S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7275
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 17, 2017
                                ___________
 
 Introduced  by M. of A. JENNE -- read once and referred to the Committee
   on Energy
 
 AN ACT in relation to maintaining the continued viability of the state's
   existing large-scale renewable energy resources through the  implemen-
   tation of a tier 2 renewable energy credit

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative findings and declaration. The legislature here-
 by finds and declares that:
   1. New York is a national leader in developing and implementing policy
 to promote the development of renewable energy resources, the growth  of
 which  has significantly benefited the state in numerous ways, including
 through reductions in pollutants  that  contribute  to  climate  change,
 associated  reductions in adverse impacts on public health, and substan-
 tial job growth in the clean energy sector.
   2. In 2016, more than twenty percent of  the  state's  electric  load,
 representing  2,354  gigawatt hours, was supplied by renewable resources
 such as: solar; wind; hydroelectric; biomass;  fuel  cells  and  similar
 resources. To further promote and incentivize the development of renewa-
 ble energy, the New York state public service commission recently estab-
 lished a clean energy standard requiring, among other things, that fifty
 percent  of the electric load in the state be served entirely by renewa-
 ble resources by the year 2030, hereinafter the 50 by 30 goal.
   3. A recent study shows  that  New  York's  clean  energy  sector  now
 employs  more than 85,000 workers at more than 7,500 business establish-
 ments spread out across the state, in  both  the  renewable  energy  and
 energy efficiency sectors. With implementation of the clean energy stan-
 dard,  clean  energy jobs are anticipated to grow by more than 6 percent
 per year or double the growth rate of the entire United  States  economy
 in  2016. Proper implementation of the clean energy standard will ensure
 that the state meets these job growth projections.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10514-01-7

 A. 7275                             2
 
   4. To promote achievement of the clean energy standard, and to  ensure
 the  continued job growth and other benefits attendant to a clean energy
 economy, New York needs to ensure that its existing large-scale  renewa-
 ble  energy sector is provided with adequate price signals and financial
 incentives  to  remain  in  operation and to sell their renewable energy
 attributes in New York, allowing the state to count the resources toward
 the 50 by 30 goal and retain the jobs  and  tax  payments  supported  by
 these  generators. Absent these assurances, it would be difficult if not
 impossible for the state to meet the recently established goal.
   5. New York's ability to  meet  the  clean  energy  standard  will  be
 hampered  if  such  existing  resources  provide  their wholesale energy
 products for delivery to adjacent states, some  of  which  have  enacted
 laws  that provide for a robust market that provides a stronger opportu-
 nity to sell renewable energy attributes than is currently available  in
 New  York. There is a real and present danger that a significant portion
 of New York's existing fleet of large-scale renewable  energy  resources
 will  participate in the programs offered by these other states and thus
 will not be available for consideration in terms of meeting the 50 by 30
 goal, and may compete with other renewable classes in the  clean  energy
 standard.
   6.  It also is of paramount importance to ensure the fuel diversity of
 the state's energy sector, for the purposes of providing energy  securi-
 ty,  system reliability and protection of consumers from potential price
 spikes or shortages. For this same reason, it is important for the state
 to take measures to ensure the continued viability and competitive posi-
 tion of a wide variety of large-scale renewable energy resources in  the
 state.
   7.  Accordingly, the overlying intent of this act is to provide exist-
 ing large-scale renewable energy resources in New York state with appro-
 priate financial incentives to continue operations for  the  foreseeable
 future.
   § 2. Definitions.
   1.  "Large-scale renewable energy resource" means an electric generat-
 ing facility that:
   (a) sells its energy in the wholesale markets operated by the New York
 independent system operator;
   (b) is deemed an eligible technology type pursuant to  appendix  A  of
 the  clean  energy  standard  order  as defined in subdivision 3 of this
 section, and in the case of hydropower, has a generating capacity  fewer
 than 50 megawatts;
   (c)  is  physically  located  within  the jurisdiction of the New York
 independent system operator; and
   (d) the associated energy is delivered in accordance with a  New  York
 delivery requirement as described in section 3 of this act.
   2.  "Eligible large-scale renewable energy resource" means an existing
 large-scale renewable energy resource that:
   (a) at the time in question is not under a contract for  the  sale  of
 renewable  energy  credits  with  the New York state energy research and
 development authority pursuant to the renewable portfolio standard  main
 tier or maintenance tier program or clean energy standard tier 1 program
 implemented by such authority;
   (b)  is  not  under  an existing contract for sale of renewable energy
 credits with a load servicing entity; and
   (c) is otherwise found by New York state energy research and  develop-
 ment  authority to meet deliverability requirements specified in section

 A. 7275                             3
 
 3 of this act, and other eligibility requirements specified in  subdivi-
 sion 1 of this section.
   3.  "Clean  energy  standard  order"  means the order adopting a clean
 energy standard dated August 1, 2016, and entered in case no.  15-E-0302
 et seq.
   4.  "Load  serving  entities"  means  and  includes all investor-owned
 distribution utilities in their capacity as commodity suppliers,  energy
 service companies or community choice aggregation programs not served by
 energy  service companies, municipal utilities under the jurisdiction of
 the public service commission, and  retail  customers  that  self-supply
 with electricity through the New York independent system operator.
   5.  "Renewable  energy  credit"  means a tradable, non-tangible energy
 commodity that represents proof that one  megawatt-hour  of  electricity
 was  generated from a renewable energy resource. To be eligible for sale
 in New York state and to meet the procurement obligations of load  serv-
 ing  entities,  each renewable energy credit must be registered with the
 New York generation attribute tracking system.
   6. "Tier 1" means the program designated as tier  1  pursuant  to  the
 clean energy standard order.
   7. "Tier 2 renewable energy credit" refers to a renewable energy cred-
 it generated by an eligible large-scale renewable energy resource pursu-
 ant to this act.
   §  3.  Deliverability.  Energy  from an eligible large-scale renewable
 energy resource shall be deemed to comply with the New York deliverabil-
 ity requirement if it is:
   1. delivered into a market administered by the  New  York  independent
 system operator for end-use in New York state;
   2. delivered through a wholesale meter under the control of a utility,
 public authority or municipal electric company such that it can be meas-
 ured, and such that consumption within New York state can be tracked and
 verified  by such entity or by the New York independent system operator;
 or
   3. delivered through a renewable energy resource dedicated  generation
 meter,  approved  by  and subject to independent verification by the New
 York state energy research and development authority, to a  customer  in
 New York state.
   § 4. Program for eligible large-scale renewable energy resources.
   1. Notwithstanding any other provision of law to the contrary, includ-
 ing but not limited to, any order, rule or regulation promulgated pursu-
 ant  to  the  public service law, the public authorities law, and/or the
 state administrative procedure act, the public  service  commission,  in
 consultation  with  the  New  York state energy research and development
 authority, shall adopt a program within 120 days of the  effective  date
 of this act, to provide support to eligible large-scale renewable energy
 resources  through  a  market  for  tier  2  renewable energy credits as
 defined in subdivision 5 of section 2 of this act to ensure the  contin-
 ued viability of eligible large-scale renewable energy resources for the
 purpose  of  meeting  the  state's  50  by  30  goal. In developing such
 program, the public service commission shall  create  an  obligation  on
 load servicing entities to purchase tier 2 renewable energy credits from
 eligible  large-scale  renewable  energy  resources  through the process
 described in subdivision 2 of this section:
   2. Tier 2 renewable energy credits. (a)  Annual  targets.  The  public
 service  commission  shall  provide  annual targets and mandates for the
 acquisition of tier 2 renewable energy credits by load  servicing  enti-
 ties  for  the  years  2017 to 2030 that ensure market demand for tier 2

 A. 7275                             4
 
 renewable energy credits for all resources that become  eligible  large-
 scale  renewable  energy resources during that timeframe for purposes of
 achieving the 50 by 30 goal. The targets to be established by the public
 service  commission  should  reflect  the  quantity  of renewable energy
 generation that is serving  total  electric  load  in  New  York  state,
 excluding  generation  from facilities owned by the New York state power
 and excluding hydropower from generators with a capacity greater than 50
 megawatts.
   (b) Credit obligations of load serving  entities.  Each  load  serving
 entity  shall  be responsible for acquiring a defined quantity of tier 2
 renewable energy credits based upon the total tier 2 load serving entity
 obligation target allocated to all load serving entities proportional to
 the load each serves; i.e., determined by multiplying each load  serving
 entity's  actual load for the prior year by the percentage gigawatt hour
 target for that year. The New York state energy research and development
 authority shall publish each load serving entity's annual obligation for
 each annual compliance period on its website  or  by  other  appropriate
 means by December first of each year.
   (c)  Price. Every December first preceding the annual compliance peri-
 od, the public service commission shall establish  a  tier  2  renewable
 energy credit price to be set at 75 percent of the weighted average cost
 per renewable energy credits that the New York state energy research and
 development  authority  paid  to  acquire  renewable energy credits from
 resources under the clean energy standard tier 1 program in the  preced-
 ing calendar year.
   (d)  Financial  hardship.  Those eligible large-scale renewable energy
 resources for which the tier 2 renewable energy credit price is insuffi-
 cient may seek additional financial assistance from the New  York  state
 energy  research  and  development  authority through contracts having a
 minimum duration of ten years for the purpose of ensuring the  continued
 viability and availability of such resources toward meeting the 50 by 30
 goal. The New York state energy research and development authority shall
 apply  the  following  criteria  in  determining the eligibility of such
 eligible large-scale renewable energy resources to receive  such  finan-
 cial  assistance,  which  shall be paid as an increment above the tier 2
 renewable energy credit price increment determined pursuant to  subdivi-
 sion (c) of this section.
   i. A showing of financial hardship.
   ii. The basis for and reasonableness of expected operating and capital
 costs.  This evaluation may include, among other things, a comparison to
 prior year's costs and a comparison to costs of like generation.
   iii. The existence of any other cash sources available to  the  large-
 scale  renewable  energy resource, such as: (A) tax benefits, (B) subsi-
 dies, (C) contracts, and  (D)  other  sources,  including  restructuring
 financing.
   iv.  Whether  market rules are increasing the costs of the large-scale
 renewable energy resource and, if so, whether any steps can be taken  to
 reduce such costs.
   v.  Whether  the large-scale renewable energy resource's real property
 tax assessment is consistent with the assessments imposed  in  similarly
 situated facilities elsewhere, and if not, what action has been taken to
 address such assessment.
   vi.  Whether  the large-scale renewable energy resource is required to
 operate as part of a package of assets that is financially viable  as  a
 whole.

 A. 7275                             5

   vii.  Whether  the  large-scale  renewable  energy  resource generates
 enough revenue, based on expected output, to cover its  operating  costs
 and enjoy a reasonable return.
   viii. Whether the generation facility generates enough revenue to make
 necessary capital improvements.
   ix. Whether the large-scale renewable energy resource generates enough
 revenue to cover its fixed costs, including: (A) debt service, (B) prop-
 erty taxes, (C) security costs, and (D) other costs.
   x.  Whether the large-scale renewable energy resource has attempted to
 make use of other renewable programs available to it, such as  voluntary
 green markets.
   xi. And, the regional economic importance of the resource. This evalu-
 ation may include job creation and retention, regional spending for fuel
 and  other  goods  and  services,  contribution  to local tax base, fuel
 diversity, greenhouse  gas  reduction,  enhanced  forest  health,  flood
 control, municipal water supply, ecological stewardship and other non-e-
 conomic factors on a region-specific basis.
   Any contract entered into with an eligible large-scale renewable ener-
 gy  resource  pursuant  to  this  subdivision shall include a reasonable
 return, and take the form of a fixed  price  increment  to  the  tier  2
 renewable  energy  credit  price  that the generator is receiving from a
 load serving entity or a financial contract for  differences  to  adjust
 based  on  fluctuations in the tier 2 renewable energy credit price. The
 totality of all increments provided to resources pursuant to this subdi-
 vision shall be recovered from delivery customers in the same manner  as
 in the RPS program maintenance tier.
   (e)  Procedures.  To  implement  the  tier  2  renewable energy credit
 program, the public service commission shall also adopt, within 120 days
 of the effective date of this act, the following procedures and  related
 requirements.
   i. The public service commission shall establish procedures consistent
 with  the  procedures  developed  under the clean energy standard tier 1
 program to determine the eligibility  of  large-scale  renewable  energy
 resources  to  participate  in the program adopted pursuant to this act,
 and to certify those eligible large-scale  renewable  energy  resources.
 All  resources  that  have  previously  been found by the New York state
 energy research and development authority to meet  the  eligibility  and
 deliverability  requirements  in  force  under the clean energy standard
 programs shall be deemed to meet eligibility and deliverability require-
 ments of this act.
   ii. The public service commission, with the assistance of the New York
 state energy research and development authority, shall develop an  equi-
 table  process  by  which load serving entities acquire tier 2 renewable
 energy credits from eligible  large-scale  renewable  energy  resources,
 which  may include the designation of the New York state energy research
 and development authority as the central procurement entity for  tier  2
 renewable energy credits, whereby the New York state energy research and
 development authority would ensure the registration of all tier 2 renew-
 able energy credits from generators in the New York generation attribute
 tracking system, purchase the required targeted amount of tier 2 renewa-
 ble  energy  credits, and re-sell the tier 2 renewable energy credits to
 load serving entities on an annual basis in order  to  facilitate  their
 collective efficient compliance. The public service commission, with the
 assistance of the New York state energy research and development author-
 ity,  shall also develop and implement protocols in the event that there
 is an oversupply or undersupply  of  tier  2  renewable  energy  credits

 A. 7275                             6
 
 offered  for  sale, relative to the tier 2 renewable energy credit obli-
 gation applied to the load serving entities, provided that the protocols
 should recognize and prioritize the realization of economic benefits  in
 New York from generators located in New York.
   iii.  The  public service commission shall develop procedures by which
 eligible large-scale renewable energy  resources  may  obtain  contracts
 from the New York state energy research and development authority pursu-
 ant  to  subdivision (d) of this section in accordance with the require-
 ments of the state administrative procedure act. Such procedures  shall,
 on a case-by-case basis, authorize eligible large-scale renewable energy
 resources  to  petition  the  public service commission for a finding of
 financial hardship, which finding shall be based  upon  a  determination
 that  the  established  tier  2  renewable  energy credits determined in
 accordance with subdivision (c)  of  this  section  is  insufficient  to
 ensure  the  viability  of  the  resource. The public service commission
 shall make a final decision with respect to  such  contract  within  120
 days after a hardship petition is received.
   iv.  Each  load  serving  entity shall demonstrate compliance with the
 requirements of this section through an annual compliance filing  pursu-
 ant  to  a  process established by the public service commission that is
 consistent with the compliance filing requirements established  pursuant
 to the tier 1 program.
   § 5. This act shall take effect immediately.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  7275--A
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 17, 2017
                                ___________
 
 Introduced  by  M.  of A. JENNE, HUNTER -- read once and referred to the
   Committee on Energy -- committee  discharged,  bill  amended,  ordered
   reprinted as amended and recommitted to said committee
 
 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:
 
   Section 1. Legislative findings and  intent.  The  legislature  hereby
 finds and determines:
   1. New York is a national leader in developing and implementing policy
 to  promote the development of renewable energy resources, the growth of
 which has significantly benefited the state in numerous ways,  including
 through  reductions  in  pollutants  that  contribute to climate change,
 associated reductions in adverse impacts on public health, and  substan-
 tial job growth in the clean energy sector.
   2.  In  2016,  more  than  twenty percent of the state's electric load
 (representing 2,354 gigawatt hours) was supplied by renewable  resources
 - solar, wind, hydroelectric, biomass, fuel cells and similar resources.
 To  further promote and incentivize the development of renewable energy,
 the New York state public  service  commission  recently  established  a
 clean  energy standard requiring, among other things, that fifty percent
 of the electric load in  the  state  be  served  entirely  by  renewable
 resources by the year 2030 (i.e., 50 by 30 target).
   3.  A  recent  study  shows  that  New  York's clean energy sector now
 employs more than 85,000 workers at more than 7,500 business  establish-
 ments  spread  out  across  the  state, in both the renewable energy and
 energy efficiency sectors. With implementation of the clean energy stan-
 dard, clean energy jobs are anticipated to grow by more than six percent
 per year or double the growth rate of the entire United  States  economy
 in  2016. Proper implementation of the clean energy standard will ensure
 that the state meets these job growth projections.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10514-02-7

 A. 7275--A                          2
 
   4. To promote achievement of the clean energy standard, and to  ensure
 the  continued job growth and other benefits attendant to a clean energy
 economy, New York needs to assure that its existing large-scale, renewa-
 ble energy sector is provided with adequate price signals and  financial
 incentives  to  remain  in  operation and to sell their renewable energy
 attributes in New York, allowing the state to count the resources toward
 the 50 by 30 target and retain the jobs and tax  payments  supported  by
 these  generators. Absent these assurances, it would be difficult if not
 impossible for the state to meet the recently established target.
   5. New York's ability to  meet  the  clean  energy  standard  will  be
 hampered  if  such  existing  resources  provide  their wholesale energy
 products for delivery to adjacent states, some  of  which  have  enacted
 laws  that provide for a robust market that provides a stronger opportu-
 nity to sell renewable energy attributes than is currently available  in
 New  York. There is a real and present danger that a significant portion
 of New York's existing fleet of large-scale, renewable energy  resources
 will  participate in the programs offered by these other states and thus
 will not be available for consideration in terms of meeting the 50 by 30
 target, and compete effectively with  other  renewable  classes  in  the
 clean energy standard.
   6.  It also is of paramount importance to ensure the fuel diversity of
 the state's energy sector for the purposes of providing energy security,
 system reliability and protection  of  consumers  from  potential  price
 spikes or shortages. For this same reason, it is important for the state
 to take measures to ensure the continued viability and competitive posi-
 tion of a wide variety of large-scale, renewable energy resources in the
 state.
   7.  Accordingly, the overlying intent of this act is to provide exist-
 ing large-scale, renewable energy  resources  in  New  York  state  with
 appropriate financial incentives to continue operations for the foresee-
 able future.
   §  2. Definitions.   1. "Large-scale, renewable energy resource" means
 an electric generating facility that:   (a)  sells  its  energy  in  the
 wholesale  markets operated by the New York independent system operator;
 (b) is deemed an eligible technology type pursuant to Appendix A of  the
 "Order Adopting a Clean Energy Standard" and, in the case of hydropower,
 has  a  generating  capacity  less  than 50 megawatts; (c) is physically
 located within the jurisdiction of the New York independent system oper-
 ator; and (d) the associated energy is delivered in  accordance  with  a
 New York delivery requirement as described in section three of this act.
   2. "Eligible large-scale, renewable energy resource" means an existing
 large-scale, renewable energy resource that: (a) at the time in question
 is  not  under  a contract for the sale of renewable energy credits with
 the New York state energy research and development authority pursuant to
 the renewable portfolio standard main tier or maintenance  tier  program
 or  clean  energy standard tier 1 program implemented by such authority;
 (b) is not under an existing contract for sale of renewable energy cred-
 its with a load serving entity; and (c) is otherwise found  by  the  New
 York  state  energy research and development authority to meet delivera-
 bility requirements specified in section three of this  act,  and  other
 eligibility requirements specified in subdivision one of this section.
   3. "Load serving entity" or "load serving entities" means and includes
 all  investor-owned distribution utilities (in their capacity as commod-
 ity suppliers), energy service companies, community  choice  aggregation
 programs  not  served  by  energy service companies, municipal utilities
 under the jurisdiction of the  public  service  commission,  and  retail

 A. 7275--A                          3

 customers  that  self-supply with electricity through the New York inde-
 pendent system operator.
   4.  "Renewable  energy  credit"  means a tradable, non-tangible energy
 commodity that represents proof that 1 megawatt-hour (MWh) of  electric-
 ity  was  generated from a renewable energy resource. To be eligible for
 sale in New York state and to meet the procurement obligations  of  load
 serving  entities,  each renewable energy credit must be registered with
 the New York generation attribute tracking systems.
   5. "Tier 1" means the program designated as tier  1  pursuant  to  the
 clean energy standard order.
   6. "Tier 2 renewable energy credit" refers to a renewable energy cred-
 it generated by an eligible large-scale, renewable energy resource.
   7.  "Order  adopting a clean energy standard" means the public service
 commission order dated August 1, 2016, and entered in case number  15-E-
 0302 et seq.
   §  3.  Deliverability.  Energy from an eligible large-scale, renewable
 energy resource shall be deemed to comply with the New York deliverabil-
 ity requirement if either it is: (a) delivered into  a  market  adminis-
 tered  by  the  New  York independent system operator for end-use in New
 York state; (b) delivered through a wholesale meter under the control of
 a utility, public authority or municipal electric company such  that  it
 can  be measured, and such that consumption within New York state can be
 tracked and verified by such entity  or  by  the  New  York  independent
 system  operator;  or  (c) delivered through a renewable energy resource
 dedicated generation meter,  approved  by  and  subject  to  independent
 verification  by  the  New  York  state  energy research and development
 authority, to a customer in New York state.
   § 4. Program for eligible  large-scale,  renewable  energy  resources.
 Notwithstanding  any  other provision of law to the contrary, including,
 but not limited to, any order, rule or regulation  promulgated  pursuant
 to  the public service law, the public authorities law, and/or the state
 administrative procedure act, the public service commission, in  consul-
 tation  with the New York state energy research and development authori-
 ty, shall adopt a program within 120 days of the effective date of  this
 act, to provide support to and for eligible large-scale, renewable ener-
 gy  resources  through  a  market for tier 2 renewable energy credits as
 defined herein to ensure the continued viability of eligible  large-sca-
 le, renewable energy resources for the purpose of meeting the state's 50
 by  30 target. In developing such program, the public service commission
 shall create an obligation on load serving entities to purchase  tier  2
 renewable  energy  credits  from  eligible large-scale, renewable energy
 resources through a process and requirements as fully described below:
   1. Annual targets for tier 2  renewable  energy  credits.  The  public
 service  commission  shall  provide  annual targets and mandates for the
 acquisition of tier 2 renewable energy credits by load serving  entities
 for the years 2017 to 2030 that ensures market demand for tier 2 renewa-
 ble  energy  credits for all resources that become eligible large-scale,
 renewable energy resources during such timeframe for purposes of achiev-
 ing the 50 by 30 target. The targets to be  established  by  the  public
 service  commission  should  reflect  the  quantity  of renewable energy
 generation that is serving  total  electric  load  in  New  York  state,
 excluding generation from facilities owned by the power authority of the
 state of New York and excluding hydropower from generators with a capac-
 ity greater than 50 megawatts.
   2.  Load  serving entities' tier 2 renewable energy credit obligation.
 Each load serving entity shall be responsible for  acquiring  a  defined

 A. 7275--A                          4
 
 quantity  of tier 2 renewable energy credits based upon the total tier 2
 load serving entity obligation target  allocated  to  all  load  serving
 entities  proportional  to  the  load  each  serves; i.e., determined by
 multiplying each load serving entity's actual load for the prior year by
 the  percentage  GWh  target  for  that  year. The New York state energy
 research and development authority shall publish each load serving enti-
 ty's annual obligation for each annual compliance period on its  website
 or  by  other  appropriate  means by December 1 of the year prior to the
 year such published annual obligation shall apply.
   3. Tier 2 renewable energy credit price. By each December 1  prior  to
 the annual compliance period, the public service commission shall estab-
 lish  a  tier 2 renewable energy credit price to be set at 75 percent of
 the weighted average cost per renewable energy credit that the New  York
 state  energy research and development authority paid to acquire renewa-
 ble energy credits from resources under the clean energy standard tier 1
 program in the prior calendar year.
   4. Financial hardship. Those eligible  large-scale,  renewable  energy
 resources for which the tier 2 renewable energy credit price is insuffi-
 cient  may  seek additional financial assistance from the New York state
 energy research and development authority  through  contracts  having  a
 minimum  duration of ten years for the purpose of ensuring the continued
 viability and availability of such resources toward meeting the 50 by 30
 target.  The New York state energy research  and  development  authority
 shall  apply  the  following  criteria in determining the eligibility of
 such eligible large-scale, renewable energy resources  to  receive  such
 financial assistance, which shall be paid as an increment above the tier
 2 renewable energy credit price determined pursuant to subdivision three
 of this section:
   (a) A showing of financial hardship;
   (b) The basis for and reasonableness of expected operating and capital
 costs.  This evaluation may include, among other things, a comparison to
 prior years' costs and a comparison to costs of like generation;
   (c) The existence of any other cash sources available  to  the  large-
 scale, renewable energy resource, such as: (i) tax benefits; (ii) subsi-
 dies;  (iii)  contracts; and (iv) other sources, including restructuring
 financing;
   (d) Whether market rules are increasing the costs of the  large-scale,
 renewable  energy resource and, if so, whether any steps can be taken to
 reduce such costs;
   (e) Whether the large-scale, renewable energy resource's real property
 tax assessment is consistent with the assessments imposed  in  similarly
 situated facilities elsewhere, and if not, what action has been taken to
 address such assessment;
   (f)  Whether the large-scale, renewable energy resource is required to
 operate as part of a package of assets that is financially viable  as  a
 whole;
   (g)  Whether  the  large-scale,  renewable  energy  resource generates
 enough revenue, based on expected output, to cover its  operating  costs
 and enjoy a reasonable return;
   (h)  Whether  the generation facility generates enough revenue to make
 necessary capital improvements;
   (i) Whether  the  large-scale,  renewable  energy  resource  generates
 enough  revenue  to  cover its fixed costs, including: (i) debt service;
 (ii) property taxes; (iii) security costs; and (iv) other costs;

 A. 7275--A                          5
 
   (j) Whether the large-scale, renewable energy resource  has  attempted
 to make use of other renewables programs available to it, such as volun-
 tary green markets; and
   (k)  The regional economic importance of the resource. This evaluation
 may include job creation and retention, regional spending for  fuel  and
 other  goods and services, contribution to local tax base, fuel diversi-
 ty, greenhouse gas reduction, enhanced  forest  health,  flood  control,
 municipal  water  supply,  ecological stewardship and other non-economic
 factors on a region-specific basis.  Any contract entered into  with  an
 eligible  large-scale, renewable energy resource pursuant to this subdi-
 vision shall include a reasonable return, and take the form of  a  fixed
 price  increment  to  the  tier 2 renewable energy credit price that the
 generator is receiving  from  a  load  serving  entity  or  a  financial
 contract  for  differences to adjust based on fluctuations in the tier 2
 renewable energy credit price. The totality of all  increments  provided
 to resources pursuant to this subdivision shall be recovered from deliv-
 ery  customers in the same manner as in the renewable portfolio standard
 program maintenance tier.
   5. Procedures.  To  implement  the  tier  2  renewable  energy  credit
 program,  the public service commission shall also adopt within 120 days
 of the effective date of this act the following procedures  and  related
 requirements:
   (a)  The public service commission shall establish procedures consist-
 ent with the procedures developed under the clean energy standard tier 1
 program to determine the eligibility of  large-scale,  renewable  energy
 resources to participate in the program adopted pursuant to this act and
 to  certify  such  eligible large-scale, renewable energy resources. All
 resources that have previously been found by the New York  state  energy
 research and development authority to meet the eligibility and delivera-
 bility  requirements  in force under the renewable portfolio standard or
 clean energy standard programs shall be deemed to meet  eligibility  and
 deliverability requirements of this act.
   (b) The public service commission, with the assistance of the New York
 state  energy research and development authority, shall develop an equi-
 table process by which load serving entities acquire  tier  2  renewable
 energy  credits  from  eligible large-scale, renewable energy resources,
 which may include the designation of the New York state energy  research
 and  development  authority as the central procurement entity for tier 2
 renewable energy credits, whereby the New York state energy research and
 development authority would ensure the registration of all tier 2 renew-
 able energy resources from generators in New York  generation  attribute
 tracking systems, purchase the required targeted amount of tier 2 renew-
 able  energy credits, and re-sell the tier 2 renewable energy credits to
 load serving entities on an annual basis in order  to  facilitate  their
 collective efficient compliance. The public service commission, with the
 assistance of the New York state energy research and development author-
 ity,  shall also develop and implement protocols in the event that there
 is an oversupply or undersupply  of  tier  2  renewable  energy  credits
 offered  for  sale, relative to the tier 2 renewable energy credit obli-
 gation applied to the load serving entities, provided that the protocols
 should recognize and prioritize the realization of economic benefits  in
 New York from generators located in New York.
   (c)  The  public  service commission shall develop procedures by which
 eligible large-scale, renewable energy resources  may  obtain  contracts
 from  the New York state energy research and development authority under
 subdivision four of this section in accordance with the requirements  of

 A. 7275--A                          6
 
 the  state  administrative  procedure  act.  Such procedures shall, on a
 case-by-case basis, authorize  eligible  large-scale,  renewable  energy
 resources  to  petition  the  public service commission for a finding of
 financial  hardship,  which  finding shall be based upon a determination
 that the established tier  2  renewable  energy  credits  determined  in
 accordance  with  subdivision  three of this section are insufficient to
 ensure the viability of the  resource.  The  public  service  commission
 shall  make  a  final  decision with respect to such contract within 120
 days after a hardship petition is received.
   (d) Each load serving entity shall  demonstrate  compliance  with  the
 requirements  of this section through an annual compliance filing pursu-
 ant to a process established by the public service  commission  that  is
 consistent  with the compliance filing requirements established pursuant
 to the tier 1 program.
   § 5. This act shall take effect immediately.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  7275--B
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 17, 2017
                                ___________
 
 Introduced  by  M.  of  A.  JENNE,  HUNTER, BLANKENBUSH, CRESPO, HARRIS,
   ORTIZ, L. ROSENTHAL, BLAKE -- Multi-Sponsored by -- M.  of  A.  MAGEE,
   THIELE -- read once and referred to the Committee on Energy -- commit-
   tee  discharged, bill amended, ordered reprinted as amended and recom-
   mitted to said committee -- recommitted to the Committee on Energy  in
   accordance  with Assembly Rule 3, sec. 2 -- committee discharged, bill
   amended, ordered reprinted as amended and recommitted to said  commit-
   tee
 
 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:
 
   Section 1. Legislative findings and  intent.  The  legislature  hereby
 finds and determines:
   1. New York is a national leader in developing and implementing policy
 to  promote the development of renewable energy resources, the growth of
 which has significantly benefited the state in numerous ways,  including
 through  reductions  in  pollutants  that  contribute to climate change,
 associated reductions in adverse impacts on public health, and  substan-
 tial job growth in the clean energy sector.
   2.  In  2016,  more  than  twenty percent of the state's electric load
 (representing 2,354 gigawatt hours) was supplied by renewable  resources
 - solar, wind, hydroelectric, biomass, fuel cells and similar resources.
 To  further promote and incentivize the development of renewable energy,
 the New York state public  service  commission  recently  established  a
 clean  energy standard requiring, among other things, that fifty percent
 of the electric load in  the  state  be  served  entirely  by  renewable
 resources by the year 2030 (i.e., 50 by 30 target).
   3.  A  recent  study  shows  that  New  York's clean energy sector now
 employs more than 85,000 workers at more than 7,500 business  establish-
 ments  spread  out  across  the  state, in both the renewable energy and

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10514-03-8

 A. 7275--B                          2
 
 energy efficiency sectors. With implementation of the clean energy stan-
 dard, clean energy jobs are anticipated to grow by more than six percent
 per year or double the growth rate of the entire United  States  economy
 in  2016. Proper implementation of the clean energy standard will ensure
 that the state meets these job growth projections.
   4. To promote achievement of the clean energy standard, and to  ensure
 the  continued job growth and other benefits attendant to a clean energy
 economy, New York needs to assure that its existing large-scale, renewa-
 ble energy sector is provided with adequate price signals and  financial
 incentives  to  remain  in  operation and to sell their renewable energy
 attributes in New York, allowing the state to count the resources toward
 the 50 by 30 target and retain the jobs and tax  payments  supported  by
 these  generators. Absent these assurances, it would be difficult if not
 impossible for the state to meet the recently established target.
   5. New York's ability to  meet  the  clean  energy  standard  will  be
 hampered  if  such  existing  resources  provide  their wholesale energy
 products for delivery to adjacent states, some  of  which  have  enacted
 laws  that provide for a robust market that provides a stronger opportu-
 nity to sell renewable energy attributes than is currently available  in
 New  York. There is a real and present danger that a significant portion
 of New York's existing fleet of large-scale, renewable energy  resources
 will  participate in the programs offered by these other states and thus
 will not be available for consideration in terms of meeting the 50 by 30
 target, and compete effectively with  other  renewable  classes  in  the
 clean energy standard.
   6.  It also is of paramount importance to ensure the fuel diversity of
 the state's energy sector for the purposes of providing energy security,
 system reliability and protection  of  consumers  from  potential  price
 spikes or shortages. For this same reason, it is important for the state
 to take measures to ensure the continued viability and competitive posi-
 tion of a wide variety of large-scale, renewable energy resources in the
 state.
   7.  Accordingly, the overlying intent of this act is to provide exist-
 ing large-scale, renewable energy  resources  in  New  York  state  with
 appropriate financial incentives to continue operations for the foresee-
 able future.
   §  2. Definitions.   1. "Large-scale, renewable energy resource" means
 an electric generating facility that:   (a)  sells  its  energy  in  the
 wholesale  markets operated by the New York independent system operator;
 (b) is deemed an eligible technology type pursuant to Appendix A of  the
 "Order Adopting a Clean Energy Standard" and, in the case of hydropower,
 has  a  generating  capacity  less  than 50 megawatts; (c) is physically
 located within the jurisdiction of the New York independent system oper-
 ator; and (d) the associated energy is delivered in  accordance  with  a
 New York delivery requirement as described in section three of this act.
   2. "Eligible large-scale, renewable energy resource" means an existing
 large-scale, renewable energy resource that: (a) at the time in question
 is  not  under  a contract for the sale of renewable energy credits with
 the New York state energy research and development authority pursuant to
 the renewable portfolio standard main tier or maintenance  tier  program
 or  clean  energy standard tier 1 program implemented by such authority;
 (b) is not under an existing contract for sale of renewable energy cred-
 its with a load serving entity; and (c) is otherwise found  by  the  New
 York  state  energy research and development authority to meet delivera-
 bility requirements specified in section three of this  act,  and  other
 eligibility requirements specified in subdivision one of this section.

 A. 7275--B                          3
 
   3. "Load serving entity" or "load serving entities" means and includes
 all  investor-owned distribution utilities (in their capacity as commod-
 ity suppliers), energy service companies, community  choice  aggregation
 programs  not  served  by  energy service companies, municipal utilities
 under  the  jurisdiction  of  the  public service commission, and retail
 customers that self-supply with electricity through the New  York  inde-
 pendent system operator.
   4.  "Renewable  energy  credit"  means a tradable, non-tangible energy
 commodity that represents proof that 1 megawatt-hour (MWh) of  electric-
 ity  was  generated from a renewable energy resource. To be eligible for
 sale in New York state and to meet the procurement obligations  of  load
 serving  entities,  each renewable energy credit must be registered with
 the New York generation attribute tracking systems.
   5. "Tier 1" means the program designated as tier  1  pursuant  to  the
 clean energy standard order.
   6. "Tier 2 renewable energy credit" refers to a renewable energy cred-
 it generated by an eligible large-scale, renewable energy resource.
   7.  "Order  adopting a clean energy standard" means the public service
 commission order dated August 1, 2016, and entered in case number  15-E-
 0302 et seq.
   §  3.  Deliverability.  Energy from an eligible large-scale, renewable
 energy resource shall be deemed to comply with the New York deliverabil-
 ity requirement if either it is: (a) delivered into  a  market  adminis-
 tered  by  the  New  York independent system operator for end-use in New
 York state; (b) delivered through a wholesale meter under the control of
 a utility, public authority or municipal electric company such  that  it
 can  be measured, and such that consumption within New York state can be
 tracked and verified by such entity  or  by  the  New  York  independent
 system  operator;  or  (c) delivered through a renewable energy resource
 dedicated generation meter,  approved  by  and  subject  to  independent
 verification  by  the  New  York  state  energy research and development
 authority, to a customer in New York state.
   § 4. Program for eligible  large-scale,  renewable  energy  resources.
 Notwithstanding  any  other provision of law to the contrary, including,
 but not limited to, any order, rule or regulation  promulgated  pursuant
 to  the public service law, the public authorities law, and/or the state
 administrative procedure act, the public service commission, in  consul-
 tation  with the New York state energy research and development authori-
 ty, shall adopt a program within 120 days of the effective date of  this
 act, to provide support to and for eligible large-scale, renewable ener-
 gy  resources  through  a  market for tier 2 renewable energy credits as
 defined herein to ensure the continued viability of eligible  large-sca-
 le, renewable energy resources for the purpose of meeting the state's 50
 by  30 target. In developing such program, the public service commission
 shall create an obligation on load serving entities to purchase  tier  2
 renewable  energy  credits  from  eligible large-scale, renewable energy
 resources through a process and requirements as fully described below:
   1. Annual targets for tier 2  renewable  energy  credits.  The  public
 service  commission  shall  provide  annual targets and mandates for the
 acquisition of tier 2 renewable energy credits by load serving  entities
 for the years 2018 to 2030 that ensures market demand for tier 2 renewa-
 ble  energy  credits for all resources that become eligible large-scale,
 renewable energy resources during such timeframe for purposes of achiev-
 ing the 50 by 30 target. The targets to be  established  by  the  public
 service  commission  should  reflect  the  quantity  of renewable energy
 generation that is serving  total  electric  load  in  New  York  state,

 A. 7275--B                          4
 
 excluding generation from facilities owned by the power authority of the
 state of New York and excluding hydropower from generators with a capac-
 ity greater than 50 megawatts.
   2.  Load  serving entities' tier 2 renewable energy credit obligation.
 Each load serving entity shall be responsible for  acquiring  a  defined
 quantity  of tier 2 renewable energy credits based upon the total tier 2
 load serving entity obligation target  allocated  to  all  load  serving
 entities  proportional  to  the  load  each  serves; i.e., determined by
 multiplying each load serving entity's actual load for the prior year by
 the percentage GWh target for that  year.  The  New  York  state  energy
 research and development authority shall publish each load serving enti-
 ty's  annual obligation for each annual compliance period on its website
 or by other appropriate means by December 1 of the  year  prior  to  the
 year such published annual obligation shall apply.
   3.  Tier  2 renewable energy credit price. By each December 1 prior to
 the annual compliance period, the public service commission shall estab-
 lish a tier 2 renewable energy credit price to be set at 75  percent  of
 the  weighted average cost per renewable energy credit that the New York
 state energy research and development authority paid to acquire  renewa-
 ble energy credits from resources under the clean energy standard tier 1
 program in the prior calendar year.
   4.  Financial  hardship.  Those eligible large-scale, renewable energy
 resources for which the tier 2 renewable energy credit price is insuffi-
 cient may seek additional financial assistance from the New  York  state
 energy  research  and  development  authority through contracts having a
 minimum duration of ten years for the purpose of ensuring the  continued
 viability and availability of such resources toward meeting the 50 by 30
 target.    The  New York state energy research and development authority
 shall apply the following criteria in  determining  the  eligibility  of
 such  eligible  large-scale,  renewable energy resources to receive such
 financial assistance, which shall be paid as an increment above the tier
 2 renewable energy credit price determined pursuant to subdivision three
 of this section:
   (a) A showing of financial hardship;
   (b) The basis for and reasonableness of expected operating and capital
 costs. This evaluation may include, among other things, a comparison  to
 prior years' costs and a comparison to costs of like generation;
   (c)  The  existence  of any other cash sources available to the large-
 scale, renewable energy resource, such as: (i) tax benefits; (ii) subsi-
 dies; (iii) contracts; and (iv) other sources,  including  restructuring
 financing;
   (d)  Whether market rules are increasing the costs of the large-scale,
 renewable energy resource and, if so, whether any steps can be taken  to
 reduce such costs;
   (e) Whether the large-scale, renewable energy resource's real property
 tax  assessment  is consistent with the assessments imposed in similarly
 situated facilities elsewhere, and if not, what action has been taken to
 address such assessment;
   (f) Whether the large-scale, renewable energy resource is required  to
 operate  as  part of a package of assets that is financially viable as a
 whole;
   (g) Whether  the  large-scale,  renewable  energy  resource  generates
 enough  revenue,  based on expected output, to cover its operating costs
 and enjoy a reasonable return;
   (h) Whether the generation facility generates enough revenue  to  make
 necessary capital improvements;

 A. 7275--B                          5
 
   (i)  Whether  the  large-scale,  renewable  energy  resource generates
 enough revenue to cover its fixed costs, including:  (i)  debt  service;
 (ii) property taxes; (iii) security costs; and (iv) other costs;
   (j)  Whether  the large-scale, renewable energy resource has attempted
 to make use of other renewables programs available to it, such as volun-
 tary green markets; and
   (k) The regional economic importance of the resource. This  evaluation
 may  include  job creation and retention, regional spending for fuel and
 other goods and services, contribution to local tax base, fuel  diversi-
 ty,  greenhouse  gas  reduction,  enhanced forest health, flood control,
 municipal water supply, ecological stewardship  and  other  non-economic
 factors  on  a region-specific basis.  Any contract entered into with an
 eligible large-scale, renewable energy resource pursuant to this  subdi-
 vision  shall  include a reasonable return, and take the form of a fixed
 price increment to the tier 2 renewable energy  credit  price  that  the
 generator  is  receiving  from  a  load  serving  entity  or a financial
 contract for differences to adjust based on fluctuations in the  tier  2
 renewable  energy  credit price. The totality of all increments provided
 to resources pursuant to this subdivision shall be recovered from deliv-
 ery customers in the same manner as in the renewable portfolio  standard
 program maintenance tier.
   5.  Procedures.  To  implement  the  tier  2  renewable  energy credit
 program, the public service commission shall also adopt within 120  days
 of  the  effective date of this act the following procedures and related
 requirements:
   (a) The public service commission shall establish procedures  consist-
 ent with the procedures developed under the clean energy standard tier 1
 program  to  determine  the eligibility of large-scale, renewable energy
 resources to participate in the program adopted pursuant to this act and
 to certify such eligible large-scale, renewable  energy  resources.  All
 resources  that  have previously been found by the New York state energy
 research and development authority to meet the eligibility and delivera-
 bility requirements in force under the renewable portfolio  standard  or
 clean  energy  standard programs shall be deemed to meet eligibility and
 deliverability requirements of this act.
   (b) The public service commission, with the assistance of the New York
 state energy research and development authority, shall develop an  equi-
 table  process  by  which load serving entities acquire tier 2 renewable
 energy credits from eligible large-scale,  renewable  energy  resources,
 which  may include the designation of the New York state energy research
 and development authority as the central procurement entity for  tier  2
 renewable energy credits, whereby the New York state energy research and
 development authority would ensure the registration of all tier 2 renew-
 able  energy  resources from generators in New York generation attribute
 tracking systems, purchase the required targeted amount of tier 2 renew-
 able energy credits, and re-sell the tier 2 renewable energy credits  to
 load  serving  entities  on an annual basis in order to facilitate their
 collective efficient compliance. The public service commission, with the
 assistance of the New York state energy research and development author-
 ity, shall also develop and implement protocols in the event that  there
 is  an  oversupply  or  undersupply  of  tier 2 renewable energy credits
 offered for sale, relative to the tier 2 renewable energy  credit  obli-
 gation applied to the load serving entities, provided that the protocols
 should  recognize and prioritize the realization of economic benefits in
 New York from generators located in New York.

 A. 7275--B                          6
 
   (c) The public service commission shall develop  procedures  by  which
 eligible  large-scale,  renewable  energy resources may obtain contracts
 from the New York state energy research and development authority  under
 subdivision  four of this section in accordance with the requirements of
 the  state  administrative  procedure  act.  Such procedures shall, on a
 case-by-case basis, authorize  eligible  large-scale,  renewable  energy
 resources  to  petition  the  public service commission for a finding of
 financial hardship, which finding shall be based  upon  a  determination
 that  the  established  tier  2  renewable  energy credits determined in
 accordance with subdivision three of this section  are  insufficient  to
 ensure  the  viability  of  the  resource. The public service commission
 shall make a final decision with respect to  such  contract  within  120
 days after a hardship petition is received.
   (d)  Each  load  serving  entity shall demonstrate compliance with the
 requirements of this section through an annual compliance filing  pursu-
 ant  to  a  process established by the public service commission that is
 consistent with the compliance filing requirements established  pursuant
 to the tier 1 program.
   § 5. This act shall take effect immediately.