2 renewable energy credit obli-
     2  gation applied to the load serving entities, provided that the protocols
     3  should recognize and prioritize the realization of economic benefits  in
     4  New York from generators located in New York.
     5    (c)  The  public  service commission shall develop procedures by which
     6  eligible large-scale, renewable energy resources  may  obtain  contracts
     7  from  the New York state energy research and development authority under
     8  subdivision four of this section in accordance with the requirements  of
     9  the  state  administrative  procedure  act.  Such procedures shall, on a
    10  case-by-case basis, authorize  eligible  large-scale,  renewable  energy
    11  resources  to  petition  the  public service commission for a finding of
    12  financial hardship, which finding shall be based  upon  a  determination
    13  that  the  established  tier  2  renewable  energy credits determined in
    14  accordance with subdivision three of this section  are  insufficient  to
    15  ensure  the  viability  of  the  resource. The public service commission
    16  shall make a final decision with respect to  such  contract  within  120
    17  days after a hardship petition is received.
    18    (d)  Each  load  serving  entity shall demonstrate compliance with the
    19  requirements of this section through an annual compliance filing  pursu-
    20  ant  to  a  process established by the public service commission that is
    21  consistent with the compliance filing requirements established  pursuant
    22  to the tier 1 program.
    23    § 5. This act shall take effect immediately.
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