The New York Public Service Commission is expanding the size of distributed energy resources eligible for “value stack” payments to 5 megawatts, up from 2 MW, a move the PSC said would spur renewable development.
In an initial order, the PSC a year ago directed that payments for eligible distributed resources transition from net metering to the value stack, a methodology that bases payments on the benefits created by the distributed resources.
Under the initial order, solar, wind, hydroelectric, farm-based anaerobic digesters, and fuel cells with a rated capacity of 2 MW or less are eligible for value stack compensation. Also, residential combined heat and power units between 1 kilowatt and 10 kW are eligible.
The value stack is based on a utility’s avoided costs plus other benefits a resource may bring such as demand reduction and environmental values.
The effort is an element of New York’s Reforming the Energy Vision, which aims to revamp the state’s electric sector.
The PSC expects that increasing the size limit on resources able to be paid under the value stack tariff will boost renewable development.
“Unlocking the advantages of economies of scale and other soft cost reducing measures is key to driving deployment of clean generation and other DERs at the scale needed to meet the objectives of the Reforming the Energy Vision initiative … and to create a modern, integrated grid,” the PSC said in its Feb. 22 decision. “This scale of deployment will drive the clean, distributed, transactive, and integrated electric system REV envisions.”
Some developers are planning 2-MW projects next to each other and expanding eligibility to 5 MW may lead to projects being combined, potentially making them more cost-effective, the PSC said.
The PSC expects that community-distributed generation projects will benefit from the increased eligibility size.
The PSC declined to expand the eligibility size of CHP projects, noting that commission staff is studying the issue. The PSC said it may expand the types of technologies that are eligible for value stack payments.
Existing generators between 2 MW and 5 MW can opt-in to the value stack tariff if they meet the eligibility requirements.
The PSC didn’t make any changes to interconnection request requirements, noting that proposed changes are still undergoing public comment. The proposed changes relate to consolidated projects already in the interconnection queue.
The proposal to increase the eligibility cap was supported by various groups, including the Coalition for Community Solar Access, the Alliance for Clean Energy New York, the Natural Resources Defense Fund, Pace Energy and Climate Center, New York Solar Energy Industries Association, Solar Energy Industries Association and Vote Solar.
