New York delays Tier 4 REC plan: Update

Market: Electricity, Emissions
11/10/22

Updates with PSC decision

New York regulators have granted more time to implement the state's new Tier 4 renewable energy certificate (REC) program, designed to incentivize zero-emissions electricity delivered to New York City.

The state Public Service Commission today granted the New York State Energy Research and Development Authority (NYSERDA) an additional year to work out the details of the program. The stay pushes the deadline for NYSERDA filing its implementation plan to 11 October 2023 from 11 October 2022.

NYSERDA attributed the need for another year to the Tier 4 program being a "complex and entirely new component" of the state's clean energy strategy, which aims to transition New York to 70pc renewable energy by 2030 and 100pc zero-emissions electricity by 2040. Unresolved issues include establishing a voluntary sales and settlement process for Tier 4 RECs, the potential need for systemic changes in New York's generation attribute tracking system to account for the new credits and determining whether Tier 4 REC contract requirements conform with the agency's existing processes.

NYSERDA said navigating those intricacies requires ongoing discussions with stakeholders, including external consultants and working groups from the New York Independent System Operator, which oversees the state's grid.

"Energy delivery from the two Tier 4 contracts is not expected until 2026 and 2027, allowing ample time for a thoughtful and considered planning process to address the complexities associated with the Tier 4 program without risk to program delivery," NYSERDA senior counsel Alexander Stein said in the agency's petition.

New York in April awarded its first pair of Tier 4 contracts to the Clean Path New York and Champlain Hudson Power Express transmission lines, which the state expects to provide around 18mn MWh/yr of carbon-free electricity to the downstate area, enough to power the equivalent of 2.5mn homes, once they begin operating later this decade.

The Public Service Commission at that time gave NYSERDA 180 days to file its implementation plan for the Tier 4 program.

New York in 2020 created Tier 4 RECs, generated by projects that deliver renewable electricity into New York City, in a bid to mitigate the state's "two grids" dilemma. While the upstate region in 2021 generated 91pc of its electricity with zero-emissions sources like nuclear, hydropower and wind, downstate areas depended on fossil fuels for 89pc of their generation. The latter's reliance on resources such as natural gas actually grew relative to 2021, when it used fossil fuels for 77pc, after the Indian Point nuclear station closed last year.

By Patrick Zemanek

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