January 20, 2020
Sponsored by Senator Kevin S. Parker of the 21st State Senate district, Bill S5627 will revolutionize community solar. This will enable VDER credits to be “wheeled” from one electric distribution company’s territory to another. If passed, EDCs will be required to file a model tariff. As of September 13th, 2019, the bill must pass assembly and be signed by the governor. After this is completed, the utilities and PSC will approve the necessary tariffs to enable this concept.
Such policies do not have fiscal implications and open unique opportunities. For example:
YSG’s “The Pitkin Project”, a Community Solar Facility located in O&R Zone G, can transfer 60% of VDER credits to EL-1 rate classes within ConEdison Zone J. The 40% of VDER credits will be retailed to LMI subscribers within O&R in Zone G. ConEdison Zone J is a liquid market for retailing VDER credits due to the quantity of ratepayers and high energy costs. Providing liquidity to a project will support shorter and more flexible subscription agreements for the subscribers in ConEdison Zone J and in O&R Zone G. Assuring project sponsors’ cash-flow from a percentage of the project is critical when underwriting a community solar facility. This mechanism will enhance the credibility of the subscribers (off-takers) with an emphasis on the subscription aggregators’ experience marketing power/VDER credits.
New York’s Joint Utilities have a strong voice and this process will increase administration work and potential billing issues for our investor-owned utilities. Enabling a proper solicitation of a software platform that is able to transfer credits from one EDC to another to leverage blockchain technology may solve a portion of the concern.
The electricity industry is a regulated sector and moving quickly is not in our DNA. While sponsors and aggregators are excited for the recent goals and policies in New York, we, as developers, must be cautious as the market develops.
You can read Bill S5627 here:
https://legislation.nysenate.gov/pdf/bills/2019/S5627
By David Magid
YSG Solar CEO