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May 19, 2023

NYS Public Service Commission Formally Initiates Proceeding to Establish What Constitutes "Zero Emission" Under the CLCPA

On May 18, 2023, the New York State Public Service Commission (NYSPSC) issued its “Order Initiating Process Regarding Zero Emissions Target” to begin the process to discern what technologies qualify as “zero emission” for the purposes of compliance with the Climate Leadership and Community Protection Act (CLCPA). Among other requirements, under the act, New York State’s energy demand must be met by electricity generated with zero emissions by the year 2040 (Zero-Emission by 2040 Target). Previously, the NYSPSC acted on its CLCPA obligations by adopting modifications to its Clean Energy Standard, which, since 2015, initially established similar clean energy targets as goals rather than mandates.

The Order acknowledges that, while renewable energy resources were the focus of the Clean Energy Standard, several studies have indicated that these technologies might not be capable of meeting the full range of electric system reliability needs that will arise as fossil-fueled generation is retired and replaced. For example, the intermittent nature of renewable generation such as solar or wind is a known drawback where energy demand cannot be adequately met when the sun goes down or the wind stops blowing. Presently, New York State still relies heavily upon natural gas–based generation to meet baseload demand as well as for periods of high demand.

This appreciable “gap” has been a known concern for years, with the issue being raised by the Independent Power Producers of New York, Inc., the New York State Building and Construction Trades Council, and the New York State AFL-CIO in a joint petition filed on August 18, 2021. The joint petition in part requested that the NYSPSC consider a new Clean Energy Standard tier1 for zero emissions resources; while this Order refrains from doing so, it instead aims to identify what technologies can close the gap and seeks stakeholder input accordingly. Part of this process involves determining whether certain technologies, such as bioenergy, hydrogen, and carbon capture and sequestration, as well as additional, new nuclear energy facilities, which are not renewable yet but do not emit carbon-like fossil-fueled generation, can fulfill a role in achieving the Zero-Emission by 2040 Target.

The Order poses 14 questions to be addressed through a technical conference and stakeholder input. These questions relate to how “zero emissions,” as understood by Public Service Law Section 66-p(2)(p) and the CLCPA, should be defined; what resources should be considered “zero emissions” for this purpose; how these resources should be utilized and what technology innovations are required to be viable for meeting the Zero-Emission by 2040 Target; and how the state can effectively develop these resources and measures that will ensure the Zero-Emission by 2040 Target will be met.

Per the Order, Department of Public Service (DPS) staff, in consultation with the New York State Energy Research and Development Authority (NYSERDA), will convene the technical conference within the next 120 days. Barclay Damon’s Regulatory Practice Area and Energy Team attorneys will continue to monitor the proceedings for updates, including information on opportunities to participate.

If you have any questions regarding the content of this alert, please contact Brenda Colella, Regulatory Practice Area co-chair, at bcolella@barclaydamon.com; Ekin Senlet, Regulatory Practice Area co-chair, at esenlet@barclaydamon.com; Yvonne Hennessey, Environmental Practice Area chair, at yhennessey@barclaydamon.com; David Solimeno, associate, at dsolimeno@barclaydamon.com; or another member of the firm’s Regulatory or Environmental Practice Areas.
 

                                                      

1New York State’s Clean Energy Standard presently has four tiers: Tier 1, which obligates load-serving entities to serve retail customers with renewable resources, purchase renewable energy certificates (RECs), or make alternative compliance payments; Tier 2, which established a maintenance program to support existing renewable facilities deemed at financial risk of ceasing operations; Tier 3, which established zero-emission credits (ZECs) that supported existing nuclear facilities in Upstate New York; and Tier 4, added in 2020, which focuses on renewable energy procurement to serve New York City.

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