Pace Applauds Approval of New York's Clean Energy Standard

August, 02, 2016
Jordan Gerow
Energy and Climate Law Advisor
Renewable Energy

August 1, 2016



The Pace Energy and Climate Center (Pace) applauds the New York Public Service Commission’s historic commitment to clean energy through the issuance of an enforceable Clean Energy Standard (CES), published today. The CES will achieve the State Energy Plan’s target of procuring 50% of the State’s load from renewable resources by 2030. The Commission’s order promises a bright health, environment, and economic outlook for New Yorkers, makes good on Governor Cuomo’s mandate for the state, and maintains New York’s posture as a national leader in clean energy development over the next fourteen years. The Pace Energy and Climate Center particularly appreciates comments made by Commissioners and Department of Public Service (DPS) Staff today in adopting the Order, and looks forward to reviewing the 163-page Order and 279 pages of appendices in detail.

The central mandate of the CES is that “load-serving entities” (businesses that provide retail electric services directly to customers, including utilities and energy service companies) across the State must procure Renewable Energy Credits (RECs) in proportion to the load they serve. The RECs represent renewable energy generated from eligible facilities and can be used to track compliance with the CES requirements that will progressively increase until reaching the 50% renewable energy level.

The RECs obligation can serve as a foundation for other markets that can create economic, environmental, and societal value. These markets include the voluntary market for green energy or green energy produced in New York; the distributed energy market, which reflects small generators installed on roofs and in other locations near load; and even complementary efforts to procure energy efficiency.

As it has over the past 27 years, Pace will work with the Commission, DPS Staff, and other stakeholders to ensure that programs and markets supporting the CES are established and operated to be efficient and effective in reducing pollution and advancing clean energy.

Pace is particularly pleased that PSC Chair Zibelman called out the opportunity for the growth of voluntary markets to complement and expand upon the CES requirements. While it appears that the majority of CES renewable energy compliance will occur through procurements conducted by the NY State Energy and Research Development Agency (NYSERDA), the Commission also referenced the opportunity independent and consumer generators to create tradable RECs that could be used either in the compliance market or to support customers seeking to go above and beyond the CES requirements. Many businesses and individuals already use competitive market RECs to achieve voluntary 100% renewable energy goals for their businesses and homes. Pace Executive Director Karl R. Rábago, who also serves as the Board Chair for the Center for Resource Solutions, the nation’s leading certification body for green electricity products and tradable RECs, stressed the importance of ensuring that voluntary market behavior was additive—above and beyond—the CES requirements. “The concept of regulatory additionality is core to the integrity of voluntary clean energy markets,” said Rábago, “and must be a feature of voluntary markets in New York.”

In a similar vein, Pace also sees an opportunity for the CES framework to add to the recognized value streams associated with distributed energy generation and energy efficiency. “Rooftop and other privately-owned generators have an opportunity to sell RECs for the compliance market. These generators and energy efficiency investments should also earn credit from their service provider for reducing the overall system load, and therefore, the service provider’s CES obligation,” said Pace staff attorney Jordan Gerow. Customer-generators should have the choice of “greening” their own consumption with their generation, or selling their RECs into voluntary markets. “We look forward to the complementary ways in which the CES Order will help animate the distributed energy markets under development in the Reforming the Energy Vision proceeding,” said Gerow.

Pace agrees with Chair Zibelman on the critical role of energy efficiency in helping the state secure the Clean Energy Standard’s target. Energy efficiency is the least-cost resource to helping the state achieve its renewable energy targets by reducing the energy intensity of New York’s vibrant economy. “We look forward to continuing to advance the cause of energy efficiency through the Clean Energy Advisory Council and the Clean Energy Fund, as alluded to at today’s session,” said Rábago.

Pace applauds Governor Cuomo and the Public Service Commission for acting to strongly respond to the climate and energy challenges facing our state. While much work remains to be done in examining the details and implementation processes associated with the CES, Pace sees the framework of today’s Order as an historic achievement on behalf of every New Yorker’s energy future.