New York State Department of Public Service Issues Guidelines for Energy Service Companies Offering Renewable Electric Products

Strategic Insights -

The New York State Department of Public Service has issued a document outlining the requirements for energy service companies (ESCOs) offering renewable electric products to residential and small non-residential customers. The document, aimed at ensuring compliance with the state's renewable energy standards, specifies that ESCOs must offer products with a renewable mix at least 50% greater than their current Renewable Energy Standard (RES) obligation.

ESCOs may satisfy this 50% obligation by purchasing Renewable Energy Credits (RECs) from eligible renewable generators, purchasing Tier 1 RECs from the New York State Energy Research and Development Authority (NYSERDA), procuring RECs from eligible renewable generators through bilateral contracts, making Alternative Compliance Payments (ACPs) to NYSERDA, or entering into bundled energy and REC purchase agreements with eligible renewable generators. ESCOs must also provide transparency of information and disclosures to customers regarding pricing and commodity sourcing.

The Department of Public Service Staff is soliciting information on renewable product offerings from ESCOs to track compliance with these requirements. Companies offering green electric products must provide specified information by March 1, 2022, including total NY load for Compliance Year 2021, committed LSE Voluntary Percentage of Load, and total voluntary renewable retail load.

Key Takeaways:

  • Energy Service Companies (ESCOs) in New York must offer renewable electric products with a renewable mix at least 50% greater than their current Renewable Energy Standard (RES) obligation.
  • ESCOs may satisfy this requirement by purchasing Renewable Energy Credits (RECs), purchasing Tier 1 RECs from NYSERDA, or making Alternative Compliance Payments (ACPs) to NYSERDA.
  • ESCOs must provide transparency of information and disclosures to customers regarding pricing and commodity sourcing.
  • Companies offering green electric products must provide specified information to the Department of Public Service by March 1, 2022.
  • Escos will be able to purchase additional RECs to back their total green load through the end of the 2021 program year and trading period on June 30, 2022.
  • The Department of Public Service will track compliance with the Order's requirements for renewable electric products and identify any shortfalls in RECs purchased by each company.
  • Companies that purchase shortfalls in RECs will be required to purchase Voluntary Compliance Payments (VCPs) from NYSERDA.

Statistics:

  • The 2021 Alternative Compliance Payment (ACP) price is $23.79.
  • The 2022 ACP price is $35.00.
  • ESCOs may satisfy the 50% renewable mix requirement by purchasing RECs through New York Generation Attribution Tracking System (NYGATS), purchasing Tier 1 RECs from NYSERDA, or procuring RECs through bilateral contracts.

Sources:

  • New York State Department of Public Service document, issued December 12, 2019 in Case 15-M-0127, et al. (Order).
  • New York State Department of Public Service document, issued in Matter Number 18-01893.