John Saintcross, Program Manager Energy and Environmental Markets NYSERDA

1. New York State Renewable Portfolio Standard John Saintcross, Program Manager Energy and Environmental Markets NYSERDA

2. Renewable Portfolio Standard Goal: 30% of the power consumed in the state to come from renewable sources by 2015 - from a 2003 baseline of ~ 19.5% Nearly $ 3billion total funding authorization - $ 868m committed – ($ 740m grid-scale/$ 128m retail sited) - $ 532 million retail sited ; $ 2.47 billion grid - scale NY RPS adopted as tool to: - Stimulate economic development - Improve the environment - Pursue energy independence Spier Falls Hydro 2

3. Program Funding Allocation

4. Targets • Total renewable target: 45.7 million MWh by 2015 • Baseline: 31.5 million MWh count toward target • PSC expects balance of target to be met through: • - state agency purchases (0.3 million MWh) • - voluntary competitive green power markets (1.6 million MWh) • - voluntary LIPA supported renewable energy (1.9 million MWh) • - new grid-scale and behind-the-meter resources • (administered by NYSERDA) • Main Tier (grid-scale): (9.8 million MWh) • Customer-Sited Tier: (0.6 million MWh)

5. Key Program Design Features • Rules set forth by PSC; not legislated • Centrally managed by NYSERDA (public authority) • - utilities have exited generation business • - utilities discouraged from entering long-term contracts • - ratepayers pay equally for program (administratively efficient) • Funding based on supply/demand/costing analyses • - utilities collect funds/by contract transfer to NYSERDA • NYSERDA contracts long term on basis of collections from utilities and cash flow timing • Ratepayer collections and resource costs effectively govern scale/pace of compliance • targets are non-binding

6. Key Program Design Features • PSC established eligible fuel /resource types • Projects can seek determination of eligibility • - Request advisory opinion of NYSERDA • - NYSERDA evaluates/prepares recommendation to DPS • DPS responds directly to project within 30 days • - Directly petition PSC • Projects must be provisionally certified to qualify to bid • Contract payments subject to Operational Certification • NYSERDA evaluates compliance/prepares recommendation to PSC • Baseline (existing)resources can petition for hardship relief • PSC determines eligibility for and form of relief/NYSERDA contracts accordingly

7. Projects compete for contracts via RFP in pay-as-bid auction • NYSERDA purchases renewable attributes (aka RECs) • - energy delivered to NYISO/municipality/on-site • - settled in New York for end use consumption • Payments made on the basis of energy delivered • Fixed-price REC contracts of up to 10 years employed • Price weighted at 70 % /economic benefits to NYS at 30% RPS Implementation: Grid Scale Resources • RFP funding cap set for each RFP • - maximum price trigger is applied • Achievement is function of funding/bid prices Clinton Wind Farm

8. RPS Implementation: Grid Scale Resources • Contract security provided for commercial operation date • Projects can pay additional security to defer on-line date • Alternate bids per facility encouraged • Bid quantity per facility limited to 95% of actual output • REC’s can be diverted to voluntary market in NYS • Payments subject to realization of economic benefits (yrs 4-10) • Implications of non-performance(in service date, quantity and expected economic benefits: • - forfeiture of contract security • - reduced quantity obligation for NYSERDA • - reduced REC prices • - Default /possible termination Lyonsdale Biomass

9. Main Tier Progress (January 2011) Total new capacity - about 1,546 MW New Facilities involved- 39 projects/38 in New York Resource type - 21 hydro/4 biomass/14 wind Wind Capacity (installed) - 1,348 MW / ranked 8th in US RECs under contract annually - approx. 3.9 million Progress against target of 9.8 million MWh 40% Steel Winds Wind Farm, Buffalo, NY

10. RPS Implementation CST Resources • Procured through technology-specific solicitations • Governed by CST Operating Plan and approved PSC funding • Mix of capacity and performance based incentives • Rights to REC acquired for 5 year term • Installers subject to certification process • Quality assurance/control provided by 3 rd party contractors • - Technical reviews/commissioning • - Inspection of installs (function of experience) • Remote metering /data archiving • PSC requires confidence: 90 % +/-10 NYS DEC Building

11. RPS Implementation: CST Resources • Unspent funds by technology must be re-allocated annually • NYSERDA prepares filing for PSC consideration 30 days from close of previous year • - recommendation on allocation by technology • Programs can continue using current year budget funding - subject to decision/adjustment by PSC Alfred University Turbine

12. Customer On-Site Resource Development 11

13. Accounting for Achievement • NYS does not recognize REC (as a tradable, standalone commodity) • NYSERDA “purchases” RPS Attributes as proxy for REC • seller transfers all rights /claims to environmental credits to NYSERDA • One RPS-Attribute created upon generation of one MWH • NYS disclosure system used to account for compliance • energy sold in ISO bundled with RPS-Attributes • purchased RPS-Attributes are allocated on basis of utility funding of RPS • utility disclosure labels reflect increasing renewable energy fraction (CST counted separately-on energy production basis only) • disclosure labels signify RPS-Attributes “retirement” • NYSERDA contract provides for the assignment of REC should REC-based system be recognized eventually in NYS • PSC counts existing/baseline, agency purchases and voluntary market sales

14. Thank You John Saintcross js1@nyserda.org (518) 862-1090; ext 3384 Maple Ridge Wind Farm