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April 23, 2021

New York Public Service Commission Modifies Separate Site Requirement

On April 15, 2021, the New York Public Service Commission (PSC) modified the separate site component of the three-factor test used to determine whether projects are separate and distinct for purposes of onsite and remote net metering and Value of Distributed Energy Resources (VDER) compensation.

The Order Modifying Separate Site Requirements (order) addressed a September 3, 2020, petition for declaratory ruling filed by Borrego Solar Systems Inc. (Borrego), requesting clarification regarding the PSC’s requirements for determining whether two or more projects are deemed sufficiently “separate” to comply with the 5 MW capacity limit for Value Stack compensation under the VDER tariffs.

In particular, the PSC requires three factors, including: 1) each facility must be separately metered and interconnected, 2) each facility must be operationally independent, and 3) each facility must be located on a separate site. Borrego sought relief from the third requirement—that projects be located on separately deeded properties in order to satisfy the separate site factor.

In a prior order from 2014, the PSC expounded upon the third factor by defining a separate site as “within the ambit of a description in a properly recorded deed,” such that “only one remote net metered facility may be located within the bounds of a site as described in a deed.”1 In other words, each facility had to be on its own lot. Recognizing ambiguity and uncertainty that has arisen for developers surrounding this factor, the PSC determined that further clarity with respect to the separate site requirement was necessary.

Reasoning that metering, operations, and safety protocols are unaffected by whether the host parcel is subdivided or leased, the PSC ultimately agreed with Borrego that the separate site requirement may be satisfied by other means than a separate deed. While a separate deed will continue to be sufficient, developers such as Borrego may also satisfy the separately sited component of the three-factor test by providing a unique Section-Block-Lot (SBL) or Borough-Block-Lot (BBL) number and a separate metes and bounds description recorded via a separate memorandum of lease.

While developers will still be required to comply with local zoning and permitting requirements, formal subdivision is no longer mandatory. Formal subdivision generally requires preparation of a plat plan, compliance with lot area and setback rules, the consent of local land-use authorities, and may involve multiple local decision-making boards in a process that entails risk and delay. Meanwhile, generating a unique SBL or BBL requires working with the town and/or county assessor’s office for administrative approval. The PSC’s order supports the continued development of renewable energy resources and enhances efficiency in the development approval process.

1 Case 14-E-0151, et al., Net Energy Metering, Order Raising Net Metering Minimum Caps, Requiring Tariff Revisions, Making Other Findings, and Establishing Further Procedures (issued December 15, 2014) (Net Metering Tariff Order).

If you have any questions regarding the content of this alert, please contact Corey Auerbach, Land Use & Zoning Practice Area co-chair, at cauerbach@barclaydamon.com; Ari Goldberg, associate, at agoldberg@barclaydamon.com; or another member of the firm’s Land Use & Zoning Practice Area.

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