Judge’s Ruling on PSC Reset Order, Part 3: What Now?

The case was tried, the judge ruled, but the jury’s still out on the future of the New York energy industry: welcome to Part 3 of “Resetting the PSC’s Reset Order”!

  • Part One gave a ‘barebones’ overview of the ruling vacating the Reset Order.
  • Part Two dug deeper into the Vacating Order and what we’re likely to see in the near future.
  • Part Three discusses next steps for the retail energy industry.

As noted in Part 1 and Part 2, the New York Public Service Commission’s (“PSC”) contentious February 23 ‘Reset Order,’[1]  was successfully challenged in court by several retail energy associations. The judge found that it was the PSC’s process that was ‘arbitrary and capricious,’ but agreed with the PSC that it has the legal authority to impose ratemaking regulations on the ESCO market. Thus, the judge’s decision does little to ease the recent turbulence of the New York market or add much clarity to the limitations – or lack thereof – of the PSC’s authority.

It is important to recognize that neither the Order nor the PSC are the sole causes or drivers for the recent changes; Renewing the Energy Vision (REV), New York’s need to reduce transmission congestion and increase transmission capacity, the rise of renewables and distributed energy, and concerns of possible utility ‘death spirals’ all play a role, interacting with each other, and, as with the Reset Order, sometimes leading to unexpected developments. That said, the following (which are discussed in detail below) are likely to be the important trends and takeaways in the near future:

  • Increased compliance and entry requirements;
  • Increased enforcement of non-compliance;
  • Renewables will have a place in the energy market in the future;
  • Other states are not necessarily following New York’s lead;
  • There are plenty of opportunities to participate in the debate; and,
  • REV and emerging technologies represent potential growth areas for ESCOs.

The New York PSC Will Continue to Heighten Compliance/Entry Requirements & Enforcement for Non-Compliance

In its press release following Judge Zwack’s ruling, the PSC made it clear that it considered his decision merely a detour to its ultimate objective: “This injustice will be short-lived. The Court’s decision recognizes the Commission’s authority and firmly sided with the Commission that it is both our right and obligation to protect consumers against price gouging and other abuses. We will and we must use this authority…

  • Make Sure It’s Spelled Compliant, Not Complaint

The legal battle against the Reset Order was also notable for what it did not address: Reset Ordering Paragraph No 4.[2]  Continue reading

NY Passes New Nuclear Procurement Compliance Cost on and Imposes New Renewable Compliance Obligation on ESCOs

By: Meghan Boland, Esq.

Adding to what is shaping up to be one of the most volatile years for the New York energy market on record, the New York Public Service Commission (“PSC” or “Commission”) issued a REV-related order (“CES Order”) on August 1, 2016, amending its Clean Energy Standard to include a Renewable Energy Standard as well as a brand-new Zero-Emissions Credit Requirement (“ZEC”) program (Cases 15-E-0302 & 16-E-0270).

To meet the state’s goal of 50% renewable electricity by 2030, the CES Order added a requirement that ESCOs and all other load serving entities (LSEs) pay a compliance cost associated with administratively determined subsidies provided to “at-risk” renewable generation facilities.

In addition, it also created a Zero-Emissions Credit Requirement designed to provide financial incentives for struggling nuclear power plants facing, including Ginna and Fitzpatrick, and the resulting loss almost 1500MW from the grid.

The CES Order is broken into three tiers, which are discussed below.

Continue reading

Judge Rules on PSC Reset Order, Part 2: Who Won?

By Lena Golze Desmond, Esq.

Pyrrhic victory or the Greeks at Thermopylae? Drastic expansion of ratemaking authority or continuation of the status quo? And what does this all mean for the future of New York’s retail energy market? Welcome to Part 2 of “Resetting the PSC’s Reset Order”; an examination of the recent judicial ruling on the New York Public Service Commission’s February 23 Reset Order.

  • Part One  gave a ‘barebones’ overview of the ruling vacating the Reset Order
  • Part Two digs deeper into the Vacating Order and what we’re likely to see in the near future
  • Part Three will discuss next steps and potential opportunities for the retail energy industry

As noted in Part 1, on July 22nd, a New York Supreme Court judge vacated most of the Commission’s contentious February 23 ‘Reset Order,’[1]  which was challenged in court by several retail energy associations. (For more information on the original Order, please click here). However, the judge determined that it was the PSC’s lack of proper notice – not lack of authority – that violated the law. It is still unclear whether the PSC now has to ‘go back to the drawing board’ or if its April SAPA notices are sufficient to replace the Reset Order, and if this ruling now means that the PSC has legal ratemaking authority over ESCOs. Despite these open questions, the PSC has signaled that it intends to move forward with the requirements first outlined in the February 23 Reset Order.

“Any inkling of the type of change”

After examining the history of the New York retail market, the PSC’s ongoing proceedings addressing the retail energy market, and the contents of the February 23 Reset Order, Judge Zwack concluded that the Reset Order did not meet the legal standard of providing a ‘meaningful’ opportunity to be heard and respond. Continue reading

FERC Issues Proposal to Alter MBR Reporting Requirements

At the Federal Energy Regulatory Commission’s (“FERC” or “Commission”) July 21, 2016 meeting, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing to collect certain data for analytics and surveillance purposes from  market-based rate (“MBR”) sellers and entities only trading virtual products and financial transmission rights in markets operated by Regional Transmission Organizations (“RTO”) and Independent System Operators (“ISO”)  (“Virtual/FTR Participants”).  FERC and RTO and ISO market monitors would then rely on this information to administer MBR and enforcement programs, including detecting market manipulation and other anticompetitive activities. Continue reading

Judge Rules on NYPSC February 23 Resetting Order

By Lena Golze Desmond, Esq.

Welcome to Part 1 of “Resetting the NYPSC’s Reset Order”; an examination of the effects of the recent judicial ruling on the New York Public Service Commission’s February 23 Resetting Order, and its potential consequences on the New York retail energy market:

  • Part One will give a ‘barebones’ overview of the ruling vacating the Resetting Order and the Resetting Order itself.
  • Part Two will dig deeper into the Vacating Order and what we’re likely to see in the near future.
  • Part Three will discuss important next steps as well as potential opportunities for the retail energy industry.

Resetting the NYPSC’s Reset Order: Part One

On Friday, July 22nd, a New York Supreme Court judge vacated most of New York Public Service Commission’s (“NYPSC” or “Commission”) contentious February 23 ‘Resetting Order.[1] Continue reading

PSC Establishes Moratorium on ESCO Service to Assistance Program Participants

By: Meghan Boland, Esq.

On July 14, 2016, the New York Public Service Commission approved the Order Regarding the Provision of Service to Low-Income Customers by Energy Service Companies (Case 12-M-0476 et al.) (“the Order”) establishing a moratorium on energy service company (“ESCO”) enrollments and renewals of assistance program participants (“APPs”). Note- the moratorium does not apply to Community Choice Aggregation. Continue reading

New York Solar Goes Virtual: Con Ed, SunPower, and Sunverge Collaborate to Bring Solar to the City

By: Meghan Boland, Esq.

Con Edison, SunPower and Sunverge recently announced a $15 million virtual power plant partner on a pilot program to offer solar power systems with battery storage to more than 300 New York homeowners in Brooklyn and Queens. This Reforming the Energy Vision (REV) project is meant to explore the revenue streams made possible by software-enabled aggregation of energy storage. The aggregation of hundreds of homes with solar power and battery storage will provide the utility with a cost-effective and innovative “virtual power plant,” providing participating homeowners with a backup system in case of an outage while also supplementing the traditional energy delivery model to improve grid resiliency, reliability and sustainability.[1] Although the initial filing was submitted in July, 2015, this announcement marks the green light for the project to launch this summer. Continue reading

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