As noted in the DERs Rulemaking Comments of various entities, the issue of double compensation was a considerable concern for some, while the issue generally dismissed by the DER industry generally. For example, the New York Transmission Owners (NYTOs) explained to FERC that they support the participation of DERs in wholesale markets, but suggested that “a review of each retail-level program by the relevant RTO/ISO is required so that the compensation at the retail and wholesale level is for distinct services and not the same service.” Speaking specifically to Value of DER (“VDER”) tariffs, the NYTOs suggested that rules should allow a DER to receive wholesale compensation from NYISO, but that the resource should not receive overlapping compensation as part of the Value Stack under the VDER tariff. In contrast, Sunrun stated: “the Commission should rebuttably presume that state programs aim to compensate a value that is different than what the DER provides to the wholesale market. A rebuttable presumption along these lines is justified because states have no incentive to create retail programs that waste their ratepayers’ money by duplicating services procured in wholesale markets.” The complexity surrounding determining whether dual compensation is occurring recently was highlighted when a group of large industrial, commercial, and institutional energy consumers and an association of independent power producers recently petitioned the New York State Public Service Commission for expedited prospective relief from double payments that may occur if carbon pricing is implemented in the NYISO.
The petition relates to the NYISO’s recent Carbon Pricing Straw Proposal (Straw Proposal) to incorporate the cost of carbon dioxide emissions into the NYISO-administered wholesale markets. Because existing programs compensate certain resources for their low-carbon attributes, the Petitioners are concerned that if implemented, carbon pricing (i.e., the Straw Proposal) would result in double-payments for the same attribute to resources that already receive compensation under existing programs. More recently, Nucor Steel Auburn, Inc. submitted a statement in support of the petition.