Specifically, the proposed Phase 4 Plan focuses on several implementation steps identified by the Commission’s January 2020 Order Modifying Tier 1 Renewable Procurements, under which NYSERDA was authorized to employ an index REC pricing structure, in addition to a fixed-price REC pricing structure, in its future Tier 1 solicitations. The implementation steps are primarily focused on impacts to the pricing and disposition of the Tier 1 RECs that NYSERDA procures under this new structure, such as changes to the current process of setting market prices, performance of auctions and managing REC vintages, changes to calculating Alternative Compliance Payments (ACPs), addressing unintentional impacts on the market for RECs imported to or exported from New York, and impacts to the Value Stack Environmental Value tariffs.

Specifically, the Phase 4 Plan proposes to expand the window during which NYSERDA would announce the quarterly Tier 1 REC Sale to provide sufficient time to determine the price of Tier 1 RECs procured under index-based contracts. According to the Phase 4 Plan, NYSERDA and Staff propose changes to the current process of pricing Tier 1 RECs for sale to LSEs by setting a Tier 1 REC price for each individual quarterly sale, rather than set an annual REC price based on the projected weighted average cost of Tier 1 RECs, as is currently done. Prior to each quarterly Tier 1 REC Sale, NYSERDA would determine the actual average Tier 1 REC price NYSERDA paid to the generators of all Tier 1 RECs (whether purchased through a fixed-price or index method) being offered during that quarterly sale. The Phase 4 Plan indicates that any unsold RECs from previous quarters would be factored into the quarterly weighted average cost of Tier 1 RECs at the price NYSERDA purchased them. NYSERDA proposes to continue to allocate Tier 1 RECs on a “first in-first out” basis using the vintage date for New York Generation Attribute Tracking System (NYGATS) certificates in NYSERDA’s NYGATS account to ensure transparency and consistency in the inventory clearance approach.

Additionally, the Phase 4 Plan will continue to support the publication of a levelized net weighted average awarded bid price, as was demonstrated when NYSERDA published the levelized net weighted average bid price after the first Offshore Wind solicitation. Starting in the 2021 compliance period and until otherwise modified by future Commission action, NYSERDA and Staff propose to set the price of the ACP as the net weighted average cost for the Tier 1 RECs projected to be delivered during that compliance year, plus 15 percent, plus any Commission-approved administrative adder. Further, NYSERDA and Staff also request the ability to review and adjust ACP calculation methodology during the annual Divergence Test.

The full text of the Phase 4 Plan and the full record of the proceeding may be read in its entirety on the Department of Public Service’s website at www.dps.ny.gov. The Commission may adopt, reject, or modify, in whole or in part, the action proposed and may resolve related matters.

Statements and analyses are not submitted with this notice because the proposed rule is within the definition contained in section 102(2)(a)(ii) of the State Administrative Procedure Act.

(15-E-0302SP42)