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NYISO Carbon Charge Climate Action Council Meeting
Draft Scope Public Hearings
April 5, 2022
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4:00PM
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Bronx
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Bronx Community College Roscoe Brown Student Center Hall of Fame Playhouse 2155 University Ave Bronx, NY 10453
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April 6, 2022
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4:00PM
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Brookhaven
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Brookhaven Town Hall 1 Independence Hill Farmingville, NY 11738
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April 12, 2022
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4:00PM
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Binghamton
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Binghamton University Symposium Hall 85 Murray Hill Rd Vestal, NY 13850
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April 14, 2022
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4:00PM
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Albany
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Empire State Plaza, Meeting Room 6 Albany, NY 12242
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April 26, 2022
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4:00PM
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Syracuse
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SUNY College of Environmental Science and Forestry Gateway Center 1 Forestry Drive Syracuse, NY 13210
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April 27, 2022
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3:30PM
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Buffalo
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Buffalo & Erie County Public Library Mason O. Damon Auditorium 1 Lafayette Square Buffalo, NY 14203
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May 3, 2022
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4:00PM
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Brooklyn
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New York City College of Technology The Theater at City Tech 285 Jay Street Brooklyn, NY 11201
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May 7, 2022
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10:00 AM
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VIRTUAL
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https://nyserdany.webex.com/nyserdany/onstage/g.php?MTID=e3f037513c7ab055c46f1253fb908265e
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May 10, 2022
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4:00PM
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Tupper Lake
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The Wild Center 45 Museum Drive Tupper Lake, NY 12986
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May 11, 2022
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4:00PM
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VIRTUAL
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https://nyserdany.webex.com/nyserdany/onstage/g.php?MTID=eecfcf639bf8b5c07f1740e976f494fba
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UPDATE on NYISO J vs PJM PSEG as of 3/31/2022
TRADE DATE
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HUB
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PRODUCT
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STRIP
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SETTLEMENT PRICE
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PERCENTAGE DIFFERENCE FROM
DEC 22
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3/31/22
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NYISO J Off-Peak
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Off-Peak Futures (50 MW)
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Dec-22
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102.8000
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100%
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3/31/22
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NYISO J Off-Peak
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Off-Peak Futures (50 MW)
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Dec-23
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78.0000
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76%
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3/31/22
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NYISO J Off-Peak
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Off-Peak Futures (50 MW)
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Dec-24
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69.0500
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67%
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3/31/22
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NYISO J Off-Peak
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Off-Peak Futures (50 MW)
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Dec-25
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52.7000
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51%
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3/31/22
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NYISO J Off-Peak
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Off-Peak Futures (50 MW)
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Dec-26
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65.1500
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63%
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3/31/22
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NYISO J Off-Peak
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Off-Peak Futures (50 MW)
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Dec-27
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63.7500
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62%
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3/31/22
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NYISO J Off-Peak
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Off-Peak Futures (50 MW)
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Dec-28
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57.7500
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56%
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3/31/22
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NYISO J
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Peak Futures (1 MW)
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Dec-22
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122.2000
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100%
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3/31/22
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NYISO J
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Peak Futures (1 MW)
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Dec-23
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98.8500
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81%
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3/31/22
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NYISO J
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Peak Futures (1 MW)
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Dec-24
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79.5000
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65%
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3/31/22
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NYISO J
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Peak Futures (1 MW)
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Dec-25
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75.0500
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61%
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3/31/22
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NYISO J
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Peak Futures (1 MW)
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Dec-26
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77.9500
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64%
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3/31/22
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NYISO J
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Peak Futures (1 MW)
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Dec-27
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78.8500
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65%
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3/31/22
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NYISO J
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Peak Futures (1 MW)
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Dec-28
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74.8000
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61%
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3/31/22
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PJM PSEG Zone DA
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Peak Futures (1 MW)
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Dec-22
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73.3000
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100%
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3/31/22
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PJM PSEG Zone DA
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Peak Futures (1 MW)
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Dec-23
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54.9000
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75%
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3/31/22
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PJM PSEG Zone DA
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Peak Futures (1 MW)
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Dec-24
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46.5500
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64%
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3/31/22
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PJM PSEG Zone DA
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Peak Futures (1 MW)
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Dec-25
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48.2000
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66%
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3/31/22
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PJM PSEG Zone DA
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Peak Futures (1 MW)
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Dec-26
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48.8500
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67%
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3/31/22
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PJM PSEG Zone DA
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Peak Futures (1 MW)
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Dec-27
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49.9000
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68%
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3/31/22
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PJM PSEG Zone DA
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Peak Futures (1 MW)
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Dec-28
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50.0000
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68%
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3/31/22
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PJM PSEG Zone DA
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Peak Futures (1 MW)
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Dec-29
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50.6500
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69%
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3/31/22
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PJM PSEG Zone DA Off-Peak
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Off-Peak Futures (1 MW)
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Dec-22
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62.0000
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100%
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3/31/22
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PJM PSEG Zone DA Off-Peak
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Off-Peak Futures (1 MW)
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Dec-23
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42.8500
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69%
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3/31/22
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PJM PSEG Zone DA Off-Peak
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Off-Peak Futures (1 MW)
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Dec-24
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38.6000
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62%
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3/31/22
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PJM PSEG Zone DA Off-Peak
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Off-Peak Futures (1 MW)
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Dec-25
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37.8000
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61%
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3/31/22
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PJM PSEG Zone DA Off-Peak
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Off-Peak Futures (1 MW)
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Dec-26
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40.0000
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65%
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3/31/22
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PJM PSEG Zone DA Off-Peak
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Off-Peak Futures (1 MW)
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Dec-27
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40.5500
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65%
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3/31/22
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PJM PSEG Zone DA Off-Peak
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Off-Peak Futures (1 MW)
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Dec-28
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41.1000
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66%
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3/31/22
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PJM PSEG Zone DA Off-Peak
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Off-Peak Futures (1 MW)
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Dec-29
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41.7000
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67%
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Analysis on Power Prices
NYISO J Off-Peak: The curve from Dec ’22 to Dec ’25 is backwardated/flat. The perceived market confidence for a 2024 start date has declined significantly in the last 9 months. AEGIS has not seen a formal change of course from New York other than a continued slow pace during the process. The market is currently not pricing in carbon fee as it did back in 2019/2020.
PJM PSEG: Power Prices for Dec-24 to Dec-27 is lower than Dec-22 and Dec 23. The market is not appeared to be pricing in any additional carbon (besides RGGI) as the CPSTF is sunsetting.
NY/NJ News
- The New York fuel standard lurches up a difficult path. Renewed efforts to enact a New York Clean Fuel Standard are being met with skepticism from environmentalists, as well as a state climate plan that has not endorsed the program. The state Senate rekindled hopes for an Atlantic coast entry point for low-carbon fuel standard (LCFS) markets that have already blanketed the west coast. A New York LCFS would introduce the program to the nation's fourth-largest gasoline-consuming state and serve as an anchor for interested state governments already connected to the massive New York Harbor market. However, the concept has not been adopted by New York's climate planning process. The state's Climate Leadership and Community Protection Act (CLCPA), passed in 2019, mandates carbon neutrality plans, including a 40% reduction in economy-wide greenhouse gas emissions by 2030. The law also requires that at least 35 percent of clean energy funds be directed to underserved communities, and it established the Climate Action Council to recommend policies to achieve those goals. In contrast to carbon fees or taxes, current LCFS programs do not generate direct revenue for the administering state that can be used for grants or other targeted inducements to shift to cleaner transportation. Fuel producers and suppliers, which can include government transportation authorities or fleet operators, maintain incentives and deficits. Without these tools, critics warn that an LCFS would leave disadvantaged communities vulnerable to continued pollution and higher fuel prices. On April 5, the climate council will hold public hearings across the state for its draft climate plan, which will detail concerns that an LCFS would not meet the law's goals. In December, a majority of the council adopted language that reduced an endorsement of an LCFS to including it as an option, in keeping with the rest of the draft plan. Additionally, Assemblywoman Carrie Woerner amended her LCFS legislation in March 2022 to require utilities, state agencies, and other authorities designated by the climate council to dedicate at least 40% of their LCFS credit revenues to climate programs for disadvantaged communities. Other language in the latest bill aligns proposals with the CLCPA process and adds a requirement to review lifecycle emissions each year.
- The state of New York is preparing its third offshore wind solicitation. In an upcoming solicitation, New York regulators may seek more than 4,600MW of offshore wind generation capacity. According to a draft version released on March 11, the state's upcoming request for proposals will target 2,000MW-4,640MW of offshore renewable energy certificates (ORECs). The solicitation's upper limit, the state's third to date, would bring New York all the way to its 9,000MW by 2035 offshore wind target, with the state already contracting for approximately 4,300MW through its two previous calls for projects. For ORECs, base proposals can use either an index or a fixed pricing structure, and must include pricing for a 25-year contract. Pricing for a 20-year agreement may also be included in bids. Electricity delivered to NYISO grid areas representing New York City and Long Island must also be included in the base proposal. Bidders would retain the rights to any ORECs generated in excess of the credits contracted for by New York each year, and the state would have no claim to the generation, capacity, or ancillary services associated with the credits for which the agency does contract. While the New York State Energy Research and Development Authority (NYSERDA) does not require proposals to include energy storage, it may be included if certain criteria are met, such as being located in NYISO zones that cover New York City and Long Island. The base proposals must also include a standalone project and up to three "investment plans" to expand New York's port infrastructure and manufacturing, which will play a significant role in determining which bids NYSERDA ultimately selects. Bidders must submit a $500,000 deposit to cover the costs of evaluating the base proposal. Each additional alternative proposal and investment strategy would cost $25,000 each. NYSERDA anticipates launching the solicitation in the second quarter and will accept comments on the draft proposal until March 25. When the final version is released, it will reveal the specific deadlines for the solicitation.
- New Jersey has postponed the solicitation of offshore wind energy. New Jersey regulators have delayed the state's next offshore wind solicitation in order to accommodate transmission planning for bringing ocean-based electricity to the PJM Interconnection. The New Jersey Board of Public Utilities (BPU) announced on February 28 that the state's third offshore wind solicitation will be held in January 2023, rather than September as previously planned. The state plans to issue its fourth and fifth solicitations in the second quarters of 2024 and 2026, respectively. The change, according to the agency, aligns its next request for proposals with the "state agreement approach" (SAA) process, a collaboration between New Jersey and the PJM Interconnection designed to incorporate the former's offshore wind goals into the grid operator's transmission planning process.
- New Jersey added 9MW of solar capacity. According to the New Jersey Clean Energy Program, the state added just over 9.3MW of new capacity in February. The state’s solar sector continued its relatively slow growth rate into the new year. This capacity is approximately 0.3MW less than the total initially reported for February 2021 and approximately 5.4MW less than the initial data for February 2020. The totals should rise in the coming months as the state's data is updated. In this recent report, 4.6MW was added to the total new capacity for January, bringing it to 14.9MW. So far this year, New Jersey has added just under 25MW of new solar, compared to 30.5MW at the same point in 2021. Approximately two-thirds of last month's capacity, or about 6MW, qualified for the state's transition solar incentive program, under which projects receive transition renewable energy certificates that the state's four electricity distributors will purchase at a base price of $152/MWh for the first 15 years of the facility's lifecycle. The remaining new capacity, approximately 3.3MW, was fed into the new SREC-II program's administrative determined incentive (ADI) track, the fixed-price component of the state's successor program, which began operations in August.
- The remaining coal plants in New Jersey are scheduled to close. The two-remaining coal-fired power plants in New Jersey are scheduled to close in the coming months. Starwood Energy informed the PJM Interconnection in early March that the Chambers and Logan generating stations would be shut down on May 31. PJM has already completed a reliability analysis on the requested closures and found no grid impacts. Furthermore, on March 23, New Jersey's Public Board of Utilities stated that Exelon subsidiary Atlantic City Electric Company can end agreements through which the utility bought and sold the majority of the power generated by the Chambers and Logan plants "after a brief transition period." Those contracts were previously set to expire in March 2024. The generating stations at Chambers and Logan have capacities of 240MW and 219MW, respectively. Their closure will have an impact on coal mines in Central and Northern Appalachia.
RGGI News
- The RGGI CO2 allowance auction price has reached new highs. The Regional Greenhouse Gas Initiative (RGGI) CO2 allowance auction, which took place on March 9, set a new record price of $13.50 per short ton. The first auction of the year for the cap-and-trade program sold all of the more than 21.7 million CO2 allowances available. The clearing price was 50/st higher than the previous high of $13/st set at the auction on December 1st. It was the fifth auction in a row to set a new high clearing price. Despite setting a new record, the clearing price was not high enough to release allowances from the program's cost-containment reserve, which currently stands at just over 11.6 million st; the trigger price for this year is $13.91/st. The previous auction, which had a lower trigger price, sold more than 3.9 million allowances from the reserve from last year. Compliance-oriented entities bought 72 pc of the allowances available, up from 67 pc in the December auction. According to the program, 44 pc of all allowances in circulation are held for compliance purposes, down from 50 pc at the December auction. Bids ranged from the program's price floor of $2.44/st to $30.00/st, with submitted bid volumes 2.5 times greater than available allowances. The auction raised nearly $294 million in funds for states to reinvest in energy efficiency, clean energy, and greenhouse gas reduction programs. CO2 allowances were awarded to 59 of the 75 bidders at the end of the auction. Five bidders bought more than a million allowances, while 30 bought at least 100,000 allowances.
- Legislators in New York want to limit the transfer of RGGI funds. The New York State Assembly has passed legislation that limits the state's ability to redirect funds generated by the Regional Greenhouse Gas Initiative (RGGI). The bill, which was unanimously passed by the Assembly on March 7, now moves to the Senate, where a similar proposal has been introduced. According to state law, RGGI revenues go into a fund for energy efficiency and clean energy programs, with a 2019 climate law mandating that at least 35% of spending benefit disadvantaged communities. Assembly Bill A7611B makes it clear that regulators who distribute RGGI funds must follow those rules. However, if RGGI proceeds are transferred to other funds, they must eventually be spent in a way that is related to the purpose of RGGI, and the state comptroller must submit a report to state leaders with a "detailed description of the use of such proceeds."
- A New York power plant fails to meet RGGI compliance once more. A power plant in New York failed to surrender enough CO2 allowances to meet its interim Regional Greenhouse Gas Initiative (RGGI) compliance obligations for 2021. According to RGGI data released on March 2, all but one of the 226 facilities covered by the cap-and-trade program met their interim compliance requirements. The only facility that failed to meet its compliance obligations was the 60MW Black River power plant in northern New York. Because they were produced by the combustion of sustainably harvested biomass, more than three-quarters of Black River's 613,780 short tons (st) of CO2 emissions last year were exempt from RGGI. However, the plant refused to surrender any allowances to cover the remaining 70,510st of emissions. Black River, which began as a coal plant before transitioning to primarily burning biomass in 2013, has a history of failing to meet RGGI compliance deadlines. Neither the 2015-17 nor the 2018-2020 compliance periods saw the plant meet its obligations. A plant that is not in compliance with RGGI in New York must pay a penalty equal to three times the number of allowances it owes. Previously, the state issued a consent order requiring Black River to pay approximately $2.2 million to cover outstanding RGGI obligations. It's unclear whether the New York State Department of Environmental Conservation will pursue additional penalties against Black River for allegedly missing another compliance deadline.
- Senators from Pennsylvania are requesting an RGGI cost audit. Pennsylvania senators have requested that a budget watchdog "examine and audit" modeling used by state agencies to justify their participation in the Regional Greenhouse Gas Initiative (RGGI). In a letter to the state's Independent Fiscal Office (EQB), Senators Gene Yaw and John Yudichak announced plans to hold a joint committee hearing to "address significant, increasing concerns over the outdated and inaccurate RGGI modeling" conducted by the consulting firm ICF International and relied on by the state Environmental Quality Board. The lawmakers requested that the office, which provides the legislature with revenue predictions, re-evaluate the economic modeling and testify about its results.
- Critics of the RGGI in Pennsylvania are attempting to prevent entry. On March 30, the Pennsylvania House of Representatives passed a legislation prohibiting state agencies from imposing a carbon pricing without legislative approval. This is the latest attempt by lawmakers to keep Pennsylvania out of the Regional Greenhouse Gas Initiative (RGGI). HB 637 was passed by a vote of 126-72 and now goes to the state Senate. The bill states that state agencies cannot impose a carbon tax without legislative consent, and that the state Department of Environmental Protection (DEP) cannot take any action "to abate, restrict, or limit carbon dioxide emissions" unless it is required to do so by the federal government. The law was revised early this year to include $250 million in state subsidies for initiatives to reduce CO2 and methane emissions, stormwater mitigation programs, and help for towns affected by the shutdown of power or manufacturing operations.
- Youngkin issues a failure report for RGGI. Virginia Governor Glenn Youngkin is resuming his push to have his state removed from the Regional Greenhouse Gas Initiative (RGGI), claiming in a new report that the program has not benefited Virginia. The 78-page report, released on March 15, is highly critical of RGGI and includes a proposed emergency regulation for leaving the CO2 cap-and-trade program for power plants in the eastern United States. According to the research, RGGI disadvantages Virginia customers because it "lacks any incentive for power providers to really cut carbon-intensive gas emissions," because utilities can pass compliance costs on to ratepayers, and because RGGI allowance prices have risen dramatically over time. Environmental groups, on the other hand, claim that the study undervalues the positives of Virginia's RGGI membership, such as increased funding for flood preparedness and energy efficiency initiatives. A draft emergency regulation to quit the program is included in the report, as well as a draft notice of intended regulatory action to make the rulemaking permanent.
- RGGI bills are rejected by the Virginia Senate. Two legislation that would have changed or eliminated Virginia's membership in the Regional Greenhouse Gas Initiative (RGGI) were defeated by Senate Democrats. On a party-line vote on February 28, the Senate Committee on Commerce and Labor agreed with a subcommittee's proposal to table HB118, which would have repealed the Virginia Clean Economy Act (VCEA). That law authorized the state's RGGI regulations and set more aggressive clean energy mandates. Additionally, on March 1, the Senate Finance and Appropriations Committee rejected HB892, which would have provided discounted CO2 allowances to corporations with long-term electricity contracts prior to Virginia entering the RGGI.
RGGI Price Chart
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