2024 Compliance Year

This page includes information on the 2024 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 2024 compliance year, which differs for RECs and ZECs. See below for more information.

Renewable Energy Standard 

The Renewable Energy Standard (RES) 2024 compliance year for Tier 1 RECs begins on January 1, 2024 and ends on December 31, 2024.

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 2024 Tier 1 RECs and any unpurchased Tier 1 RECs from 2022 and 2023.

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. 2022 and 2023 RECs will be distributed based upon earliest payment by LSEs.

Please note that 2022 and 2023 Tier 1 RECs can be used for compliance in the 2024 compliance year.

If an LSE is unable to generate or purchase the necessary Tier 1 RECs, LSEs can fulfill their 2024 Tier 1 REC compliance by making an alternative compliance payment (ACP) to NYSERDA.

The 2024 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 2024 RES compliance year REC obligations in 2024.

Additionally, any 2024 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 1 Transition from LSE Obligation Percentage Approach to Load Share Approach

Compliance Year 2024 will be the last year where the LSEs’ compliance will be based upon the LSE Obligation Percentage Approach.

In accordance with the Order Modifying Clean Energy standard Tier 1 Obligation[PDF], filed on April 20, 2023, effective January 1, 2025, the Renewable Energy Standard (RES) obligation for LSEs will transition to a Load Share Approach.

NYSERDA and Staff will calculate a uniform per MWh rate that will be applied to each LSE’s actual wholesale load to calculate their Tier 1 Monthly Obligation Payments, with a January 1st through December 31st compliance year starting January 1, 2025.

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

LSE Tier 1 Rate = NYSERDA’s Forecasted Net total cost to procure Tier 1 RECs from the Large-Scale Renewable RFPs, plus the cost of VDER Tier 1 RECs, plus any Commission approved adder/ Forecasted statewide electric load.

An LSE’s monthly Tier 1 payment obligation will be calculated using the LSE Tier 1 REC Rate, the number of MWh the LSE served using the NYISO Version 1 load data, a Load Modifier Rate, and a VDER Compensation Factor, according to the following formula:

LSE Tier 1 monthly payment obligation = (LSE Tier 1 REC Rate) x (LSE’s Version 1 MWh) x (Load Modifier Rate) x (VDER Compensation Factor)

It should be noted that the Load Modifier Rate and the VDER Compensation Factor only apply to a subset of LSEs. NYSERDA will work directly with the effected LSEs.

Process

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 Tier 1 Monthly Obligation 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 Tier 1 Monthly Obligation Payment to NYSERDA using the formula specified above and issue an invoice. LSEs will submit their payment to NYSERDA within 15 days from the issuance of the invoice.

Tier 1 Voluntary Sale

In accordance with Order Modifying Clean Energy standard Tier 1 Obligation[PDF] filed on April 20, 2023, NYSERDA will sell Tier 1 RECs to voluntary Purchasers using a hybrid approach for the voluntary sales including long-term contracting, an annual REC Presale and an annual REC Resale.

In accordance with the Phase 5 Implementation Plan [PDF] filed on August 30, 2023, the Tier 1 Voluntary Sales NYSERDA has been authorized to engage in 3 types of voluntary sales approaches.

1. Long-Term Contracting

   NYSERDA is able to enter into long-term contracts with creditworthy entities for the purchase of Tier 1 RECs. The terms and conditions of the contracts will include, but will not be limited to: contract length, Tier 1 REC quantity, Tier 1 REC price, and payment terms. The terms and conditions will be memorialized within the individual contracts. Under any long-term contract, participants would be required to purchase Tier 1 RECs at the NYSERDA net-weighted average price plus any administrative adder approved by the Commission for that compliance year.

2. Annual Tier 1 Presale

   NYSERDA will hold annual sales in August prior to the start of the next Tier 1 Compliance year.with delivery of the Tier 1 RECs in February following the end of the calendar year. Through this Presale, NYSERDA will offer a percentage of the net expected Tier 1 REC inventory for the following compliance year for sale. For example, the first Tier 1 compliance year under this new approach will be 2025, the first Tier 1 Presale will occur in August 2024 based on a projection of VDER and NYSERDA Tier 1 RECs described above, and it will offer a percentage of the net expected Tier 1 REC inventory for 2025. NYSERDA will announce the quantity of Tier 1 RECs available for sale, Presale price, and Presale process no later than July 15 each year, through the end of the Tier 1 program.The sale will conclude 14 days after the announcement. NYSERDA will deliver the Tier 1 RECs to purchasers in approximately February 2026.

   NYSERDA will set a REC price each year which will be based upon the forecasted net-weighted average price of the projected REC inventory that NYSERDA will place for 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.

3. Annual Tier 1 Resale

   NYSERDA has the ability to hold a Tier 1 REC Resale at the end of each compliance year if there is sufficient demand for such and NYSERDA has a sufficient volume of Tier 1 RECs. 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 1 RECs.

   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 1 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

The Tier 2 program ended December 31, 2023.

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.