PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:
Proposed Action:
The Commission is considering a petition seeking rehearing of its August 1, 2016 Order Adopting a Clean Energy Standard filed on August 31, 2016 by Castleton Commodities International LLC and its affiliates Roseton Generating LLC and CCI Rensselaer LLC.
Statutory authority:
Public Service Law, sections 4(1), 5(1)(2) and 66(2); Energy Law, section 6-104(5)(b)
Subject:
Clean Energy Standard.
Purpose:
To promote and maintain renewable and zero-emission electric energy resources.
Substance of proposed rule:
The Public Service Commission is considering a petition filed on August 31, 2016 by Castleton Commodities International LLC and its affiliates Roseton Generating LLC and CCI Rensselaer LLC. (Castleton, et al.) that requests rehearing of the Commission’s August 1, 2016 Order Adopting a Clean Energy Standard (CES Order). In the petition, Castleton, et al. claims the Commission (a) acted beyond the scope of its legislatively delegated authority; (b) acted in an area pre-empted by federal law; (c) imposed an unlawful burden on interstate commerce; and (d) failed to provide reasoned explanations for discriminating among sources of generation with reduced carbon attributes, for abandoning its commitment to competitive forces to manage the wholesale markets, and for how the Commission will administer the mixed reliance on competition and command and control regulation in the wholesale markets. Castleton, et al. argues that adoption of the ZEC program is outside the Commission’s scope of authority as demonstrated by a number of factors. According to Castleton, et al. the ZEC Program is an explicit attempt by the Commission to weigh the competing social concerns of combating global warming against controlling the cost of electricity, but without any legislative guidance on how to balance those competing concerns. Castleton, et al. claims the ZEC Program and adoption of the Social Cost of Carbon is invalid because it is fundamentally focused on environmental concerns, which the Legislature has not delegated to the Commission and that it runs counter to a legislative goal. Castleton, et al. further argues that the novelty and disruptiveness of the ZEC program is further evidence the Commission acted beyond its authority. Castleton, et al. also claims that the Commission inappropriately intruded on an area of legislative debate as evidenced by the upstate nuclear fleet being a recurring topic of public discourse; the Governor’s support for preservation of the upstate facilities and, the Legislature failure to address the issue through specific legislation. Finally, with regards to legislative authority, Castleton, et al. claims that the ZEC price formula inappropriately attempts to balance the social cost of carbon with the social cost of nuclear power generation and that such balancing is outside the Commission expertise. Castleton, et al, also argues that the CES Order incorrectly regulates the wholesale market for electricity which is exclusively within the jurisdiction of the Federal Energy Regulatory Commission (FERC). Castleton, et al. claims, that the ZEC Program directly inserts the Commission into the administration of the wholesale markets by: (a) modifying the prices received by the nuclear plants for wholesale sales; (b) directing LSE's as to what power resources to purchase from, in what quantities, and how much to pay for such power in the wholesale market; and (c) consequently interfering with the normal functioning of the wholesale markets for both capacity and energy. Castleton, et al. also claims the ZEC program is invalid because it burdens interstate commerce. According to Castleton, et al., the Commission ZEC Order inappropriately places a thumb of New York State on the scales of interstate commerce by compelling wholesale purchasers of electricity to buy a fixed amount of their power needs only from four upstate nuclear plants. Castleton, et al., argues that the terms of the ZEC program excludes from participation all out-of-state facilities simply based on their location. Castleton, et al. also characterizes the ZEC program as economic protectionism at its core. Castleton, et al. argues that the Commission also erred by failing to explain key aspects of the ZEC Order. Specifically, Castleton, et al. claims the Commission failed to explain (a) its divergence from existing policies and regulatory structures; (b) what the follow-on implications of that divergence will be; (c) how the Commission will reconcile the new paradigm facing wholesale market participants in New York with existing and, presumably, to-be-continued rules governing that market, and (d) the reasonableness or accuracy of the federal agencies' Social Cost of Carbon metric. The Commission may adopt, reject, or modify, in whole or in part, the relief proposed and may resolve related matters.
Text of proposed rule and any required statements and analyses may be obtained by filing a Document Request Form (F-96) located on our website http://www.dps.ny.gov/f96dir.htm. For questions, contact:
John Pitucci, Public Service Commission, 3 Empire State Plaza, Albany, NY 12223, (518) 486-2655, email: john.pitucci@dps.ny.gov
Data, views or arguments may be submitted to:
Katheen H. Burgess, Secretary, Public Service Commission, 3 Empire State Plaza, Albany, NY 12223, (518) 474-6530, email: kathleen.burgess@dps.ny.gov
Public comment will be received until:
45 days after publication of this notice.
Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement
Statements and analyses are not submitted with this notice because the proposed rule is within the definition contained in section 102(2)(a)(ii) of the State Administrative Procedure Act.
