2023 Compliance Year

This page includes information on the 2023 compliance year under the Clean Energy Standard (CES). It also includes REC and ZEC activities that affect Load Serving Entities (LSEs) during and after the 2023 compliance year, which differs for RECs and ZECs. See below for more information.

Renewable Energy Standard 

The Renewable Energy Standard (RES) 2023 compliance year for Tier 1 RECs begins on January 1, 2023 and ends on December 31, 2023.

NYSERDA will continue to sell Tier 1 RECs to LSEs on a quarterly basis, as available. At the end of every quarter, NYSERDA will announce a sale of Tier 1 RECs. These sales will include 2023 Tier 1 RECs and any unpurchased Tier 1 RECs from 2021 and 2022.

Changes based upon the Phase 4 Implementation Plan [PDF].

The sale will conclude 21 days after each announcement.

NYSERDA will set a Tier 1 REC price for each individual quarterly sale. Prior to each quarterly Tier 1 REC Sale, NYSERDA will determine the actual average Tier 1 REC price NYSERDA paid to the generators of all Tier 1 RECs (whether a fixed or index method) being offered during that quarterly sale. Unsold RECs from previous quarters will be factored into the quarterly weighted average cost of Tier 1 RECs at the price NYSERDA purchased them.

NYSERDA’s price for a Tier 1 REC will no longer be tied to its vintage. The Tier 1 REC price could vary each quarter depending upon the volatility of the index REC payments and the number of Tier 1 RECs purchased through index REC contracts.

NYSERDA will continue to allocate Tier 1 RECs on a FIFO basis using the vintage date for NYGATS certificates in NYSERDA’s NYGATS account to ensure transparency and consistency in the inventory clearance approach. 2021 and 2022 RECs will be distributed based upon earliest payment by LSEs.

Please note that 2021 and 2022 Tier 1 RECs can be used for compliance in the 2023 compliance year.

If an LSE is unable to generate or purchase the necessary Tier 1 RECs, LSEs can fulfill their 2023 Tier 1 REC compliance by making an alternative compliance payment (ACP) to NYSERDA.

The 2023 ACP costs $/MWh for each megawatt-hour of renewable energy an LSE is unable to generate or purchase the necessary Tier 1 RECs to meet its obligation. LSEs will have the option of making ACPs after NYSERDA and the LSEs have reconciled the 2023 RES compliance year REC obligations in 2023.

Additionally, any 2023 Tier 1 RECs that remain unpurchased after the end of the compliance year will be banked by NYSERDA and may be available for purchase in future compliance years.

Tier 2

In accordance with the Order Adopting Modification to the CES [PDF], filed on October 15, 2020, NYSERDA and Staff calculate a uniform per MWh rate that would be applied to each LSE’s actual wholesale load to calculate their Tier 2 Monthly Obligation Payments, with a January 1st through December 31st compliance year.

The dollar per MWh rate to be paid by each LSE for the compliance year would be calculated according to the following formula:

LSE Tier 2 Rate = NYSERDA’s maximum expected total cost to procure Tier 2 RECs plus any Commission approved adder/ Forecasted statewide electric load

An LSEs Tier 2 Monthly Obligation Payment would be calculated using the LSE Tier 2 Rate, the number of MWh the LSE served, using the New York Independent System Operator’s (NYISO) Version 1 load data and a Load Modifier Rate according to the following formula:

LSE Tier 2 Monthly Obligation Payment = (LSE Tier 2 Rate) x (LSE’s Version 1 MWh) x (Load Modifier Rate)

Process

NYSERDA would utilize Version 1 of the total LSE load data, as settled by the NYISO each month, as a basis for each LSE’s Tier 2 Monthly Obligation Payment to NYSERDA. NYSERDA typically receives load data from the NYISO on or around the 15th day of the following month. NYSERDA would then determine the LSE’s Tier 2 Monthly Obligation Payment to NYSERDA using the formula specified above and issue an invoice. LSEs would submit their payment to NYSERDA within 15 days from the issuance of the invoice.

Tier 2 Resale Resources

In accordance with the Order Approving Competitive Tier 2 Resale Implementation Plan [PDF], filed on September 9, 2021, NYSERDA will hold annual sales in February following the end of the calendar year. At the end of the compliance year, NYSERDA will announce the Voluntary Re-sale for Tier 2 RECs. The Tier 2 RECs will have their Tier 2 identifier removed and will be treated like a non-Tier 1, Environmental Disclosure program (EDP) eligible REC.

The sale process will be based upon the Final Tier 2 Resale Implementation Plan [PDF].

The sale will conclude 14 days after the announcement.

NYSERDA will set a REC price each year which will be based upon the net-weighted average price of the total REC inventory that NYSERDA possesses at the time of the sale. Please note, NYSERDA may not have the full Tier 2 REC inventory at the time of the sale.

NYSERDA will allocate RECs equal to the LSEs REC order if the total demand is less than the total inventory or a proportionate share of their order if total demand is greater than the total inventory.

Tier 2 Resale and LSE Obligation Reconciliation

The Tier 2 Resale will result in NYSERDA collecting Resale Revenue that will affect the Tier 2 Reconciliation. As per the Final Tier 2 Re-sale Implementation Plan, Resale Revenue will be incorporated into the LSE Obligation Reconciliation which will occur in the summer after the end of the calendar year.

NYSERDA will:

1. NYSERDA will determine the actual dollar per MWh charge based on the total dollars expended by NYSERDA to purchase Tier 2 RECs offset by any Tier 2 Re-sale Revenue received through the Tier 2 Re-sale.
2. NYSERDA will sum the total load served by the LSEs using the NYISO Version 2 load data including load modifiers.
3. Steps 1 and 2 will be used to determine the final Tier 2 Rate.
4. This final Tier 2 Rate will be applied to the total load associated with each LSE, as recorded in NYGATS, and provide the LSEs their Tier 2 obligation for the compliance year.
5. NYSERDA will reconcile the payments received from each of the LSEs against their final Tier 2 obligation.

ZEC Compliance

In accordance with the Final Zero Emissions Credit Implementation Plan [PDF], filed on October 21, 2019, a uniform wholesale per MWh charge will be applied to each LSE’s actual wholesale load to calculate their monthly ZEC obligation payments.

Each year, NYSERDA will determine, in collaboration with Staff, the dollar per MWh charge (LSE ZEC Rate) owed by each LSE for the next compliance year of the ZEC program. The dollar per MWh charge to be paid by each LSE for the compliance year will be calculated according to the following formula:

LSE ZEC Rate = NYSERDA’s maximum total cost, including any approved administrative adder, to procure ZECs / Forecasted statewide electric load

An LSE’s monthly ZEC payment obligation will be calculated using the LSE ZEC Rate, the number of MWh the LSE served, using the New York Independent System Operator’s (NYISO) Version 1 load data and a Load Modifier Rate according to the following formula:

LSE ZEC monthly payment obligation = (LSE ZEC Rate) x (LSE’s Version 1 MWh) x (Load Modifier Rate)

Process

The new “pay-as-you-go” payment methodology relies on an LSE’s monthly wholesale load requirements for their retail customers. NYSERDA will utilize Version 1 of the total LSE load data, as settled by the NYISO each month, as a basis for each LSE’s monthly payment to NYSERDA.

NYSERDA typically receives load data from the NYISO on or around the 15th day of the following month. NYSERDA will then determine the LSE’s ZEC monthly payment obligation to NYSERDA using the formula specified above and issue an invoice. As directed by the Public Service Commission in the Order Approving Zero Emissions Credit Implementation Plan with Modifications, LSEs will submit their payment to NYSERDA within 15 days from the issuance of the invoice.

Reconciliation

The updated pay-as-you-go process should reduce the magnitude of the reconciliations but will not eliminate the need for a reconciliation process. The reconciliation process will continue to be based on the LSE’s load using NYISO Version 2 data, the total load served by the LSEs and the number of ZECs actually purchased by NYSERDA.

In summary, NYSERDA will utilize the following process to reconcile the funds necessary to purchase the ZECs and account for collections from the LSEs.

1. NYSERDA will determine the actual dollar per MWh charge based on the total dollars expended by NYSERDA to purchase ZECs.
2. NYSERDA will sum the total load served by the LSEs using the NYISO Version 2 load data including load modifiers.
3. Steps 1 and 2 will be used to determine the final ZEC Rate.
4. This final ZEC Rate will be applied to the total load associated with each LSE, as recorded in NYGATS, and provide the LSEs their ZEC obligation for the compliance year.
5. NYSERDA will reconcile the payments received from each of the LSEs against the ZEC obligation.

Trainings and Webinars

NYSERDA will host periodic webinars to update LSEs on CES obligations, new procedures, and associated new NYGATS capabilities. Please check back for webinar details.