By William Opalka

A hydropower owner is seeking rehearing of New York’s Clean Energy Standard, which limited the state’s new zero-emission credits (ZECs) to nuclear generators (15-E-0302).

In a petition filed Aug. 23, Ampersand Hydro said it was arbitrarily excluded from the New York Public Service Commission’s “discriminatory” Aug. 1 order. The filing appears to be the first in what is anticipated to be numerous challenges to the commission’s order.

Ampersand said the PSC erred by “arbitrarily and capriciously failing to develop an implementation plan that permits small hydro generation resources to also be treated as a zero-emission facility and unjustly and unreasonably discriminat[ed] in providing nuclear generation facilities a significant competitive advantage over competing generation resources, including small hydro generation.”

Ampersand says small hydropower should enjoy the same treatment as nuclear under the standard: 12-year contracts with a subsidy of $17.48/MWh for the first two years with adjustments every two years thereafter.

The commission order calculated the subsidy based on EPA’s social cost of carbon, minus revenue paid to the state under the Regional Greenhouse Gas Initiative.

The PSC said the payments were justified because nuclear plants are unprofitable in a low natural gas price environment and New York’s clean energy goals are at risk if the plants close. Ampersand said it is subject to the same market and clean energy dynamics. (See New York Adopts Clean Energy Standard, Nuclear Subsidy.)

“The CES order explicitly recognized that an important generation resource with zero emissions, small hydro generation resources, may be not able to survive in the competitive wholesale energy market in New York and therefore might be forced to retire,” the company wrote. “Significantly, however, the CES order failed to provide any discussion of why generation resources that no party challenges are zero-emission, renewable resources should be denied ZECs. Instead, the CES order merely deferred any action in favor of additional studies.”

Ampersand specializes in acquiring and rehabilitating small hydropower stations. The Boston-based company controls 12 small merchant hydro stations in New York totaling 18.7 MW with an expected annual production in excess of 70,000 MWh.