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Our attorneys stay on top of changes in legislation, agency regulations, case law, and industry trends—then craft timely legal alerts to keep clients up to date on legal developments important to their business.

June 24, 2024

PSC Updates Its Energy Storage Goals, Establishes Roadmap to Deploy 6 GW of Storage Capacity by 2030

On June 20, 2024, the New York State Public Service Commission (PSC) issued an order updating its policy on energy storage and adopting “New York’s 6 GW Energy Storage Roadmap: Policy Options for Continued Growth in Energy Storage” (the Roadmap), co-developed by Department of Public Service staff and the New York State Energy Research and Development Authority (NYSERDA). The PSC established its energy storage policy in 2018, prior to enactment of the Climate Leadership and Community Protection Act. At the time, the PSC set a target of developing and deploying 3 gigawatts (GW) of energy storage capacity within the state by 2030 through competitive solicitations by the utilities, with an interim goal of deploying 1.5 GW by 2025; at present, only 1 GW of storage is installed or under contract.

In 2022, the Governor of New York announced plans to double the state’s energy storage target to 6 GW, and accordingly, the PSC, through its adoption of the Roadmap, establishes the pathway towards meeting that target by 2030. The Roadmap further identifies a need to have 12 GW of installed storage capacity by 2040. Achievement of this target will largely be met through competitive solicitations by NYSERDA. The PSC also envisions the Roadmap’s initiatives supporting ongoing efforts by the New York Independent System Operator to evaluate the role of storage as a transmission asset and to develop market rules for participation in the wholesale market. 

The Roadmap delineates three categories of energy storage projects: bulk storage (projects with a capacity of 5 MW or more), retail storage (projects with a capacity of 5MW or less), and behind-the-meter (BTM) residential projects. Within the 6 GW by 2030 goal, the Roadmap sets sub targets of 1.5 GW of installed retail projects and 200 MW of BTM residential projects, leaving 4.3 GW to be met through bulk storage projects. It also identifies a need for a mix of both short-term storage (two-, four-, and eight-hours duration) as well as long-term storage (eight-plus hours duration) to meet the needs of an electrified grid as well as to support the retirement of peaker plants.

To achieve the targets, the Roadmap directs NYSERDA to conduct a minimum of three bulk storage procurements, relying upon an index storage credit (ISC) mechanism, with credits generated when the storage resource is operational and available for dispatch. NYSERDA must publish the first request for proposals by June 30, 2025, with subsequent procurements occurring annually. NYSERDA is authorized to perform a one-time inflation adjustment as necessary. Contracts will be for a term of 15 years. Proposals must incorporate the New York State prevailing wage as well as meet forthcoming recommendations by the Fire Safety Working Group once they are finalized. The New York Power Authority and the Long Island Power Authority may also voluntarily participate in the procurement; however, NYSERDA may take into account both authorities’ ability to develop storage projects independently of its program. NYSERDA will also develop and implement incentive programs to spur retail and BTM project development. 

Additionally, the Roadmap allows for the continued use of dispatch-rights contracts by utilities for storage deployment across the territories, with a target capacity of 350 MW. The utilities are also directed to study other use cases for storage, such as nonmarket ownership. 

Barclay Damon will continue to monitor the ongoing proceedings. 

If you have any questions regarding the content of this alert, please contact Brenda Colella, Regulatory Practice Group leader and Regulatory Practice Area co-chair, at bcolella@barclaydamon.com; David Solimeno, associate, at dsolimeno@barclaydamon.com; or another member of the firm’s Regulatory Practice Area.

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