New York State Public Service Commission Adopts Biennial Review as Final and Orders Changes to the Implementation of the Clean Energy Standard
On May 15, 2025, the New York State Public Service Commission (“Commission”) issued its Order Adopting Clean Energy Standard Biennial Review as Final and Making Other Findings ("CES Biennial Review Order"); part of its ongoing evaluation of the State’s Clean Energy Standard (“CES”) and progress toward the State’s clean and renewable energy goals established by the Climate Leadership and Community Protection Act (“CLCPA”). The CES is administered by the New York State Energy Research and Development Authority (NYSERDA) and is comprised of a Renewable Energy Standard ("RES") and a Zero-emissions Credit ("ZEC") requirement. The Draft Clean Energy Standard Biennial Review was submitted by the Department of Public Service and NYSERDA for review by the Commission on July 1, 2024.
The Commission expects the amount of renewable generation from operational and awarded/contracted sources in 2030 to total 73,292 GWh, a renewable energy deficit of 41,145 GWh under base case load. Seven factors were identified as impeding progress toward the goals, including (1) global interest rates, inflation, and supply chain pressures; (2) inadequacies in the transmission system limiting the amount of renewable energy that can be injected into the grid; (3) interconnection delays; (4) changes in capacity accreditation instituted by NYISO; (5) uncertainty regarding federal initiatives including the Inflation Reduction Act (IRA); (6) complexity of siting and permitting delays; (7) expected increases in Statewide electric load.
To address shortfalls and return to a trajectory toward the State’s goal of 70% renewables by 2030, the Commission took the following actions: augmenting NYSERDA’s Tier 1 solicitations scheduled through 2026 and authorizing three additional solicitations to occur in 2027, 2028, and 2029, with a future procurement of approximately 5,600 GWh on average per solicitation. Future solicitations will target more mature projects and require that bidders demonstrate significant progress within the interconnection study process conducted by the New York Independent System Operator (NYISO) and other criteria for demonstrating project maturity. Further, NYSERDA will have discretion to adjust the portfolio risk factor (PRF) to encourage more diverse generation, to consider solar paired with battery as a different technology than solar alone, and to offer increased terms for Tier 1 REC purchase contracts: 25 years for on-shore facilities and 30 years for OSW. Project milestones will include a requirement to reach commercial operation within 5 years of the award, with extensions limited to circumstances beyond the developer’s reasonable control. The Commission did not take any steps to reduce permitting delays and complexities.
The Commission authorized NYSERDA to grant Tier 2 maintenance contracts for 10-year terms in order to better facilitate financing options needed by these facilities. Further, DPS Staff was ordered to develop, within 180 days of the CES Biennial Review Order, separate criteria for hydroelectric facilities that capture the significant costs and considerations necessary for repowering, including potential removal of the 15 percent increase in generation to qualify.
In addition to those specific steps, the Commission seeks additional comment on proposals to allow utility ownership of renewables, including what additional regulation might be required; new ownership models; revised project selection criteria; risks; and reporting. The Commission directed that DPS Staff hold at least one technical conference and prepare a whitepaper to explore Clean Energy Zones and the ZEC Program.
Hodgson Russ Take-Away:
While the Biennial Review Order demonstrates the Commission’s continuing commitment to pursuing New York’s renewable energy goals regardless of changing federal policies and the potential obstacles that might result, it appears to recognize that such goals may be difficult to achieve. While the additional discretion and flexibility given to NYSERDA will create room to adjust future solicitations to more closely match the contemporaneous circumstances of each solicitation and an ability to adjust the program to more closely track the now-lived experience of project development, there is a tacit admission that more needs to be done. By emphasizing project maturity in the evaluation of project proposals without making any apparent effort to ease permitting risks and delays developers will need to heighten their diligence in their project development and in reviewing and responding to future RFPs.
For further information, please contact William McLaughlin or any other member of the Hodgson Russ Renewable Energy Practice.
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