Energy Committee Update
August 24, 2017

Staff Contact: Darren Suarez

RGGI States Announce Proposed Program Changes

The RGGI states proposed a regional cap trajectory that will provide an additional 30% cap reduction by the year 2030, relative to 2020 levels. The proposed regional program changes include the addition of an Emissions Containment Reserve (ECR) wherein states can withhold allowances from auction if emission reduction costs are lower than projected. At this time, Maine and New Hampshire do not intend to implement an ECR.

Details as reported by RGGI:

Public Comments
RGGI states will seek stakeholder comment on the draft program elements in a public meeting to be held on September 25th in the Maryland Public Service Commission Hearing Room. Materials, including a stakeholder meeting notice and a supplementary table of year-by-year regional numbers, are posted at http://rggi.org/.

The Business Council will prepare public comments prior to the meeting reflecting our memberships input.

NYISO Issues Brattle Group Report on Pricing Carbon into the Wholesale Energy Market

The New York Independent System Operator (NYISO) issued a study on August 11th authored by the Brattle Group. The study outlines market design options that would integrate the social cost of carbon into wholesale power markets, and explores how carbon pricing can align market structures with state policies. The NYISO commissioned The Brattle Group in August 2016 to explore whether and how New York State environmental policies may be pursued within the existing wholesale market structure. The report considers the input of stakeholders but the product solely reflects the opinions of its authors. This report is intended to provide a first step in a discussion on how to harmonize state policy and wholesale markets in New York.

As the first step, the NYISO and DPS will jointly convene an one‐day conference on September 6, 2017 where all interested stakeholders will have the opportunity to hear from, and present questions to, the authors of the Brattle study and staff from DPS and the NYISO. Details about the location and agenda for this conference will be forthcoming. Stakeholders are invited to contribute to the development of the agenda by submitting questions concerning the attached report to memberrelations@nyiso.com by September 1, 2017

The Business Council will attend the September 6th meeting. Subsequent to the meeting, the Energy Committee will conduct a web based discussion to review the report and develop a position.

CO2 Performance Standards for Major Electric Generating Facilities

The Department of Environmental Conservation (DEC) is scheduling an outreach meeting to discuss potential revisions to 6 NYCRR Part 251, CO2 Performance Standards for Major Electric Generating Facilities. The Department is considering proposing revisions to address Governor Cuomo’s call for electric generating units burning coal to repower to a cleaner fuel or close no later than 2020. The meeting is scheduled for August 28, 2017 from 10:00 a.m. - 12:00 p.m. in Public Assembly Room 129 A&B at DEC’s Central Office located at 625 Broadway, Albany, NY 12233-3255.

DOE Releases Grid Study

The Department of Energy released its assessment of the reliability and resilience of the electric grid and an overview of the evolution of electricity markets. The assessment is the result of an April memo, by Secretary Rick Perry ordering the DOE to review the impact of federal and state policies on wholesale markets, including whether wholesale energy and capacity markets adequately compensate baseload resources for providing on-site fuel supply and strengthening grid resiliency. The report concluded low natural gas prices, flat demand and a wide range of policymaking — such as federal and state environmental regulations and renewable energy incentives — have been responsible for coal plant retirements.

The report contained the following policy recommendations (abbreviated):