RPS Customer-Sited Tier Regional Program

Summary

Note: The first proposal deadline was recently extended from November 8, 2012 to December 5, 2012. Subsequent proposal deadlines remain unchanged.

In March 2011 the New York State Energy Research and Development Authority (NYSERDA) began a new program offering incentives for customer-sited photovoltaic (PV) and biogas electricity generators of larger than 200 kilowatts (kW) located in certain regions of the state. The program is part of the Customer-Sited Tier (CST) of the state's renewable portfolio standard (RPS) and is funded by the RPS surcharge collected on the electricity bills of customers of the state's major investor-owned utilities (IOUs).  The regionally limited approach for this incentive program is an attempt to create greater geographic balance between the collection of RPS funding and the location of RPS-supported projects; however it has been modified somewhat from past rules under the most recent solicitation (PON 2589). Under the August 2012 solicitation program eligibility for biogas projects remains as it was under prior offerings; limited to systems sited within New York Independent Systems Operator (NYISO) Load Zones G, H, I, and J. For solar PV projects, NYISO Load Zones A - J are now eligible with the addition of Load Zones A - F under the current solicitation.

The incentive is based on actual and expected energy production from qualified systems. In order to participate in the program, applicants must submit a bid to NYSERDA as a $/kilowatt-hour ($/kWh) incentive request. Individual system size is also limited to that needed to supply 110% of historic or calculated on-site electricity needs. A bonus of 15% from the requested incentive level is available for projects that are located in certain Strategic Locations defined by individual utilities. Renewable biogas electricity generation facilities may include a variety of different technologies (e.g., fuel cells, microturbines, etc.) but incentives are limited to electricity generation. Renewable biogas may be locally fed to an electric generator, or directed through a pipeline as long as the biogas originates within the Zone Group (Zones G and H, or I and J) of the generator it serves. Please see the program web site for information on a variety of other equipment, application, and technical requirements.

The bid evaluation process is competitive, and projects which meet the screening and technical criteria will be ranked based upon incentive bids. NYSERDA has also calculated a Maximum Acceptable Incentive Bid above which no requests will be funded. Incentives are limited to 50% of the installed cost of the equipment; to $6 million per applicant per round (including any Strategic Location bonuses); and $3 million per individual project. If selected for incentives, the applicant will be required to conduct an energy efficiency assessment to identify possible improvement measures related to electricity use.

Projects which are approved for incentives are entitled to both up-front payments and performance payments for up to three years. The payment structure is as follows:

• First up-front payment: 15% of the incentive bid (plus the 15% Strategic Location bonus if applicable) times the estimated energy production of the system over three years. This payment is issued upon demonstration to NYSERDA that all major equipment has been procured and transported to the site, and that all applicable permits have been obtained.
• Second up-front payment: 15% of the incentive bid (plus the 15% Strategic Location bonus if applicable) times the estimated energy production of the system over three years. This payment is issued once the project is interconnected to the grid and has proven capable of providing performance data.
• Performance payments: Performance payments are issued annually based on actual energy production. For any given year, the payment will be 70% of applicant's incentive bid (plus the 15% Strategic Location bonus if applicable) times the actual energy production.

Although current PON has a deadlines of December 5, 2012; March 14, 2013; and August 29, 2013,  the program itself is scheduled to last through 2015. While the original budget for this program was set at $150 million through 2015, in April 2012 the PSC added an additional $36.4 million for 2012 and $40.5 million for 2013, bringing total funding to roughly $227 million. The current solicitation includes overall funding $106.9 million broken up by year and groups of NYISO Load Zones. Please see the program web site for further information on how to participate.