The Commission released a "Staff Responsive Proposal for Preserving Zero-Emissions Attributes" in the Clean Energy Standard proceeding. "Staff is proposing to subsidize zero-emissions attributes from Zero Carbon Electric Generating Facilities when there is a public necessity to encourage their preservation. Payments for zero-emissions attributes would be based upon the U.S. Interagency Working Group's (USIWG) projected social cost of carbon (SCC)." Staff estimates that implementation of this methodology would cost $965 million during the first two years of the program, compared to Staff's projected $5 billion benefits to be realized over the same period. Staff's proposal is intended to be in effect for a twelve year period. The Commission will make a determination of "public necessity" on a plant-specific basis. Staff projects that a "public necessity for subsidies" will exist for the Fitzpatrick, Ginna and Nine Mile facilities but not at Indian Point.

Zero Emissions Credits (ZEC) contracts would be administered in six two-year tranches, commencing on April 1, 2017, and running through March 31, 2029. Nuclear facilities would contract with NYSERDA to purchase ZECs. The ZEC price would be determined by the Commission. For the first two-year tranche of April 1, 2017, to March 31, 2019, Staff's formula yields a ZEC price of $17.48 per MWh.

Each Load Serving Entity (LSE) would be required to purchase, "an amount of ZECs per year of the total amount of ZECs purchased by NYSERDA in proportion to the electric energy load served by the Load Serving Entity in relation to the total electric energy load served by all load serving entities in the New York Control Area. The ZECs obligation is separate from any obligation on Load Serving Entities to encourage generation utilizing renewable resources." Each LSE would enter into a contractual agreement with NYSERDA to purchase ZECs during a program year based on load forecasts and subject to a balancing reconciliation. NYSERDA will charge the ZEC price plus an adder for incremental administrative costs and fees.

Staff proposes that program costs be recovered from ratepayers through commodity charges on customer bills. Utilities would charge their commodity customers on a volumetric basis. ZECS would only be tradeable in the balancing process between NYSERDA and LSEs. LSEs and self-supply customers may propose to the Commission meet ZEC obligations through combined energy and/or capacity and ZEC contracts with nuclear facilities if the contracts do not "unfairly shift ZECs costs onto other ratepayers."

Comments are due July 22, 2016. The full text of the Staff Proposal on Valuation of Zero Emissions Credits is available on the NEM Website.

A Secretarial Letter was issued to electric utilities and electric generation suppliers (EGSs) with Alternative Energy Portfolio Standard obligations to inform them that, "there will be an approximate seven percent increase in the otherwise anticipated annual AEPS Tier I obligations for the 2016 compliance year." The Commission became aware that there had been an error in the quarterly adjustment calculations for the past six years. Correction of error for 2016 results in the seven percent increase in Tier I obligations. Electric utilities and EGSs will soon be receiving notification of their total compliance obligations from the AEPS Program Administrator. The full text of the Secretarial Letter is available from the NEM Website.