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Power & Pipes

FERC, CFTC, and State Energy Law Developments

Consolidated Edison Company of New York, Inc. (Con Edison) and Orange and Rockland Utilities, Inc. (O&R) issued a draft joint Request for Proposals (RFP) on May 31 to competitively procure scheduling and dispatch rights from new energy storage projects. Through this initial solicitation, Con Edison and O&R are targeting at least 300 megawatts (MW) and 10 MW, respectively, of new energy storage facilities to meet the in-service deadline of December 31, 2022, set by the New York Public Service Commission (NYPSC) in its December 2018 Order (Storage Order) establishing New York’s three gigawatt (GW) energy storage deployment goal.

Both utilities will accept bids only for new storage projects sized over five MW and connected to the transmission or distribution system that can directly participate in New York Independent System Operator (NYISO) markets and provide distribution benefits, if applicable. These front-of-meter systems must be able to discharge for at least four hours 100 to 350 times per year, have at least 85% roundtrip efficiency, and maintain 98% availability for dispatch each contract year.

Con Edison and O&R will rank proposals based primarily on price compared to NYISO market revenue streams, and quantifiable distribution and environmental benefits (e.g., reduction in fossil fuel peaking generation run hours). The RFP will give preference to projects in high-value geographic areas in the bid evaluation process. These high-value locations include: (1) Con Edison’s Greenwood transmission load area in Brooklyn and Staten Island; (2) Con Edison’s Astoria transmission load area in Queens; (3) the East 75th Street Area Station in Manhattan; and (4) two sites in the northern portion of O&R’s service territory with high penetration of solar photovoltaic resources. The RFP selection process also includes a range of other qualitative factors, including overall project viability, developer experience, system design, and safety.

As we reported in March, the New York State Energy Research and Development Authority (NYSERDA) is offering market acceleration bridge incentives (MABI) totaling $280 million to spur the first GW of New York’s 2030 energy storage deployment goal. Those funds went live during Earth Week and the joint Con Edison/O&R solicitation is the first opportunity to deploy the $150 million of MABI funding earmarked for bulk storage projects. Under the draft RFP, Con Edison and O&R will pay an upfront lump sum, co-funded by NYSERDA’s MABI program, plus a share of annual payments of wholesale market revenues (net of costs) in exchange for up to seven years of scheduling and dispatch rights for the entire output of the storage system.

Comments on the Con Edison/O&R draft RFP are due on June 14 and a final RFP is expected in July when New York’s remaining three investor-owned utilities will issue their draft RFPs. Interested bidders will then have until August 1 to submit their qualifications as a prerequisite to the submission of formal bids by October 1. Please check back for updates on New York’s procurements to promote its commitment to energy storage on our tracker.