S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         8065
                              2015-2016 Regular Sessions
                                 I N  A S S E M B L Y
                                     June 5, 2015
                                      ___________
       Introduced  by M. of A. RUSSELL -- read once and referred to the Commit-
         tee on Energy
       AN ACT to amend  the  public  service  law,  in  relation  to  long-term
         contracts for renewable energy
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. The public service law is amended by adding a  new  section
    2  66-o to read as follows:
    3    S  66-O. LONG-TERM CONTRACTS FOR RENEWABLE ENERGY. 1. DEFINITIONS.  AS
    4  USED IN THIS SECTION THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING  MEAN-
    5  INGS:
    6    (A) "ELIGIBLE RESOURCE" MEANS A SOURCE OF ELECTRICAL GENERATION THAT:
    7    (I)  GENERATES POWER THAT IS WITHIN OR DELIVERED TO THE CONTROL REGION
    8  OF THE NEW YORK INDEPENDENT SYSTEM OPERATOR;
    9    (II) IS A RENEWABLE ENERGY RESOURCE; AND
   10    (III) DOES NOT CURRENTLY HAVE A LONG-TERM CONTRACT WITH THE STATE.
   11    (B) "RENEWABLE ENERGY RESOURCE" SHALL HAVE THE  SAME  MEANING  AS  SET
   12  FORTH IN SUBDIVISION TWELVE OF SECTION 1-103 OF THE ENERGY LAW.
   13    (C) "RENEWABLE ENERGY CREDIT" MEANS A TRADABLE INSTRUMENT THAT REPRES-
   14  ENTS  AN  AMOUNT  OF  ELECTRICITY  GENERATED  FROM ELIGIBLE RESOURCES OR
   15  RENEWABLE ENERGY RESOURCES.
   16    (D) "LONG-TERM CONTRACT" MEANS A CONTRACT WITH  AN  ELECTRIC  AND  GAS
   17  CORPORATION FOR A PERIOD OF UP TO TWENTY YEARS.
   18    2.  COMMISSION  AUTHORITY.  THE COMMISSION MAY DIRECT ELECTRIC AND GAS
   19  CORPORATIONS TO ENTER INTO LONG-TERM CONTRACTS FOR ENERGY, CAPACITY  AND
   20  RENEWABLE  ENERGY  CREDITS  WITH  ELIGIBLE  RESOURCES. AT A MINIMUM, THE
   21  COMMISSION SHALL PROCURE TWO PERCENT OF THE STATE'S ANNUAL RETAIL  ELEC-
   22  TRICITY LOAD BY TWO THOUSAND SIXTEEN, FOUR PERCENT BY TWO THOUSAND EIGH-
   23  TEEN, AND SIX PERCENT BY TWO THOUSAND TWENTY.
   24    3.  PRIORITY OF LONG-TERM CONTRACTS. IN SELECTING ENERGY, CAPACITY AND
   25  RENEWABLE ENERGY CREDITS FOR CONTRACTING PURSUANT TO SUBDIVISION TWO  OF
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD11416-01-5
       A. 8065                             2
    1  THIS  SECTION,  THE COMMISSION SHALL PRIORITIZE LONG-TERM CONTRACTS WITH
    2  ELIGIBLE RESOURCES THAT THE COMMISSION DETERMINES WILL  MAXIMIZE  FINAN-
    3  CIAL BENEFITS TO ELECTRICITY CUSTOMERS, PROVIDE A HEDGE AGAINST VOLATILE
    4  FOSSIL FUEL PRICES, AND CREATE OR MAINTAIN PROPERTY TAXES AND EMPLOYMENT
    5  IN THE STATE OF NEW YORK.
    6    4. CONTRACT TERM. A CONTRACT ENTERED INTO PURSUANT TO THIS SECTION MAY
    7  NOT BE FOR A TERM OF MORE THAN TWENTY YEARS, UNLESS THE COMMISSION FINDS
    8  A  CONTRACT  FOR A LONGER TERM WOULD PROVIDE SIGNIFICANTLY GREATER RATE-
    9  PAYER BENEFITS.
   10    5. COMPETITIVE SOLICITATION  PROCESS  AND  CONTRACT  NEGOTIATION.  THE
   11  COMMISSION  SHALL  ESTABLISH A SCHEDULE FOR ANNUAL COMPETITIVE SOLICITA-
   12  TIONS FOR LONG-TERM CONTRACTS PURSUANT TO THIS  SECTION.  THIS  SCHEDULE
   13  MUST  INCLUDE A TIMELINE FOR NEGOTIATION, COMMISSION DECISION MAKING AND
   14  CONTRACT CLOSING.
   15    6. DISPOSITION OF RESOURCES. AN ELECTRIC  AND  GAS  CORPORATION  SHALL
   16  SELL  ENERGY,  CAPACITY  OR  OTHER  PRODUCTS  PURCHASED PURSUANT TO THIS
   17  SECTION OR TAKE OTHER ACTION RELATIVE TO SUCH ENERGY, CAPACITY OR  OTHER
   18  PRODUCTS AS DIRECTED BY THE COMMISSION.
   19    7.  COST  RECOVERY.  THE  COMMISSION  SHALL  ENSURE THAT ALL COSTS AND
   20  DIRECT FINANCIAL BENEFITS ASSOCIATED WITH CONTRACTS ENTERED  INTO  UNDER
   21  THIS  SECTION ARE ALLOCATED TO RATEPAYERS. A PRICE DIFFERENTIAL EXISTING
   22  AT ANY TIME DURING THE TERM OF THE CONTRACT BETWEEN THE  CONTRACT  PRICE
   23  AND THE PREVAILING MARKET PRICE AT WHICH THE ENERGY, CAPACITY AND RENEW-
   24  ABLE  ENERGY  CREDITS  ARE  SOLD  OR  ANY  GAINS  OR LOSSES DERIVED FROM
   25  CONTRACTS FOR DIFFERENCES MUST BE REFLECTED IN THE  AMOUNTS  CHARGED  TO
   26  RATEPAYERS AND MAY NOT BE CONSIDERED IMPRUDENT.
   27    8.  CONTRACT  PAYMENTS.  LONG-TERM  CONTRACTS ENTERED INTO PURSUANT TO
   28  THIS SECTION  MUST  PROVIDE  THAT  PAYMENTS  WILL  BE  MADE  ONLY  AFTER
   29  CONTRACTED  AMOUNTS  OF  ENERGY,  CAPACITY  OR  OTHER PRODUCTS HAVE BEEN
   30  PROVIDED.
   31    9. CUSTOMER BENEFITS. THE COMMISSIONER MAY  DIRECT  ELECTRIC  AND  GAS
   32  CORPORATIONS  TO  ENTER INTO CONTRACTS UNDER THIS SECTION ONLY AS AGENTS
   33  FOR THEIR CUSTOMERS. THE COMMISSION SHALL ADOPT RULES TO ENSURE THAT  TO
   34  THE  EXTENT  THE  BENEFITS  TO  RATEPAYERS  OF  A LONG-TERM CONTRACT ARE
   35  PROJECTED TO OCCUR IN THE LATER YEARS OF  THE  CONTRACT  TERM,  ADEQUATE
   36  FINANCIAL  SECURITY IS IN PLACE SO THAT IT IS REASONABLY LIKELY RATEPAY-
   37  ERS WILL OBTAIN THE PROJECTED BENEFITS OF THE LONG-TERM CONTRACT.
   38    10. RULES AND REGULATIONS. THE COMMISSION SHALL ADOPT RULES AND  REGU-
   39  LATIONS  TO  IMPLEMENT  THIS SECTION. IN ADOPTING RULES AND REGULATIONS,
   40  THE COMMISSION SHALL CONSIDER THE FINANCIAL IMPLICATIONS OF THIS SECTION
   41  ON ELECTRIC AND GAS CORPORATIONS.
   42    S 2. This act shall take effect immediately.