ML12334A610

Official Exhibit - NYS000117-00-BD01 - NYSERDA, New York State Renewable Portfolio Standard Performance Report Program Period December 31, 2010 (2010 NYS RPS Report)

ML12334A610
Person / Time
Site:	Indian Point
Issue date:	12/31/2010
From:	State of NY, Energy Research & Development Authority
To:	Atomic Safety and Licensing Board Panel
SECY RAS
References
RAS 21538, 50-247-LR, 50-286-LR, ASLBP 07-858-03-LR-BD01
Download: ML12334A610 (28)

Text

United States Nuclear Regulatory Commission Official Hearing Exhibit NYS000117 Entergy Nuclear Operations, Inc. Submitted: December 14, 2011 In the Matter of:

(Indian Point Nuclear Generating Units 2 and 3) c.\.~P.R REGlJ~" ASLBP #: 07-858-03-LR-BD01 P~~"

Docket #: 05000247 l 05000286 Exhibit #: NYS000117-00-BD01 Identified: 10/15/2012 I-

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Admitted: 10/15/2012 Withdrawn:

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OAGI0001361_00001

OAGI0001361_00002 EXECUT~VE

SUMMARY

This report summarizes activities conducted through company to compete for Main Tier RPS incentives:

December 31, 20] 0 by the New York State Energy reaffirmed the weighting of economic benefits at 30%

Research and Development Authority ("NY SERDA") in the competitive selection process, while relaxing and the Department of Public Service ("DPS") in former incremental economic benefits requirements implementing the New York State Renewable Portfolio to allow all claims of in state spending after January Standard eRPS"). This report includes background 1, 200.3; and authorized N'ITSERDA to conduct fu1ure on the RPS, objectives and performance targets, and Main Tier competitive solicitations at least annually, in a SUlillnary ofRPS Program outcomes, funding, and consultation with DPS Staif.

expenses. Previous program performance reports and related information can be found at: http://w'ivw. The newly expanded Customer-sited Tier made sig-nyserda.orgitl)s!documents.asp, nificant progress in 2010, with Program Opportunity Notices ("PON") issued for Solar Photovoltaic CPV"),

Following a comprehensive mid-course review, the Anaerobic Digester Gas ("ADG"), On .. site Wind and Public Service Commission CPSC' or "Commission") Solar Thermal fi.mding. 1 has issued a series of orders reenergizing and expand-ing the RPS program and goals, In an order issued ill Progress in the program through December 3]" 2010 has January 2010, the Commission expanded the RPS goal yielded, and is expected to yield, significant economic to increase the proportion of renewable electricity to be benefits to New York State and its associated locales, consumed by New Yorkers from 25 percent to .30 percent Economic benefits accrue from the planning, develop-and extended the tenninal year of the program from 2013 ment construction, and operation ofrennvable energy to 2015; established new Customer-sited Tier ("CST') facilities. These economic benefits come in the ionn of program goals; authorized a new CST program aimed at long- and short-tenn jobs, property tax or payment-in-encouraging geographic balance; added Solar Themml lieu of tax benefits to local govemments and school dis-energy systems as an eligible technology under the CST; tricts, and biomass fuel purchases, as well as from lease authorized funding to achieve overall program goals and/or royalty p;lyments to landowners. For example, by 2015; directed the development ofa Customer-sited long-term jobs include such positions as asset and Tier Operating Plan (,,2010 CST Plan"); established the project management jobs, operations and maintenance scope and cost of the administration oUhe RPS program; jobs, and administrative staff Payments in lieu of taxes reatllmled the role of NYSERDA as the administrator of inject money into towns, counties and school districts, the program: and authorized NYSERDA to conduct two \,vithout requiring additional services. Similarly, host additional Main Tier competitive solicitations. community payments invest more dollars directly to a community where a new renewable project is sited.

Orders issued by the Commission in November and Project development and constmction also creates local-December of 2010 made additional significant pro- ized demand for short-term laborers, \vho in tum fill grammatic modifications to the Main Tier portion of New York State hotels, motds and restaurants. These the RPS. These orders expanded the biomass eligible direct economic benefits have a significant impact on resources category to include the use of clean wood New York's economy. NYSERDA estimates that New separated from construction and demolition debris York could realize up to $2.1 billion in direct economic at approved material reclamation facilities; modified benefits over the expected 20 year life of the filCili-the RPS eligibility mles to allow "behind-the-meter," ties with active contracts under the first five main tier facilities, including facilities \,yhere the electric energy solicitations. 2 When the etTects induced on the broader is delivered through a wholesale meter under the con- economy are considered, the total economic benefits trol of a utility, public authority, or municipal electric have been estimated to more than double. 3 1 PON 2156, the CST Regional (Geographic Ba13~lcillg) program and PON 2157, the CST Fuel Cell program were issued in March 01'2011 2 Based upon an independent program evaluation report prepared by KEMA in 2009, this figure is aggregated from bid in1'onnation provided by the tacilities during the bid evaluation and award selectiun process, Contmct terms require that iacilities demonstrate ad1ml investment of no less than 85% of the bid-based amount, or fuel' will be penalized through a lowering offueir contract price, New York Main Tie1~ Impact a.'1d Process Evaluation, KEJ\{A, Inc. available at: http://W',nv,nyserda.orgJEnerg),_InformationiKEMARPSEvaluation%20MAR%2030FinaLpdf This report was prep3.red for NY SERDA by its contractor, KEMA-New York Main Tier RPS: Impact and Process Evaluation, and published in March 2009. :3 OAGI0001361_00003

PROGRAM H~GHUGHTS

• Implementation ofthe RPS has been highly cost effective. Progress toward the J'.<'YSERDA Main Tier and Customer Sited Tier 2015 target is approximately 39~;;J while funding committed toward this progress is 29% of the total ap-proved RPS budget.

• Under the Main Tier pOliion of the RPS. 1,286 megawatts ("MW") of ne,,, rene,,,able capacity from 31 facilities under contract are operating: the remaining 282 M\V. from eight facilities, are currently under development and/or construction.

• New renewable capacity installed since the onset of the Rl)S Program could reach nearly 1.620 MW by the end of 2012 under both the Main Tier and Customer-sited Tier, of which 1,583 MW will be located in New York.

BACKGROUND The 2002 Slate Energy Plan wamed of the possible conse-quences of New York's heavy dependence on fossil fuels. 4 The Energy Plan noted that New York State's fossil fuel resources (gas, coal, oil) are largely imported from abroad or out-of-state. have significant long-term negative envi-romnental impacts, and face ultimate depletion. Recogniz-ing the need for a proactive approach to the state's energy and environmental challenges, in February of2003, the Commission initiated a proceeding to explore the devel-opment of an RPS. On September 24. 2004. following an extensive slakeho1der process, the Commission issued an Order adopting an RPS. with a goal of increasing the pro-portion of renewable energy used by New York consum-ers from the then-current 19.3% ("baseline resources") to at least 25% by the end of2013. 5 As part of the September 24, 2004 Order, the Commis-sion designated NYSERDA as the central procurement administrator for the RPS Program. In doing so. the Com-mission noted an expectalion that voluntary renewable purchases by retail customers (the "Voluntary Market")

\vould C'Ontribute at least 1% tmvard the 25'10 goal, thus leavi ng baseline resources, State Agenci es' purchases under Executive Order III ("EO 111-'), and NYSERDA procurements to realize the remaining 24'-/0. In the same RPS uses a central procurement model, "vith NYSERDA Order, the Commission directed the major investor-owned as the central procurement administrator. Under the Main utilities ("IODs") to collect funds from rate-payers to be Tier for example. NYSERDA does nol procure rene\vable administered by NYSERDA for the purpose of supporting electricity directly. Rather, NYSERDA pays a produc-NY SERDA's implementation responsibilities.

tion incentive to renewable electricity generators selected In most other states with RPS programs, the renewable en- through competitive solicitations for the electricity they ergy percentnge target is implemented by requiring the load deliver for end use in Ne\v York. In exchange for receiving serving entities to supply their customers with a certain per- the production incentive, lhe renewable generator transfers centage of electricity from renewable sources. New York's to NYSERDA an rights and/or claims to the RPS Attributes 4 State Energy Plan, 1-1. (June 2(02).

sease 03-E-O J 88: Em.0_~.\?gin¥-_9_D__M.9_tiQn_Q.Ltl:&_C_9_illmj]!~iQ1J._K".¥.JIgjn2--A_.B.s<t~.iL.B.sms<w:!lcb.ls<_J.:Q!1fQlJ.9_c~t,mg,mt. "Order Regarding Retail Renewa ble P01tf()ho Standard," lssued and effective September ~~O. 2004 OAGI0001361_00004

associated \,vith each megmvatt-hour CMWh") of renew- year of the program from 2013 to 2015,S thus formalizing able electricity generated, and guarantees delivery of the a goal advanced in the 2009 State Energy Plan. 9 These associated electricity to the New York State ratepayers.6 For changes to the RPS program targets reflect New York all RPS Main Tier Facilities, the electricity associated with State's continued commitment to support the development the RPS Attributes must be: of various renewable energy technologies, and will help achieve New York's '45 by 15' clean energy goals.

1. delivered into a market administered by the New York Independent System Operator ("NYISO") for In concluding its mid-course review of the RPS Program, end-use in New York State; or the Commission issued two orders in April 2010 regard-

2. delivered through a wholesale meter under the con- ing the RPS program. lO Therein the Commission:

trol of a utility, public authority, or municipal electric company such that it can be measured, and such that a) eSlablished new CST program goals for the previous--

consumption vv'ithin New York State can be tracked ly approved CST technologies (PV, fhel cell, ADO, and verified by such entity or by the NYISO; or and on--site wind installations) to help support the

3. delivered through a dedicated generation meter, overall RPS program target of30% by 20]5; which shall be approved by and subject to indepen- b) authorized a new CST program aimed at encouraging dent verification by NYSERDA, to a customer in additional customer-sited installations in the down-Ne'vv York State (excluding customers in the service state region (NYISO Zones G, H, I and J);

territory of the Long Island Pmver Authority) whose c) authorized a new CST program focused solely on the electricity was obtained through the NYISO/utility deployment of solar thermal energy systems; system as oOanuary 20,2011. d) authorized funding through the full compliance period for the overall RPS program, inclusive of The RPS Attributes include any and all reductions in new CST programs and program administration that harmful pollutants and emissions, such as carbon dioxide it determined to be suftlcient to achieve overall pro-and oxides of sulfur and nitrogen. By acquiring the RPS gram goals by 2015; Attributes, rather than the associated electricity, the RPS Program ensures that increasing amounts of renewable electricity will be injected into the New York State power system, while minimizing interference with the slate's competitive wholesale power markets.

During 2009, the Commission undertook a planned mid-course review ofthe RPS program and its goals. In anticipation of this mid-course review, in early 2009, NY SERDA prepared and submitted an Evaluation Re-port.' Two technical conferences were held by the Com*-

mission to explore the issues raised by the Department of Public Service staff in response to the Evaluation Report.

Subsequently, in early 2010, the Public Service Commis-sion expanded the RPS goal to increase the proportion of renewable electricity consumed by New York customers from 25 percent to 30 percent and extended the terminal 6 "RPS Attributes" include any and all reductions in hannful pollutants and eUllssjoHs, such as carbon dioxjde and oxides of SU111Jf and nitrogen RPS Attributes are similar to Renewable Energy Certificates that are commonly used in other RPS programs to catalog and recognize enviromnen..

tal attributes of generation.

7 NYSERDA, New York S\3,\e Renewable Portfolio Standard Evaluation RepOlt: 2009 Review (EvaJuation Report). The Evaluation Report relied on the reports oftwo NY SERDA contractors: KEMA, New York Main Tier RPS: Impact and Process Evaluation (March 2009) and Summit Blue Consulting, New York State Renewable P01tf()lio Standard: :'"lark"t Conditions Assessment-Fina.! Report (Febmary 19,2(09) s rL9-"_,,~QjDg_Q1.LM_9.tiQ!1_QHh~_C.9_mmi.!'i~_i.',m_R,,gclIQing,A_R~!!!iLR~n~'3"lhl~_rQLt[QJi.9_-,2!;mgNQ, "Order Establishing New RPS Goal and Resolving Main Tier Issues;" issued and effective January 8, 201 O.

, 2009 State Energy Phn. 2009. Avajlable at http://www.nysenergyplan.com/stateenergyplan.html.

10 .PXQ"~~digg_Q~:t__0JQtj.9)LQnJl_,,_1:Q:t:t)})Ii~_~jQ:tl__R,,gA~:.:l.i.gg_?_B-"lil.i.lB-":tl_"-"Y_ilhl"J.'_9_D19.liQ__S_til})_di!~d, "Order Authorizing Custonler~sited Tier Program Through 2015 and Resolving Geographic Balance mld Other Issues Peltaining to the RPS Program;" "Order Resolving Main Tier Issues;" issued and effective April 2, 2010.

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e) directed 'NxSERDA to consult with the DPS on the In a December order the Commission upheld its earlier development of a Customer-sited Tier Operating Plan authorization to weight economic benefits at 30% in the

("2010 CST Plan") for solicitation of customer-sited competitive selection process, relaxed fonner incremental renewable resources, and provided the parameters and economic benefits requirements to allow all claims of principles that were to be incorporated therein; and in state spending afler January 1, 2003, and authorized f) established the scope and cost orthe administration NY-SERDA to conduct Main Tier competitive solicitations of the RPS program, reaffimled NYSERDAs role at least annually; and, with the concurrence of the Depart-as central procurement authority, and provided for ment of Public Service, as fh:quently as is deemed neces-the augmented and extended collection of costs from sary and advisable in pursuit of program goals without electric delivery customers to fully achieve NYSER- further or individual authorizations by the Commission. 13 DA's 2015 targets. Subsequent to the December order NYSERDA issued a tentative schedule for biannual Main Tier procurements Later in 2010 the Commission issued three additional available on the NY-SERDA website at: http://www.ny-orders addressing biomass, behind the meter genera- serda.org/rps/PastSolicitations.asp#solicitation.

tion, and Main Tier program rules and future solicita-tions. In an order issued in November, the Commission authorized the use of clean wood separated from con- T~ERED APPROACH TO struction and demolition debris at approved material reclamation facilities to be eligible as "biomass" under ~MPlEMENT~NG THE RPS the RPS programY In a separate order issued in No-The Commission established two tiers of resource vember, the Commission modified the RPS eligibility types under the RPS Program. The larger, Main Tier, rules to qualify "behind-the-meter" customer-sited fa-consists primarily of medium-to-large scale electric cilities. The order includes facilities where the electric generation facilities that deliver their electrical out-energy is delivered through a wholesale meter under put into the wholesale power market administered by the control of a utility, public authority, or municipal the NYISO. Noting the importance of accelerating the electric company to compete for Main Tier RPS incen-development of emerging technologies, because of their tives subject to accurate measurement/metering and environmental benefits and ability to be sited in urban, verification by the facilities, in lieu of the NYISOY heavy .. loaded areas, the Commission also established a Finally the Commission sought public comment on the second, Customer-Sited Tier. The Customer-Sited Tier question of accounting fcyr economic benefits associ ..

consists of smaller, "behind-the-meter" resources, such ated with operating facilities and authorizing a forward as photovoltaic systems, fuel cells, customer-sited wind schedule of competitive solicitations.

" Case 09-£-0843/03 -£-0 188 ;e'.9_~_t?"dj~:t2,.9)LM.9_ti_Qll_QLth,,__C().1))).Dj!i.~.i.()_l)Js_"2,'-.l!:4igg_!\_R'"t?.iLR,"ll"_~'-.l_l:>.l,,__eQ;1fQ)j.9_>5.t?_l)},;?.rg, "Order Appmvin g Petiti on with Modifications," issued and emxtive November 22, 2010.

, .!.'m""_"gil),g_Qll_MQtiQ1

t..9£.th,"_GQ!:nmjo~!i.iQg_R,,,g?.rdjn:::,_'-.l_.R"Hli1..R"g,"Yy?_1:11,"_.!.'m:tfQliQ_SJ!mg~T\. "Order Allowing Main Tier "Behind The Meter" Con-tmcts 3-11(1 'vVholesale Delivery to Utility/Municipal Utility/Public Authority Entities. Applicable to Future Solicitations Only," issued and eft~;;ctive November 24, 2010.

13 .I~rQ_Gf~din.g... _QIL~Yl.QiiQ.:rL~.lfih'~__C.Q.D.I[ni;;,-siQXLR_t}.g...'1I(li[U~_5J~_R}~~_tf:l:ilJs}~~).1'~_~_'1-b}~_E~-![tf~-!li.Q_.sJr:l)Idft13t '>Order Authorizing Additional J\1aill Tjer Sobejtatiolls and Setting Futme Solicitation Guidelines," issued mld effective December 3, 2010.

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facilities, and similar technologies that produce electric-ity for use on site. '4 Only renewable energy systems installed on or after January 1, 2003 are eligible to participate in the RPS, and Customer-Sited Tier resources, and must be located in New York State. While the Main Tier operates through the issuance of periodic competitive solicitations, eligible Customer-sited Tier resources are supported through a combination of incentives for the "buy-dmvn" of capital costs and/or energy production.

Eligible resources and technologies for both the Main Tier and Customer-sited Tier are as specified by the Commission. IS The RPS Program also includes a process for the evaluation of neyv' resources and technologies for eligibility in the program as it progresses.

of approximately 9.8 million MWh from the Main Tier and RENEWABLE ENERGY .6 million MWh from the Customer-Sited Tier.

TARGETS MA~NTENANCE RESOURCE The Commission's January 8, 201 0 Order set fmth annual renewable energy targets that represent an incremental PART~C~PAT~ON glide path to\vard achievement of the 2015 goal of having 30% of the power consumed in New York come from In creating the Program, the Commission recognized that renewable energy. The Commission further detailed the 19.3'/0 of the energy sold at retail in New York was being New York State renewable energy targets and the sup** generated by renewable resources that existed prior to pOliing calculation methodology, necessary to meet the adoption of the RPS in 2004 ("baseline resources' ) For RPS goal in its April 2., 2010 Order. '6 These calcula-* the purpose of ensuring the continuing operation of these tions assume a reduction of our electricity consumption, valuable existing resources, the Commission's September through energy-eniciency efIorts, of 15 percent over a 24, 2004 Order established an additional Maintenance Re-business-as-usuaJ growth forecast for the year 2015, and source program. IS To be eligible to receive RPS program also assume renewable electricity purchases made through fi:mding as a ]VIaintenance Resource, a baseline resource a variety of initiatives including Executive Order 111, is required to demonstrate financial hardship through a Voluntary Market activity (explained later in this repmi), fomlaI request to the Commission. Upon such a request, and Long Island Power Authority contributions. the Commission evaluates the existence and degree of hardship and makes a detemlination as to the eligibility As outlined in the April 2, 2010 Order, NYSERDA's over- of the facility for Maintenance Resource treatment. The all target amounts to approximately 10.4 million megmvatt- Commission mayor may 110t grant Maintenance Resource hours aJillually by 2015 through contributions from both status. If this status is granted, the Commission deter-the Customer-Sited Tier and the Main Tier. 17 This consists mines the foml and magnitude of suppmi to be offered.

14 As noted earlier, as a result of a recent Com1'nission decision, customer-sited generation can now choose to compete for long-tenn conn'acts via the M3jn Tier program component.

I' EI9_<;!,;.\?gj1JZ_Q1:t_iYJ.9.tiQ!1_!1f.ths<_C.9_mmi.!i~j_<:mJ~~"z;!njjng.A_Rs<tl\iLRs<rrsmc~_121s<_EQ1:tfQli.9_JS'l\ng!!nt "Order Approving Implementation Plan, Adopting Clari11cations. and :'v10dif}'ing E,nvironrnentaJ Disclosure Program." Appendix B. issued and effective April] 4, 2005 and; "Order Authorizing Customer-sited Tier Program Through 2015 and Resolving Geographic Balance and Other Issues Pertaining to the RPS Program;" issued and et:,

fective April 2, 2010, 16 Proceeding on Motion onhe Commission Regarding a Retail Renewable Portfolio Standard, "Order Authorizing Customer-sited Tier Progrmn Through 2015 and Resolving Geographic Balance and Other Issues Pertaining to the RPS," issued and effective April 2, 2010, Appendix, Table ]7.

17 ld.

18 E[Qfs<s<ding.!1n_MQtj!J.lLQjJh~,~Qmnti~_~j!1n__R.\?g.i!r_~li_l)g_'l_K,,_t~j.LK"E~,\:yAQl~,J.:~9XtJ9.liQ_.s_t'm.~lclId, "Order Regarding Retail Renewable Portfolio Stan..

dard;" issued and et1ective September 24, 2004.

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Based on Commission determinations. NYSERDA has entered contracts with tvvo Maintenance Resources, the Lyonsdale Biomass Plant located in Lyons Falls, New York, and the Boralex Biomass plant. located in Chateaugay, New York. In combination, the Lyonsdale and Horalex contracts support the retention of approxi-mately 39 MyV of in state biomass capacity and involve approximately 266,000 MWh of annual energy produc-tion. The total funding committed to these multi-year contracts is approximately $33.9 million. These main-tenance resource quantities do not count toward Main Tier incremental energy targets. During the repOlting period, no additional facilities were granted Mainte ..

nance Resource status.

In the Apri1201 0 Order, the Commission reaffirmed that baseline resources demonstrating financial hardship could, through a formal request to the Commission, be consid-ered for Maintenance Resource Treatment. 19 STEPS TAKEN TO SUPPORT THE VOLUNTARY MARKET Several program design features have been incorporated into the Main Tier in an effOlt to support the ultimate program goal of transitioning to the voluntary market.

For example, in the second through fifth JVIain Tier solic- EXECUT~VE ORDER 111 itations, NY SERDA capped Main Tier bids at 95'% of a facility's attributes, thus guaranteeing that a minimum of Executive Order 111 requires New York State agencies to 5% of those facilities' renewable production is available procure 20% of their electricity from renevvable sources for voluntary sales. Also, a handful of Main Tier project by 2010. The affected state agencies have reported to contractors have taken advantage of a program design NYSERDA that, during State Fiscal Year 2008/09 (April feature that permits partial bidding, thus leaving addi- 1 through March 31), 10.1 % of the electricity used in state tional output available for non-RPS sales, including the buildings, or approximately 264,572 MWh, was produced voluntary market in New York. In addition, in the second from renewable sources, exclusive of any Voluntary Mar-through fifth Main Tier solicitations, NYSERDA struc- ket purchase or Customer*-sited Tier production, already tured its contracts to provide flexibility for contractors to repmted in this filing.

suspend deliveries to NYSERDA in order to make sales to the Ne\vYork voluntary green market and, as of April 30,2010, three facilities have exercised this option. 20 PROGRESS AND RESULTS DPS statTrecords indicate that in 2009,498,659 MWh The NYSERDA RPS target, established in the were purchased by 30 Energy Service Companies and Commission's April 2, 2010 Order, for the combined six IUDs and delivered to retail customers in response to Main Tier and Customer-sited Tier, is approximately their interest in clean energy.

10.4 million MWh by 2015. 21 Based on progress through 19 Proceeding em IviotjOH oftbe COTIJrnission ReganJjng a Retajl Rene-wable Portfc)1io Stand3rd~, "Order Authorjzjng Custorner-sited Tjer Progranl Through 2015 and Resolving Geographic Balance and Other Issues Pertaining to the RPS;" issued and effective April 2, 2010.

2') Contractors are not obligated to serve the NY voluntary market with any output not Ullder contract with NYSERDA, while contractors who sus-pend delivery to NYSEPJ)A are required to make sales into the NY vohmtary mm'ket.

2J Em_~.\?"djng,.91J__M.9.ti_Qrr_QLtb."__CQmJ:nill~i.Q_lL.R_<cg,<lIdi.ng_l\_K,,t~j.LK"lL"_w.<lbl"_EQ11fQlj.9_-,~tm:td~'£'L "Order A uthori zing Customer-sited Ti er Program tbn,ugb 2015 and Resolving (J-eograph1e Balance and Other Issues Pertainjylg the RPS Prograrn;" issued and effective April 2~ 2010.

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hydroelectric, are by na1ure intennittent, making it difficult for bidders to estimate their annual and long-tenn dectdc-ity production. In addition, financing and constmction- re-lated impediments can cause delays in facility constmction.

While unfortunate, project development delays and under-performance of operating projects impact annual report-ing of program progress and resultsY As such, data being reported at any given time can reHect unintended variations in performance toward reaching the 20 15 targets.

• Progress represenl> only instolled caplJcily IJnd copacity under controcl with r',NSERDA. Progress does not include llny Gccepled-bu1- Unpredictable production and project delays and not-controcled applicGtions for Customer**si1ed Tier technologies, setbacks have not been overlooked in program and contract design, so as to ensure that the ultimate goal of December 31, 2010 in both the IVlain Tier and the 30% by 2015 is attainable despite project development Customer-sited Tier, NYSERDA expects to procure ap- failures and under.. performance of operating projects, proximately four million MWh by 2015, As presented in For example, under the Main Tier portion of the RPS, to Table 1, this represents progress of about 39% towards the ensure that program goals are met and other projects are NYSERDA portion of the RPS target. afforded opportunities for funding, NYSERDA contrac-tually requires each project to deliver at least a minimum Cunent Customer-sited Tier contracts are anticipated to percentage of the quantity of energy associated '.vith suppOtt the installation of systems capable of producing its bid during each year, If a project fails to meet this 76,945 MWh by 2015, representing 12,3'Y;, of the total percentage for a specified number of consecutive years, Customer-sited Tier portion of the NYSERDA RPS target the annual quantity of RPS Attributes that NYSERDA is As Main Tier facilities that entered operation prior to obligated to purchase from that project may be reduced December 31, 2010 ramp up to a full year's production, for the remaining years of the contract. For example, the and as those facilities selected in the most recent Main Maple Ridge Wind Fann did not meet its obligation to Tier solicitation in March 2010 enter operation during deliver the required 85% of its contracted bid quantity 2011 and 2012, NYSERDA's actual purchases, based on for three consecutive years (2006, 2007, and 2008), As a quantities under contract, are expected to be 3,9 million consequence, this facility's contracted bid quantity was MWh in 2015. This puts New York at 40% of the 2015 reduced for tbe seven remaining years on the contract. 24 Main Tier target. 22 This adjustment represented at that time a loss of ap-proximately 176,000 MWh per year tmvard program

'tlbile approximately four million MWh are under con** targets, Nevertheless, the funds associated vvith that tract for 2015, actual production vvill likely vary from quantity were disencumbered from the project and made time to time. Renewable resources, such as wind and available through subsequent solicitations.

J.2 ]\YSERDA counts toward the lVIWh program targets only the portion of a project's output or potential output that is lmder contract. Contract qua.mities axe as of December 31,2010, including any adjustments to contract quantities trmn those faciEties that have underperfnnned.

'13 Underperfonnance is not lmique to New York. In 2010, leading industry analysts reported actual production below original production expecta-tions nationwide, citing year-to-year namml variability of winds, varied atmospheric conditions, curtailment, and component failures. "Underper-formance Issues Deserve Fresh Examination." NorthAmericanWindpo*"er. Volume 7, Number 10, November 2010, 2-' Percentages and number of years vary by RFP and facility t)11e {wind, hydro, etc.l.

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OAGI0001361_00010 MA~N T~ER The Main Tier facili1ies with active RPS contracts are owned by or affiliated with 14 different entities, as shown NYSERDA has conducted five competitive Main Tier in Table J.

solicitations in pursuit of the renewable energy procure-A map identifying the location of each Main Tier and ment targets as set forth in Table 1. From these five Maintenance Resource facility, either under contract or solicitations at total of 39 projects have active contracts, having a pending contract with NYSERDA, can be found as listed in Table 2. Thirty eight are located in New York; in Figure l. Additional details about each Main Tier and one is located in Quebec. These 39 facil ities are under Maintenance Tier facility pmiicipating in the RPS can be contract to provide a combined 3,958,348 MWh 25 ofre-found in Appendix A.

newable energy per year. from approximately 1.568 MW of new renewable capacity.26 These include two fossil fuel plants that will co-fire biomass as a fuel source, one new F~RST MA~N T~ER 100 percent biomass-fuekd facility, one landfill biogas operation, twenty one hydroelectric station upgrades, and SOUC~TAT~ON fourken wind fatTns. Of these 39 new renewable electric generating facilities, 3l are now operating. and eight are ]\<xSEHDA's hrst competitive Main Tier solicitation under construction or development. (RFP 916) awards were announced in January :2005, with l' This quantity represents annual M\Vh for 20] 1. One contr,lct with AI'S Greenidge will expire at the end of 20] 2, aD.d thm will rednce the total number ofMWh towards program progress]JJ the terminal year of the program \~~(15) to 3.930,000

." "New renewable capacity" generally refers tco nameplate -:apacity at facilities under wniract in the RPS that did not exist prior to the start of the RPS progr3rn, il1cludmg any por6on not under contract wltb NYSERDA.

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an expected facility online date ofJanuary 1,2006. The solicitation was issued as a sealed bid, pay-as-bid Request for Proposal ("RF'P"). In this solicitation, bidders \vere mvarded contracts based on the price bid for RPS Attri-butes alone. No other factors were taken into account to determine selection and the ultimate ;lward of a contract.

The first Main Tier solicitation resulted in contracts for the development of 254 M'vV of renewable capacity at five facilities (two wind and three hydroelectric upgrades),

from \,vhich NYSERDA would provide production incen-tives for 865,582 MWh per year. 27 At the timing of the award, the total funding connnitment associated with this solicitation was approximately $173.6 million, and the weighted average production incentive mvardedwas

$22.90 per RPS attribute.

As of December 31, 2010 the total fimding commitment for RF'P 916 is $131,900,839 and the total production the proposed Jordanville Wind 17arm, failed to meet con-incentives provide for a maximum of 609,402 MWh tract milestones. and the contract was terminated. A.Ilother of clean, renewable power per year. This reduction in facility, Noble Chateaugay Windpark, was split into PRO funding connni1ment and associated M'vVh resulted from contracts at the request of the contractor for reasons related project under-perfomlance, and contract completion for to physical substation configurations and interconnection, three facilities. creating two windparks: Noble Bellmont Windpaik and Noble Chateaugay Windpark (total combined quantities under contract to NY SERDA remain the same). A third SECOND MA~N T~ER [;lCili1y, the proposed Wind[;lITtl Prattsburgh, was cancelled in late 2008, with the contractor citing the then-challenging SOUC~TAT~ON economic enviromnent.

The second competitive Main Tier solicitation (RFP 1037) Under the remaining 19 contracts, 671 MW of new mvards were announced in February 2007 with an expect- renewable capacity is under contract, from which NY-ed facility online date of January 1,2008. Unlike the first SERDA could provide production incentives for ap-Main Tier solicitation, awards were based on two evalu- proximately 1,800,000 MWh per year. At the timing of ation components: (1) the bid price, weighted at 70'~1o; the award, the total funding commitment associated with and (2) the ability of the bidder to demons1rate economic this solicitation was approximately $266.3 million, and benefits to Nev{ York State created by the development, the weighted average price awarded was $15.52 per RPS construction and operation of the bid facility, weighted Attribute.

at 30 percentY The solicitation was designed as a two-step process, consisting of: (1) an application step that As of December 31, 2010 the total funding commitment pre .. qualified bidders; and (2) a competitive bid proposal for RFP 1037 is $260,868,101 , and the total production submission step. Only those bidders found pre-qualified incentives provide for a maximum of 1,784,479 MWh through the Step 1 application process, were permitted to of dean, renewable pO\ver per year. This reduction in submit bid proposals in Step 2. funding commitment and associated MWh resulted from project under-performance by five filcilities, and contract The second solicitation resulted in NYSERDA mvarding suspension to sell into the Voluntary Market by three contracts to provide production incentives to 20 new or facilities. All funds for underproduction and the MWh upgraded [;lcilities, all located in New York. One facility, suspended were disencumbered.

27 There were initially seven hidders that won contracts in this solicitation, but two facilities. the Criterion Wind Farm and the Jersey Atlantic Wind Farm, failed to meet commctual ohligations, and their contmcts were terminated.

This solicitation stmcture '"as authorized by the Commission's October 19,2006. Proceeding on Motion onhe Commission Reg3xding a Retail K<C11\?y{!lhkJ:-"Q.TIt9JjQ_Sl<n}Jl~Id, "Order Authorizing Solicitation Methods and Considemtion of Bid Evaluation Criteria;" issued and effective Octo-ber 19, 2006.

OAGI0001361_00012

The fomth solicitati on resulted in the award of contracts TH~RD MA~N T~ER to five new or upgraded facilities. Under those contracts, SOUC~TAT~ON contractors are obligated to build 142 MW of rene\vable capacity, from which NYSERDA could provide produc-The third competitive Main Tier solicitation (RFP 1168) tion incentives tor approximately 578,656 MWh per year.

was completed in the first qUaIter 01'2008 with an ex- At the time of a\vard, the total funding commitment as-pected facility online date of Janll ary 1, 2009. Awards sociated with this solicitation was approximately $96 mil-were announced in January 2008 and were based on price, lion, and the \veighted average price awarded was $19.76

'vveighted at 70%), and economic benefits to Ne'vv York per RPS Attribute.

State, we ighted at 30'-/0. The solicitation followed the same two-step bid evaluation process employed for the As of December 31 , 2010 the total ftmding comm itment previous solicitation. for RH) 1681 is $21,983,298, and the total production incentives provide for a maximum of [55,002 MWh of The third solicitation resulted in the execution of contracts clean, renewable povv'er per year. This reduction in fund-for 11 new or upgraded facilities, representing approxi- ing commitment, and associ ated MWh., resulted from the mately 824,550 MV{h per year. 29 At the time of award, the failure ofhvo mvardees to enter into total funding commitment associated ',lVith this solicitation a standard foml contract.

was approximately $118.6 million, and the 'vveighted aver-age price awarded was $14.75 per RPS Attribute. Three facilities, Noble Aliegany \Vindpark, Noble Chateaugay FIFTH MA~N TIER Windpark II, and Windt~lrm Prattsburgh, (which had con-tracted for [O~'i.) of its output under RFP 1037 and all ad- SOUC~TATION ditional30% under RFP 1168), were cancelled citing the The fifth competitive Main Tier Solicitation (RFP 1851) challenging economic environment that ex isted in 2008.

mvards were made in March 2010, with an expected facil-As of December 31, 2010 the total funding commitment ity online date of December 31, 2011. This solicitation

\vas issued in response to a Januaty 2010 Public Service for RFP 1168 is $73,270,739 and the total production incentives provide for a maximum of 484,458 M\Vh of Commission OrderY As was the case tor previous solici-clean, renewable power per year. tations, awards \vere based on price, weighted at 70%; and economic benefits to New York State, weighted at 30%.

The solicitation follmved the same two-step bid evalua-FOURTH MA~N TiER tion process employed for the previous solicitations.

The fifth solicitation resulted in the mvard of contracts to SOUC ~TAT~ON provide production incentives to eight new or upgraded facilities. Under these contracts, contractors are obligated The fourth competitive Main Ti er Solicitation (RFP to build 318 MW of renewable capacity, from which 1681) awards were announced in December 2009 with an

N'YSERDA could provide production incentives for ap-expected f.'lci lity online date of July 1,2011 for non -fue l proximately 1,100,000 MV,,'h per year. The total fimding based facilities, and July 1,2012 fo r fhel-based facili-co mmitment assoc iated with this solicitation \vas ap-ties. Thi s solicitation \vas issued in response to an August proximately $204 million, and the weighted average price 2009 Public Senrice Commission Order.30 As was the case awarded was $21.17 per RPS Attribute.

for previous solicitations, awards were based on price, weighted at 70%), and economic benefits to New York Subsequent to the announcement of the awards for RFP State, weighted at 30'%. The solicitation followed the 185 1, one bidder's award was rescinded and contract same t\vo-step bid evaluation process employed for the awards were made to the next highest ranked bidders previous solicitations. that could be funded with the approved solicitation 19 Ora; facility t~li J ed to enter into a cont;'uct after being notified of an aw-ard.

30 Proceeding on Motion ofthe Commission R.egardillg a Retail Renewable POlifolio Standard. "Order Authori zing Additional Main Tier Solicitation and Sdting Solicitation Guidelin es;" issued and efl'xtive August 21, 2009.

jj Proceeding on Motion of the Commi ssion Regarding a Rerojl Rene'Nable Portfolio Standard, "Order Establishing New RPS Goal and Resolving Main Tier Issues;" issued and effective January 8, 2010.

OAGI0001361_00013

budget This included t\vo hydroelectric facilities and The Commission also established guidance on program one wind farm. As a result, the adjusted total funding implementation, capacity and energy targets, authorized is now $180,368,284 and the total production incen- increased incentive funding of $429 million, and directed tives provide for a maximum of 925,007 MWh of clean, NYSERDA to develop a ne',v CST Operating Plan ("201 0 renewable power per year. The funding associated with CST Plan"), NY SERDA, in consultation with the DPS, the reduction in MWh contracted is now available for established the 2010 CST Plan, which sets forth general fhture solicitations. The adjusted vv'eighted average price program specifications, capacity and generation targets, for RFP 1851 was $19.50 per MW1L and associated budgets. The 2010 CST Plan was adopted on June 29, 2010, and can be found at:

The aggregate MWh weighted average award price from http://www.nyserda. org/RPS/NYSERDA_ Operating_

the five Main Tier solicitations is $17.90. The first solici-Plan. pdf.

tation yielded the highest weighted average award price

($22.95) while the third solicitation resulted in the lowest Combined with previously authorized funding, the April

($14.75), As is illustrated in Figure 2, average contract decision results in a total program budget for the CST mvard prices under the second (RFP 1037) and third (RFP program of $532.375 million (see table 4).

11(8) Main Tier solicitations were more than 30% lower than under the first Main Tier solicitation (RFP 916). Budgets provided in Table 4 are for program costs only.

Prices in solicitations 4 (RFP 1(81) and 5 (RFPI851) Costs for program administration and evaluation are pro-have trended some\vhat higher than the previous two vided for separately in the April 2, 2010 Order.!4 solicitations but were also below the initial solicitation weighted average price. This increase in attribute price The estimate of installed capacity and energy produc-may be attributable to recent financial conditions precipi- tion associated with projects under contract by the end of tated by the financial crisis. 2015, associated with total CST program funding autho-rized under the 2007 and 2010 CST Operating Plans, is expected to approximate 285 MW and 623,390 MWh. as outlined in Table 5. 35 The achievement of the targets set forth in Table 5 will be measured on the basis of energy RFP 916 RFP 1037 RFP 1168 RFP 1681 RFP 1851 Jan. 2005 Dec.2006 Nov. 2007 Oct.2009 Mar.2010

';';';';';';';'Weighted Avg. Attribute Price CUSTOMER~S~TED T~ER In an April 2, 2010 Order,32 the Commission established new CST program goals for the previously approved CST technologies (PV; fuel cell, ADG, and on-site wind installations), authorized a new CST program aimed at encouraging additional customer-sited installations in the dO\vnstate region (NYISO Zones G, H, I and J) referred to as the Geographic Balance, and authorized solar ther-mal energy systems as a new eligible CST technology.

Proceeding on lviotion ,-,nhe Commission Regarding 3. Retail Renewable Portfolio Standard, "Order Authorizing Customer-sited Tier Program through 2015 and Resolving Geographic Balance and Other Issues Peliaining the RPS Program;" issued and effective April 2, 2010.

33 Ul1bke the other progrmns described in the table, the (i-eographic Balance prograrH incentives and iUlplerrJentation service budget are not restricted to supporting one technology.

J"e,g_~_t?"dj~:t2,gXLMg_ti9.11_QLth,,__C()}2])}1i!i.~i()))JS_"2,'..lx4igg_!\_R"t?jjJ~!.l2_~'..l_tJ1"J::Q;:t:.fQ)jg_>5.t?)]},;?Xd, "Order Authorizing Customer-sited Tier Program through 2015 3~ld Resolving Geographic Bahmce and Other Issues Pertaining the Rl'S Program;" issued ,md eflectiveApri12, 2010.

15 Td.

OAGI0001361_00014

production associated with funding that is "encumbered/

contracted" or "pending contracting" as of the end of program year 2015. As noted by the Order, the "figures illustrate expectations" and are not intended as hard targets.]6 Actual rates of achievement are expected to vary 1"~Gte: Geographic Balancing Gnd SGlGr Thermal progroms Gre recently somewhat from these tlgures.

authorized; program activities will commence in 20'll.

Progress tmvard program goals, measured in terms of ca-*

pacity and energy associated with contract commitments Geographic Balallce Program was designed to encour-and contracts that are pending effective December 31, age additional customer-sited installations of larger-scale, 2010 is presented in Tables 6 and 7. renewable elec1ric generation in the downstate region (NYISO Zones G, H, I and J). The program is designed General descriptions of the CST programs included in the to facilitate larger installations of eligible projects (above 2010 CST Operating Plan are presented below. 50 kW), including renewable biogas projects that accept deli very of biogas from a pipeline delivering the fuel from Solar PV Program was issued in March 2008 to replace a separate location to the generating electricity. These the similar System Benefits Charge ("SBe') funded PV larger installations are coordinated with distribution com-incentive program. During 2010, NYSERDA revamped panies within the target zones, and other stakeholders. The the PV application and contracting process, which has re- program seeks to identify and address institutional and sulted in significant reductions in the review and approval teclmical barriers to installation, minimize potentialrnar-process time. Despite a downturn in applications, and a ket confusion, and assess electric grid and location-based slow economy with unemployment figures approaching value of installations. The primary delivery mechanism ten percent, the program was able to commit 81 % of the for the program will be one or more annual competitive

$24 million 2010 budget \vith a projected MWh output of solicitations; PON 2156 was issued in March 2011.

81 % of the 2010 goal. NY SERDA anticipates that recent improvements in the economy should enable the program Fuel Cell Program was released in December 2007.

to maintain a high level of activi1y in 20 II. Incentives are provided in the form of capacity buy-down and perfomJatlce-based payments for commercially The PV incentive program is offered through an open en- mature fuel cell modules (experimental fuel cells are rollment solicitation designed to offer the lowest incentive supported through the System Benefits Charge). Program possible to continue to grow the market for PV Incentive payments are differentiated by the scale and type of ap-levels are open to adjustment to address consumer demand plication of fuel cell system.

and market factors in a way that will avoid program "starts and stops" and to enable renewable energy business to con*- In 2010 NYSEEDA re-issued PON 1150 based on the tinue to grow in New York State. The program has integrat- Bridge Funding available in the amount $1.8 million; the ed an electric: energy dI1ciency ;llldit as a component of the program was reopened from April 2010 to the end of program. The current program, PON 2112, opened on July June 2010 during which time one additional small fuel 1,2010 and remains available through December 31,2015. cell application, representing 10 kW ,vas received and

'J6 Id.

OAGI0001361_00015

t'-lote: Geographic Balnnce and Solar Therrnol progrcms am recently authorized ond progrorn cctivities will commence in 20 -I i_

approved. The Fuel Cell Program was not re-opened in small fuel cell systems that were intended to operate in the remainder of 2010, as the program \vas being rec\e- standby mode only \vere allowed to participate in the signed to better meet stakeholder and market needs. program; this resulted in a higher degree of activity in the marketplace, as indicated by the 22 applications for NYSERDA expects different degrees of program uptake small fild cells received and approved in 2009. rON for large fuel cell systems versus small filel cell systems 2157 was issued in March 2011.

in 2011. l.arge Fuel Cell Systems are expected to show ro-bust activity in 2011 ,""hereas small filel cells are expected Anaerohic Digester Glls-to-Electricity Program to show minimal activity in 2011. was first released in August 2007. The program \vill be continued with a similar stmcture, providing capacity There are only a few Original Equipment Manufacturers and perfomlance incentives for ADG systems installed

("OEMs") oflarge fuel cell modules, and their business at farms treating manun; and other agricultural waste practices dictate the uptake oflarge fuel cells in the mar- products, wastewater treatment plants, and businesses that ketplace. Recent changes in these business practices will treat organic \vastes.

support a vibrant marketplace for large fuel cells in New York State (since mid-October 2010, NYSERDAhas re- NYSERDA offered funding for the ADG program via ceived applications for eligibility certification from three PON 2138, "vhich opened in late November 2010 and large fuel cell manufacturers representing four different fuel cell models; three ofthese applications have been determined to be complete). In years past, there were only two OEMs oflarge fuel cells that \vere enrolled in the program, and they chose not to actively market their then-CST-eligible models. Recently, one of these OEMs has created a ne',v model that is now CST-eligible and they are eager to actively market it. Also recently, a third OEM has submitted paperwork to enroll in the program.

In consultation with DPS stall, NYSERDA has agreed to limit small fuel cell eligibility to continuous-duty installations only, and has redesigned the incentives for small fuel cells to reflect this new requirement.

NY SERDA staff has been working vv'ith manufactur-ers of small fuel cells to identify and certify systems under the new eligibility requirements. In years past, OAGI0001361_00016

Note: Geographic Bolonee one So:nr Thermo: proqrams ore recently outhorized, and pmgrom activities will commence in 2011.

closed December 31, 2010. During this brief time, 19 one based on nameplate rating of the wind turbine to one applications, representing 10,794 kW of new generating based on computer-model-predicted-output). As of the end capacity, and requesting slightly more than $18 mil- of201O, 16 applications had been received and 10 ap-lion of incentives, were received. This level of activity proved under the updated program. The total number of significantly exceeds the 2010 budget of $13 .275 mil** applications received in 2010 under PONs [098 (7) and lion. Throughout the early and mid pmis of2010 while 2097 (16) represent 297 kW of new capacity.

the PON was closed, NY SERDA engaged stakeholders and the NYSDPS to explore implications for revising the NYSERDA is currently planning to extend PON 2097 to way the PON makes claim to RPS Attributes, associated remain open through December 31, 2011. PON 2097 is payment structure, and other details. Vibrancy of market an open-enrollment solicitation. Throughout 2011, displayed via applications received in 2010 indicates the NYSERDA will engage with stakeholders to explore program should maintain a high level of activity in 20 [1. creating a pair of solicitations for 2012 and beyond; one NY SERDA anticipates additional funding will be avail- that will be an open-enrollment fonnat aimed at systems able through PON 2276 by May 2011. below a size threshold, and the other a competitive fonnat aimed at systems above that size threshold.

On-Site Wind Program was released in April 2007 . The program approach going forward will initially focus on Solar Thermal Program is a new application-based regular and predictable competitive solicitations. Never- program with incentives for solar hot water systems tor theless, should such approach inhibit growth in participa- all sectors. This program integrates an electric energy ef-tion, an open-enrollment program component may also ficiency audit as a component of the program. Solar Ther-be used. System design and installation will be subject to mal hot water systems receive incentives as an alternative verification and inspection respectively. to electric water heating only. Only electrical energy savings associated with solar water heating \vill contribute In 2009, the On**site Wind Program, through PON [098, to program goals.

received and approved 37 applications tor a total program cost of$l ,092.,000 (by December 2009 all program fhnds Funding for the Solar Thermal program is available had been committed and the program closed). From April through PON 2149, which opened in December of 20 10 2010 through J UIle 2010, PON 1098 was reissued using and remains available through December 31, 2015, Since

$300,000 bridge fimding; during this period, seven applica- December 2010, NYSERDA has received 21 Installer tions v{ere received and six approved. Following stakehold- Applications, and the entire 2010 incentives budget er input, a revised solicitation was issued at the beginning remains unencumbered. Since PON 2149 is NYSERDA's of October 2010 with a closing date of June 30, 20 11 (the first open enrollment Solar Themlal offering; we do not major revision was to change the incentive structure from have historic data to predict the level of demand for the Program in 2 OIl.

OAGI0001361_00017

ECONOM~C Additionally NYSERDA has proposed that $900,000 of the unencumbered 2010 budget for Solar Thermal be used AND to fund Solar Them1al Awareness and Outreach drorts. ENV~RONMENTAl ~MPACTS NYSERDA tlnnly bel ieves that the marketing of solar thennal technologies is necessary to grow the market. In its September, 2004 Order, the Commission identified Consumer a\'lareness and outreach initiatives are to begin economic benefits to Nnv York State as one of1he folTtJal in 20 II and conti nue through 20 l3. objectiws ofthe RPS Program. Progress in the program through December 3 l, 20 lOin meeting thl' RPS targets Figure 3 (RPS Funded Solar PV Installations by has yielded, and is expected to yield, significant economic County) and Figure 4 (RPS Funded CST InstaJlations- benefits to the State ofNe\,y York and its associated locales.

Exc:lusive ofPV) below display a graphical summary Economic benefits accme from the planning, development, of the progress in the Customa Sited Tier through constmction, and operation ofrenewabk energy facilities.

December 31, 2010. As Egure 3 illustrates, the major- These economic benefits come in the foml of long and ity of the solar PV projects (ll33!, or 48% of the total) short term jobs, property tax or payment-in-lieu of tax ben-are located in and south of Columbia County \'lith the efits to local governments and school districts, biomass fuel highest concl'ntration ofprojec:ts (228) being locakd in purchases, as well as from lease and/or royalty payments Ulster County. to landowners and the in state purchases of goods and 37 Based upon an independent pmgmm evaluation report prepared by KEMA in 2009, rl)is figure is agrxegated fi'om bld mff)nnation prcmded by the facili-ties during the bid evaluation and award selection process. Contract terms rec)uire that j,,,:ilities demonstrate actual investment or no less than 85% ofthe bid-based amount, or they 'Hill be permhzed through a lowering ofthelr contract price. New York :\1ain Tier, Impact and Process Evaluation, KE:\1A, Inc.

available at: http://www.nysel'da.ol'g/Encrgy__ hrlorrnation/KEl\1A_ RPSEvaluation%20N1AR~~2030 )'lllal.pdf

" This report W,lS prepared for NYSERDA by its contfactor, KEMA----New \'ork Main Tier RPS: Impact and Process Evaluation, and published m March 2009.

OAGI0001361_00018

servic('s. For example. long**kryt] jobs include such posi* Th(' new ['('newable generation capacity from the five tions as asset and project management jobs, operations and Mai n Tier competitive sol icitations is also expected maintenance jobs, and administrative staff. Payments in to provide environmental benefits to the State of New lieu of taxes inject money into towns, counties and school York. The environmental benefits of having electric-districts. without requiring additional st:rvices. Similarly, ity generated by the RPS facilities, as opposed to the host community paym('nts invest mor(' dollars directly Stak's "system**mix." amounts to approximately 2,009 to a community where a new renewable project is sited. tons of nitrogen oxides, 2,987 tons of sulfhr dioxides, Project development and constmction also creates localized and two million tons of carbon dioxide per year in demand for short-tenn laborers, who in tum fill New York reduced emissions.

State hotels, motels and restaurants. These direct economic benefits have a signincant impact on N('w York's economy, NYSERDA estimates that New York could realize up to PROGRAM FUND~NG

$2.[ billion in direct ('conomic benet"i1s over the ('xpected 20 year life of the facilities with active contracts under the AND BUDGETS first five main tier solicitations. 37 When the dIects induced NYSERDA's activities and responsibilities under the RPS on the broader economy are considered. the total economic are funded through quarterly payments made to NYSERDA benefits have been estimated to more than doubJe. 38 39 Proceedmg on Motion of the Commission Regarding a Rc'wjj Rc'ne'"able Portfoho Stmldard, "Order Authorizing Customc"l'-sited Tier Program through 2015 and Resolving Geographic Balance and Other Issues Pertaining tbe RPS Progr'lm;" issued and effective April:2, 2010.

OAGI0001361_00019

$3.J

~,,1ain Tiedrllaintenancc Tie;

C!~5tO(nc~l" Sited Tier

Admin:;tration

NYS Cerst Re-:overy rees by the major TOUs in the state; Central Hudson, Con as many additional tasks are routinely performed as part Edison, NYS Electric and Gas, National Grid, Orange of program administration.

and Rockland, and Rochester Gas and Electric. These 10Us recoup the payments made to NYSERDA through a The Commission's April Order recognized the difficulty System Benefits/RPS Charge on retail customers' monthly in predicting every contingency with respect to establish-utility bills. ing a program budget that spans many years.41 The Order therefore directed NYSERDA to submit a revision to the In its April 2, 2010 Order. the Commission specified a 2010 CST Operating Plan, and provided that, at the con-total program budget through 2024 in an amount totaling clusion of each calendar year, NYSERDA would calculate approximately $2.998 billion. 39 This funding is to be used the unencumbered funding balance in each CST technolo-*

by NYSERDA for long-term contracts for Main Tier and gy category. Based on those calculations, and in consulta-Maintenance resources, Customer Sited Tier incentives, tion with Department of Public Service Staff, NYSERDA NYSERDA administration, and program evaluation, Cus- would file a proposal as to whether those unencumbered tomer Sited Tier system Quality Assurance/Quality Con- funding balances should be added to the same technology trol ("QA/QC"), and NYS cost recovery fees. The major category budgets for the present year, or reallocated.

categories and amounts of funding by each category are presented in Figure 5. As was described in the 2010 CST Plan, the budget and associated funding authorized by the Commission for The Connnission's April 2, 2010 Order provides a program administration did not specifically account for description of program administration that lists develop- necessalY expenses for quality assurance and control ing and issuing Program Opportunity Notices for each associated with implementing CST programs (QA/Qc),

technology. developing and issuing a solicitation for the inflationary increases, accurate costs assessments under Geographic Balance component; reviewing and analyzing Public Authorities Law Section 2975, nor for marketing each application; performing project revie\vs to ensure and outreach that might be necessary to deliver new or proper commissioning and operation prior to issuing expanded programs. As NY SERDA provided in the Plan, payments; perfonning measurement and verification; and QA/QC expenses are necessary to ensure that the CST perfonning monitoring of system performance through program supports systems that are safe, reliable, and real-time internet-based systems. 4ii While this list of etIective. Therefore, as a part of the January 2011 filing activities describes a considerable portion of the activities made in accordance with the Commission's April order, that are necessary to program administration, NYSERDA NYSERDA submitted on January 31, 2011 for Commis-understands that the list was not intended as a limitation, sion approval, a petition to adjust program budgets to address the above-noted matters."2 4'J rd.

41 rd.

OAGI0001361_00020

FUND~NG COMM~TMENTS expenditures, and funding coItlTtlitments from contracts andlor pending contracts and applications.

AND EXPENSES NYSERDA's actual expenses through December 31, As of December 31,2010, approximately $882,1 million, 2010 have totaled $212.3 million, or approximately 7'%

or roughly 29% of the total approved RPS funding, has of the total RPS budget The large majority of these been expended or committed to achieving NYSERDA's expenses, $195.2 million have resulted from payments 2015 targets (inclusive of administration and NYS fees). for Main Tier and Maintenance resource contracts as This includes $702.3 for program resource acquisition \vell as Customer Sited Tier incentives. Figure 6 illus-costs in the Main Tier, inclusive of Maintenance resource trates NYSERDA's major expenses through December obligations, and $158.7 million for the Customer Sited 31,2010. Actual program revenues and costs as well Tier. Appendix B, Renewable POlifolio Standard Financial as projected future revenues and program costs can be Status Report, presents the program's detailed budgets, found in Appendix C, Current RPS Program Projected Cash Flmv Estimates.

Main Tiel/lv1aiflter.ance Tier

Customer Tier

Adminstration

!'-JYS Co~t Recovery Fee

':': Evaiudtion "2 NYSERDA's Januilry 3],2011 petition to the Commission Ciln be fOUlld here: http://docllments.dps.state.ny.lls/pllblic!MatterManagement/Case-Master.aspx'!MalterCaseNo~03-E-0188 OAGI0001361 00021

OAGI0001361_00022 Hi~jley and Browns Falls had one-yem aQmements, thus enabling participation in RFP 1037. Only Contmct quantities fwm RFP 1037 wiil be used when calculaling progress toward 2015 tW"Qets.

• • Bem Creek windfarm hod a four-yem contract thot expired on .January:31, 2010. Oniy Contract qUGntities from active contracts will be used when caiculoting prowess toword 2015.

• • • Dutch Hili, Cohocior1, and Hardscrabble wind farms were awarded contracts fOI" a percentage of output under multiple RFPs. The total new lac:ilily copocity is iisled once.

• • • • MYVhs fwm AES Greenidge wiil not count towmd pmwess in the tel"minal year of the prOWGnl (20i 5) as this fGcility's contract expires at the end of 2012.

• • • • • Lyonsdale Biomoss Gnd Borolex Chateaugay BiomGss wem Guthorized by the PSC:: to participate as Maintenance Resourcesi therfore it is not induded with "new renewobles."

OAGI0001361_00023

B- 1

• OAGI0001361_00024

• Qua::1y Assuronce/Quolity Con1ro!

Additional Funds Available:

Cunlulative Interest Earnings/tOC proceeds not yet epproved tol- expenditure is $3,188,'166, Expended: Controctor invoices processed for payment by t'~YSERDA Encumbered: Remaining funding obii~joted under a contract, purchese ol'der, or incentive awe I'd ,

Pr'e,Encumbered: Planned funding for contracts aworded and under negotiation; ond planned funding under adive development through open solicitations with upcoming proposo: due dates, OAGI0001361_00025

C> 1 OAGI0001361_00026

Note: On .Jol1uory 31, 2011 ~iYSERDA filed G petiiic;n with the PSC to reollocote funds to cover cun'ently estimoted unfunded expenses, inciudinD opproxirnote!y

$4.4 million for progmm administrotion expenses (inclusive of Customer Sited Tier Quolity Assurance ond Quality Control (OA./OC) costs), ond opproximately

$34.2 rniiiion fo, t,~yS Fees for the 2011-2024 time period Th(Y;e ec;tirnoted unfunded ~JGlollces ore not included in the obove toble. The ,ionumy 31,2011 filing with the rosc requests that unfunded O,<\/OC costs be funded through uncommitted pro,]ram odministmtion fundinq to the extent such funding is ClvCliI*

oble, 'Nith ony rernoininq boionce funded through re-ollocotion of CST pro~yGn1 funds. The fiiing olso requests thot unfunded costs (1Sso(iGied with the NYS fees be funded throuqn the use of alreody earned interest ond letter of credit proceeds not otherNise pmviously authmized, with ony bolance thereofte r beinq funded p"o-rotG by Customer-Sited ond ;'ykJin Tie" progrom fundinfJ. The (U'Tent petition did not otternpt to odd"ess Qt,/QC costs for yems beyond 2012, nor did it contemplate the use of future interest eCirnings, olthouDh both of those items ore estimated in the obove toble.

OAGI0001361_00027

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OAGI0001361_00028