Memorandum in Support - S.7027 (Parker) / A.8096 (Cusick)

S.7027 (Parker) / A.8096 (Cusick) - AN ACT in relation to maintaining the continued viability of the state's existing large-scale, renewable energy resources

The Independent Power Producers of New York, Inc. (IPPNY) is a trade association representing companies involved in the competitive power supply industry in New York State and in the development of electric generating facilities, the generation, sale, and marketing of electric power, and the development of natural gas transmission facilities. IPPNY Member companies produce the majority of New York's electricity, utilizing hydro, nuclear, wind, natural gas, solar, energy storage, biomass, oil, and waste-to-energy.

IPPNY supports S.7027 (Parker) / A.8096 (Cusick). This bill would require the Public Service Commission (PSC) to remedy its Competitive Tier 2 Program for existing eligible renewable energy facilities so that it is structured in a way that best ensures the ongoing benefits of those facilities for New York State and the economies of their host communities.

These renewable resources help ensure that existing progress towards the State’s targets under the Climate Leadership and Community Protection Act (CLCPA) is maintained, and that associated investment must be retained in a viable and sustainable manner. The existing Competitive Tier 2 has demonstrated a failure to achieve these outcomes and, therefore, must be modified. The program must be changed to stop the erosion of New York’s renewable energy baseline. The baseline is shrinking through the closure of renewable resources or facilities choosing to export their renewable attributes to neighboring states where they are compensated more. Exported renewable energy credits (RECs) do not count towards CLCPA targets.

The renewable energy baseline is lower than it was when the Clean Energy Standard first started, and the current Competitive Tier 2 program has not done enough to regain that ground. The first solicitation in 2021 by the New York State Energy Research and Development Authority yielded contract awards to procure RECs from only 13.9 MW of eligible facilities, and the second procurement resulted in no awards.

If New York fails to take action to retain its renewable energy baseline, it may need to procure an additional 5,460 MW of new renewable energy just to maintain its current renewable status quo. That amount is in addition to the large volume of new resources needed to achieve the CLCPA’s goals.

Accordingly, existing renewable facilities should be compensated fairly for the value of their renewable attributes so that these resources can continue to serve as the foundation for meeting the CLCPA’s goals. The PSC’s competitive program for existing renewable facilities should remain in place until an alternative market-based mechanism is established to fully value emissions-free electricity.

Resource adequacy margins are tightening across the New York grid from Buffalo to Long Island, and reliability margins will reach concerning levels as soon as 2023. The concerns about the adequacy of electricity supply will be even more magnified, as the State looks to undertake the aggressive electrification of the sectors of the economy that is needed to meet the CLCPA’s targets. Preserving our mix of existing renewable energy facilities and retaining and expanding other non-emitting facilities are as important as the investments that developers are making to grow the State’s renewable energy and energy storage resource portfolio.

For the reasons stated above, IPPNY supports S.7027 (Parker) / A.8096 (Cusick).

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