On July 7, 2022, the New York State Energy Research and Development Authority (NYSERDA) issued two detailed Requests for Information (RFIs) that outline sweeping updates to its procurement programs and selling renewable energy certificates (RECs) on a large scale. The changes reflect both NYSERDA’s efforts to keep up with changes in applicable legislation and rapidly evolving market rules and its ongoing efforts to increase the maturity of proposed projects. Turnaround time for responses to RFIs is fast – NYSERDA expects responses from stakeholders by July 28 at 3:00 p.m. Program design changes will come in the form of new requirements for the next RFI solicitation. Scale Renewable Energy Tier 1, RESRFP22-1 and REC (OREC) tenders for offshore wind. In the RFIs, NYSERDA describes these updates in detail and seeks feedback regarding their potential effects on bid pricing, economic development, the domestic component supply chain, and a range of related matters.

Many of the planned updates to NYSERDA’s REC purchases stem from recent or upcoming changes in New York law, including the incorporation of Buy-American provisions, labor peace agreements, and enhanced standards for boundaries of wetlands and water bodies. Other planned changes result from the Federal Energy Regulatory Commission’s recent acceptance of proposed changes to the New York Independent System Operator Tariff (specifically, updates to capacity accreditation rules, for which NYSERDA issued a stand-alone RFI); federal actions, such as President Biden’s invocation of the Defense Production Act to spur a domestic solar module and module component industry; and planned regulatory actions, such as final recommendations from the Farmland Protection Task Force, continued coordination of state transmission planning efforts, final criteria from the Department of Environmental Conservation of New York State to define disadvantaged communities and the Climate Action Council framework plan.

The RFI says the Tier 1 tender could be released in July or August 2022. Stage 1 and Stage 2 proposals will likely be due in 60-day intervals after that, with bids due to be evaluated during the first quarter of next year and the awards announced. in spring. Although some of the considerations outlined in the RFIs may not be reflected in Solicitation RESRFP22-1, and updates to the Capacity Accreditation Rules will also be incorporated into the next OREC RFP, the RFIs highlight many topics that bidders should take into account in their bid responses.

Of the myriad issues raised in NYSERDA’s RFIs, we highlight a few of particular importance here.

• Inflation adjustment to bid proposals – NYSERDA is considering giving winners the option to adjust their bid for inflation. NYSERDA questions whether the proposed approach would reduce costs to taxpayers, whether there are other approaches NYSERDA should consider to address the uncertainty of inflation for the benefit of taxpayers, and whether the proposed formula for an adjusted REC price appropriately accounts for value inputs.




• Increased Minimum Threshold Requirements – Since the Renewable Energy Standard was first solicited, NYSERDA has steadily increased the minimum threshold requirements to be eligible for evaluation under the second stage (submission proposal). NYSERDA is again considering increasing several minimum threshold requirements related to interconnection, permitting, energy deliverability, resource assessment/energy production estimation and agricultural land, and research information about these considerations.




• Labor provisions – NYSERDA notes that proponents will be subject to the requirements of applicable New York State Labor Law 224-d and Civil Service Law § 66-r of the Labor Peace Agreement, and asks what other details or clarifications stakeholders need to better understand these requirements.




• Capacity Accreditation – NYSERDA intends to modify its Index REC settlement formula to include a new capacity accreditation factor to implement changes recently approved by NYISO in this regard. NYSERDA has issued a second Capacity Accreditation Mechanism-specific RFI for future agreements that use the Index REC structure. Such changes appear to ensure that the structure of the REC index will take into account any loss of revenue that may have occurred due to changes to these rules and, in the longer term, may have significant impacts on the proposed resource mix. possibly foreshadowing state support updates. for new energy storage technologies.




• Categories of additional economic benefits – NYSERDA is seeking answers regarding the review of cost categorizations, distinctions between electrical energy storage and the proposed inclusion of new storage technologies, and additional economic benefit commitments to disadvantaged communities.




• S. Iron and Steel (Buy-American) – NYSERDA has issued a preliminary determination that the Buy-American requirements for iron and steel would not be in the public interest as applied to future tenders. However, NYSERDA is proposing to establish a minimum dollar requirement for U.S. iron and steel in the construction of renewable energy projects awarded contracts under RESRFP22-1. NYSERDA is seeking comment on its consultant’s study of Buy American requirements and the extent to which these requirements may increase bid prices.




• Project viability and operational flexibility and assessment of maximum coincidence – NYSERDA is proposing to modify the assessment sub-categories for which proponents may receive up to 20 non-tariff points, including adding a new sub-category related to expected impacts on agricultural land and mineral soil groups 1- 4. NYSERDA proposes to rate more favorably tender facility proposals that have a more feasible path to obtaining necessary permits; that complement the existing portfolio of projects in operation/development; and which include co-located or separately located energy storage facilities. In addition to seeking comment on these considerations, NYSERDA asks if there are any other related factors that NYSERDA should consider.




• Committed local transmission upgrade bid proposals – NYSERDA is considering allowing proponents to submit alternative bid proposals that include locally elective electrical infrastructure upgrades that would allow the facility to supply more of its generated electricity. Offerors would be required to commit to optional upgrades as part of the offer proposal, which would be codified in any resulting award agreement.




• Margin data – NYSERDA intends to release data supplementing the revised utility clearance calculation filings to guide proponents in evaluating the viability of their proposed tender facilities. NYSERDA invites comments on how proponents can use this data, what other data would be useful in developing bid proposals, and other considerations relevant to facilities proposed to be located in areas where margin is insufficient. In a similar vein, NYSERDA is considering requiring power deliverability studies for facilities that intend to interconnect in an area indicated by the utilities’ February 1, 2022 margin data filing. public to have a zero or negative margin.




• Agricultural Mitigation Payments – NYSERDA is considering allowing a partial or full deferral of a proponent’s agricultural mitigation payment for up to three years after the proponent facility reaches commercial operation if the proponent implements co-use measures agricultural. NYSERDA plans to waive the mitigation payment upon receipt of a final report detailing the proponent’s efforts to implement the proposed co-use measures.




• Review of U.S. Commerce Department’s Auxin Antidumping/Countervailing Duty Investigation – NYSERDA is seeking answers regarding how stakeholders have conducted risk assessments of strategies for purchasing equipment and entering into module supply agreements. NYSERDA is also keen to understand how Biden’s presidential decision to provide limited ability to source modules and cells from Cambodia, Malaysia, Thailand and Vietnam for 24 months provides relief, if any, to potential proposers.




• Defense Production Act (DPA) – NYSERDA looks at how the Defense Production Act offers potential relief for NYS developers, how Biden’s invocation of the DPA may boost national markets, and how the NYSERDA can encourage the manufacture of domestic solar equipment in New York.

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