FAQs for Load Serving Entities

1. How is a Load Serving Entity (LSE) Renewable Energy Standard (RES) compliance obligation calculated?

The obligation of each LSE will be determined as a function of the actual load served by that LSE during the RES Compliance Period (January 1 through December 31). Once final load data for the Compliance Period has been reported to the New York Generation Attribute Tracking System (NYGATS), each LSE’s RES compliance obligation will be determined by multiplying the LSE’s actual load served by the Compliance Obligation Percentage. To meet its compliance obligation, the LSE must acquire Tier 1 RECs or make Alternative Compliance Payments (ACPs)in combined amounts that equal that number.

Final load data will be available approximately five months after end of the compliance period. This topic is discussed in Section 5 of the Phase 1 Implementation Plan[PDF] filed on October 31, 2016.

The Public Service Commission's August 1, 2016 Order Adopting a Clean Energy Standard[PDF] stated that the RES compliance obligation would be determined by multiplying the LSE’s actual load served in the Compliance Period times the Compliance Obligation Percentage. The LSE Compliance Obligation Percentage for 2018 is 0.15%, as outlined in Section 2 of the Phase 2 Implementation Plan[PDF]. As an example:

LSE XYZ Actual Load for 2018 Compliance Period (January 1, 2018 through December 31, 2018) - MWh:	1,000,000
RES Tier 1 Compliance Obligation Percent:	0.15%
LSE XYZ Tier 1 Compliance Obligation for 2018 Compliance Period:	1,500

The RES obligation is separate from any obligation on LSEs to encourage zero-carbon emitting generation under the ZEC program. Please see the ZEC Frequently Asked Questions section for more information on the ZEC program.

2. When can LSEs purchase Tier 1 RECs from NYSERDA?

NYSERDA offers Tier 1 RECs for sale on a quarterly basis, and will announce information on the next sale at the end of each quarter. The sale will be open for 21 days. During that period, LSEs may submit orders up to their right-of-first refusal amount. LSEs may also request additional Tier 1 RECs beyond that amount. Requests above the right of first refusal REC quantity will be granted if there are additional Tier 1 RECs still available after all right of first refusal requests have been fulfilled.

3. How do LSEs submit a request to purchase Tier 1 RECs?

All Tier 1 REC Orders will be submitted through NYGATS. LSEs may also find information about their REC balances by compliance year within NYGATS.

For each quarterly sale NYSERDA is offering each LSE a “right of first refusal” election opportunity to purchase Tier 1 RECs. The “right of first refusal” REC quantity is determined by the proportion of the total statewide load served by the LSE (computed from the most recent twelve-month data available to NYSERDA). LSEs are able to submit orders up to the right of first refusal quantity. Requests above the right of first refusal quantity will be granted if there are additional Tier 1 RECs still available after all right of first refusal requests have been fulfilled.

4. Do all the Tier 1 RECs that NYSERDA is offering for sale represent the total obligation of all LSEs for the compliance year?

Not necessarily. NYSERDA will offer for sale available current vintage Tier 1 RECs, as well as any available prior vintage Tier 1 RECs. While NYSERDA-procured Tier 1 RECs are designed to contribute a significant quantity of RECs toward LSE compliance, changes from forecasted load to actual load, forecasted production to actual NYSERDA-contracted production, as well as increases in spot REC market activity or other Tier 1 RECs obtained through projects installed under the Value of Distributed Energy Resources may cause the sale offering volume to fulfill varying percentages of each LSE’s obligation.

5. How do I know how many Tier 1 RECs I need to purchase?

LSEs may refer to the compliance module in NYGATS, which will provide information about their current Tier 1 REC balances by compliance year, the current compliance year obligation percentage and Tier 1 REC obligation to date.

6. May an LSE buy more than the right of first refusal Tier 1 REC quantity?

An LSE may order more than the right of first refusal, but to ensure equity among LSEs, NYSERDA will only guarantee the right of first refusal amount during each sale. If some LSEs elect not to purchase the right of first refusal quantity, and other LSEs order more than their right of first refusal, NYSERDA will first fulfill all LSE orders for the minimum quantity, and then allocate the rest proportionally to those who have expressed an interest in purchasing additional Tier 1 RECs.

7. If NYSERDA does not ultimately have enough Tier 1 RECs to satisfy all LSEs’ RES compliance obligations, what are other sources of Tier 1 RECs that are available from which an LSE can purchase the balance of their RES compliance obligation?

In addition to purchasing Tier 1 RECs from NYSERDA, an LSE may achieve RES compliance in any of three ways:

1. LSEs may purchase Tier 1 RECs from a third party;
2. Self-Supply: LSEs may enter into agreements, including long-term power purchase agreements (PPAs), with renewable energy resources to procure Tier 1 RECs or obtain these RECs through eligible Value of Distributed Energy Resource projects; and
3. LSEs may pay an alternative compliance payment (ACP).

LSEs may pursue any combination of these three strategies. For example, an LSE may choose to purchase a quantity of Tier 1 RECs from NYSERDA while also acquiring Tier 1 RECs from other sources. If an LSE is unsuccessful in acquiring a sufficient quantity of Tier 1 RECs the LSE can complete its compliance by making ACPs, as substitutes for Tier 1 RECs, in an amount sufficient to fulfill the compliance obligation shortfall. Each LSE will need to determine the best approach to demonstrate compliance.

Regarding the second, self-supply option, to be eligible for compliance with RES obligations, Tier 1 RECs must be sourced from a facility that has obtained certification from NYSERDA. NYSERDA is now in the process of certifying facilities and recording their RECs as Tier 1 eligible in NYGATS as detailed in thePhase 1 Implementation Plan[PDF] filed on March 24, 2017. LSEs and/or eligible facilities can post an interest to transact RECs on the NYGATS Bulletin Board.

If an LSE has purchased Tier 1 RECs from NYSERDA in an amount that exceeds the LSE’s actual compliance requirement, it may bank the excess certificates in accordance to the banking rules[PDF].

8. Does a new LSE that had no load in the previous year still need to comply?

Any LSE that serves load during the compliance year will have the obligation to comply by acquiring Tier 1 RECs or paying ACPs. As described above, the actual obligation of an LSE will be calculated at the end of the compliance period after final load numbers for the compliance period are available.

9. Can Tier 1 RECs be produced and procured from adjacent control areas?

Yes. In order to count towards an LSE’s RES compliance obligation, the RECs must be tagged as eligible New York Tier 1 RECs in NYGATS. These RECs may be produced in other control areas so long as they are deemed eligible according to the resource and delivery requirements established in the August 1, 2016 Commission Order[PDF]. The Phase 1 Implementation Plan[PDF], filed March 24, 2017 has more details on geographic eligibility for Tier 1 resources.

10. Why would an LSE prefer to pay an ACP instead of purchasing Tier 1 RECs?

An LSE may prefer to pay ACPs instead of purchasing eligible New York Tier 1 RECs for administrative simplicity. However, the ACP price has been established at a price higher than NYSERDA’s Tier 1 REC sales price.

11. How does an LSE demonstrate compliance with this obligation?

LSEs will demonstrate compliance with the RES by transferring Tier 1 RECs into their EDP subaccount, with the reason “RES Compliance” in their NYGATS account. If the LSE has Tier 1 RECs in a Banked or Active subaccount in their NYGATS account, those Tier 1 RECs will not count towards their obligation. LSEs will need to review and accept an annual compliance report to verify they have met their obligations.

12. When is compliance filing due?

As described in the Phase 1 Implementation Plan, filed March 24, 2017, NYGATS will generate a compliance year RES compliance report, containing the actual compliance obligation and Tier 1 REC balances in the LSE's NYGATS account in July following the compliance year. LSEs must verify and accept their compliance filings by August 31 each year.

13. Are there reports released by NYGATS showing qualified Tier 1 RES resources?

Yes. NYGATS produces public reports of all facilities granted a Tier 1 RES Statement of Qualification. NYGATS also provides reporting of provisionally certified resources (those that are not yet operating) on an aggregate level.

1. My Load Serving Entity (LSE) is new to the New York Market. What do we need to do?

The LSE should contact NYSERDA at [email protected]. NYSERDA shall provide an overview of the program and LSE requirements. NYSERDA will also provide a link so the LSE may accept the Commission approved Tier 2 Agreement. LSEs should reach out to NYSERDA prior to serving load in New York.

2. How is a LSE Tier 2 compliance obligation calculated?

The obligation of each LSE will be determined based on the actual load served by that LSE from January 1 through December 31 (Tier 2 Compliance Period). The Department of Public Service has stated that load will be calculated without losses (wholesale).

Final load data will be available approximately five months after end of the Tier 2 Compliance Period (approximately June 15). Once final load data for the Tier 2 Compliance Period has been reported to the New York Generation Attribute Tracking System (NYGATS), each LSE’s Tier 2 obligation will be determined using each LSE’s actual load share ratio (the LSE’s load during the Tier 2 Compliance Period divided by the total New York State load during the Tier 2 Compliance Period). To meet its compliance obligation, the LSE must acquire Tier 2s from NYSERDA in an amount that equals its load share ratio multiplied by the total number of TIER 2s purchased by NYSERDA during that Tier 2 Compliance Period.

The Tier 2 obligation is separate from any obligation on LSEs to encourage generation utilizing renewable resources under the Renewable Energy Standard (RES). For more information on RES, please see RES Frequently Asked Questions.

3. How is the initial Tier 2 Rate determined?

Each year, NYSERDA will determine, in collaboration with Staff, the dollar per MWh charge (LSE Tier 2 Rate) owed by each LSE for the next compliance year of the Tier 2 program.

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 2s plus any Commission approved administrative adder / Forecasted statewide electric load

4. How will NYSERDA inform LSEs of the initial Tier 2 Rate? When will NYSERDA inform LSEs of the initial Tier 2 Rate?

NYSERDA will email LSEs of the annual Tier 2 rate at the end of October, prior to the start of a new compliance year. NYSERDA will also update the Clean Energy Standard website to reflect the new compliance year’s Tier 2 rate.

5. How did NYSERDA calculate each LSE’s Monthly Tier 2 payment amount?

NYSERDA utilizes 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. An LSE’s monthly Tier 2 payment obligation will 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.

As described above, the LSE’s actual Tier 2 compliance obligation will be based on the LSE’s actual load during the Tier 2 Compliance Period and the total number of Tier 2s generated in that compliance period.

6. Will the amount of Preliminary Tier 2s Charges that NYSERDA will invoice an LSE during the Compliance Period equal an LSE’s Final Tier 2 Charges for a compliance year?

It is unlikely. Monthly Tier 2 Charges are based on an LSE’s V1 load data that NYGATS receives from the NYISO. The Final Tier 2 Charges will be based on the V2 load data as directed in the Order Approving Modification to the Clean Energy Standard [PDF].

7. What are the terms and conditions of the Tier 2 Agreement?

In accordance with the Order Approving Modifications to the Clean Energy Standard [PDF], filed on October 15, 2020, , including the Agreement for the Sale of Tier 2 Renewable Energy Certificates from NYSERDA to LSEs. NYSERDA posted the Standard Tier 2 Renewable Energy Certificate Purchase Agreement [PDF] on its webpage. NYSERDA recommends reviewing the Agreement carefully as it contains important information regarding payment and delivery schedules.

8. What if my LSE withdraws from the New York Market?

LSEs who withdraw from the New York Market will still be required to pay their Tier 2 obligations to the time where load is no longer being served. Additionally, LSEs would potentially owe to NYSERDA or be credited funds after the Tier 2 Reconciliation is complete.

9. When is the Tier 2 reconciliation?

The Tier 2 reconciliation will occur each year in the July/August timeframe after the final load data has been made available in NYGATS.

1. My Load Serving Entity (LSE) is new to the New York Market. What do we need to do?

The LSE should contact NYSERDA at [email protected]. NYSERDA shall provide an overview of the program and LSE requirements. NYSERDA will also provide a link so the LSE may accept the Commission approved ZEC Agreement. LSEs should reach out to NYSERDA prior to serving load in New York.

2. How is a LSE ZEC compliance obligation calculated?

The obligation of each LSE will be determined based on the actual load served by that LSE from April 1 through March 31 (ZEC Compliance Period). The Department of Public Service has stated that load will be calculated without losses (wholesale).

Final load data will be available approximately five months after end of the ZEC Compliance Period (approximately September 15). Once final load data for the ZEC Compliance Period has been reported to the New York Generation Attribute Tracking System (NYGATS), each LSE’s ZEC obligation will be determined using each LSE’s actual load share ratio (the LSE’s load during the ZEC Compliance Period divided by the total New York State load during the ZEC Compliance Period). To meet its compliance obligation, the LSE must acquire ZECs from NYSERDA in an amount that equals its load share ratio multiplied by the total number of ZECs purchased by NYSERDA during that ZEC Compliance Period.

The ZEC obligation is separate from any obligation on LSEs to encourage generation utilizing renewable resources under the Renewable Energy Standard (RES). For more information on RES, please see RES Frequently Asked Questions.

3. How is the initial ZEC Rate determined?

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 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 ZECs plus any Commission approved administrative added Tier 2 RECs / Forecasted statewide electric load

4. How will NYSERDA inform LSEs of the initial ZEC Rate? When will NYSERDA inform LSEs of the initial ZEC Rate?

NYSERDA will email LSEs of the annual ZEC rate at the end of December , prior to the start of a new compliance year. NYSERDA will also update the Clean Energy Standard website to reflect the new compliance year’s ZEC rate.

5. How did NYSERDA calculate each LSE’s Monthly ZEC payment amount?

NYSERDA utilizes Version 1 of the total LSE load data, as settled by the NYISO each month, as a basis for each LSE’s ZEC 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 ZEC Monthly Obligation Payment. 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.

As described above, the LSE’s actual ZEC compliance obligation will be based on the LSE’s actual load during the ZEC Compliance Period and the total number of ZECs generated in that compliance period.

1. Will the amount of Preliminary ZECs Charges that NYSERDA will invoice an LSE during the Compliance Period equal an LSE’s Final ZEC Charges for a compliance year?

It is unlikely. Monthly ZEC Charges are based on an LSE’s V1 load data that NYGATS receives from the NYISO. The Final ZEC Charges will be based on the V2 load data as directed in the Final ZEC Implementation Plan [PDF].

7. What are the terms and conditions of the ZEC Agreement?

In accordance with the Final Zero Emissions Credit Implementation Plan [PDF], filed on October 21, 2019, including the Agreement for the Sale of Zero-Emissions Energy Certificates from NYSERDA to LSEs. NYSERDA posted the Standard Zero-Emissions Energy Certificate Purchase Agreement [PDF] on its webpage. NYSERDA recommends reviewing the Agreement carefully as it contains important information regarding payment and delivery schedules.

8. What if my LSE withdraws from the New York Market?

LSEs who withdraw from the New York Market will still be required to pay their ZEC obligations to the time where load is no longer being served. Additionally, LSEs would potentially owe to NYSERDA or be credited funds after the ZEC Reconciliation is complete.

9. When is the ZEC reconciliation?

The ZEC reconciliation will occur each year in the September/October timeframe after the final load data has been made available in NYGATS.