This post is by John Rogers who is a senior energy analyst with the Union of Concerned Scientists and a director on the RENEW Northeast board.
In comments filed with the New York Public Service Commission, RENEW Northeast urged New York to switch from the current NYSERDA budget-based procurement model of renewable energy certificates (RECs) to a target-based system solely of electric utility contracting for renewable energy as found in several of the New England states. A significant benefit of long-term contracts for consumers comes from lowering the development cost of renewable energy by giving developers and their investors the confidence to commit their capital. Contracting for energy at a fixed-price over a long term will provide consumers with the full benefits of renewable energy whose “free fuel” provides a hedge against electricity price swings caused by the volatility in natural gas and other fossil fuel markets.
Following the New York State Energy Research and Development Authority’s (NYSERDA) July 1, 2014, supply-side resources Stakeholder Roundtable discussion, RENEW recommended the state move from a model of central procurement for renewable energy certificates (“RECs”) to the distribution utilities becoming counterparties to renewable generators for long term contracts consisting of energy and RECs both at a fixed price. RENEW offered several examples of how this approach in New England lowered project development costs and yielded the lowest prices for consumers. RENEW also urged New York to work in concert with New England on renewable energy and transmission development, such as is now being conducted between the governors of New England, to further New York’s economic development and New England’s renewable energy goals.