NYSERDA’s standard bulk storage contract settles against a market index, not the battery’s own revenue

The standard-form agreement of NYSERDA’s first bulk storage round buys no electricity, capacity or ancillary services from the batteries it covers. It settles the difference between the strike price the developer bid and a market reference price, on every credit the project creates. The form hedges a project against a market index, not against its own trading result.^{1, 4, 5}

NYSERDA, the New York State Energy Research and Development Authority, announced the eight projects of that round, ISCRFP25-1, on 23 September 2026.¹ It had received bid proposals for 46 eligible projects, “totaling roughly 6 gigawatts of power capacity and 30 gigawatt-hours of energy storage capacity”.² Payments do not begin until a project has begun commercial operation, NYSERDA’s announcement says, and all eight are expected to be in service by the end of 2030.¹

The terms below are those of the published standard form: the RFP provided for edits to it before a conformed draft was signed, short of the strike price, so a signed contract may differ in places. None of the signed contracts was among the documents read.

The credit is the Index Storage Credit (ISC): one MWh of discharge capability per day, so a fully available 20 MW / 80 MWh project creates 80 ISCs a day. Each ISC is settled monthly at the strike price minus a reference price built from NYISO energy arbitrage and capacity prices: when the strike price is higher, NYSERDA pays the developer the difference; when the reference price is higher, the developer pays NYSERDA. The RFP presents this as greater revenue certainty for project owners: the strike price is meant to approximate what a project needs to be viable, the reference price what it could reasonably earn in those markets under typical operations, and projects are not required to take part in them. A battery that trades better than the index keeps the difference; one that trades worse is not made whole for the shortfall.⁴

When the reference price is the higher, the standard form limits a month’s debit to the strike price × that month’s ISCs: the developer never owes more per credit than the strike price itself. Nor is the debit due in cash at once: under the form, NYSERDA pays nothing that month, records the debit and deducts it from its later payments, and the developer pays in cash only what is still unrecovered after 12 months, or at the end of the contract delivery term. The programme’s Implementation Plan describes the same limit. ^{5, 6} The RFP itself printed a different formula for that cap, the strike price × the bid power capacity × the hours in the month.⁴ The standard form, for its part, states that it supersedes all prior agreements and understandings on its subject.⁵

The strike price is binding as bid: the RFP says NYSERDA cannot change it through edits to the agreement. It can still move: before award NYSERDA kept the right to ask for revised strike prices, and the standard form adjusts it in set cases, among them those in the table.^{4, 5}

Source: NYSERDA’s ISCRFP25-1 RFP and its standard form agreement.^{4, 5}

Under the standard form, NYSERDA buys ISCs only if the facility reaches at least 95% of its bid power capacity and of its bid storage duration at commercial operation, achieved by the milestone date and with Operational Certification. From then on, a month’s ISCs are its bid power capacity × its bid storage duration, counted up to 8 hours, × the days in the month, scaled down by the share of the month’s capacity lost to outages. Outages shrink the hedge in both directions: fewer credits mean a smaller payment in a month NYSERDA pays, and a smaller debit in a month the developer owes.⁵

Every bid was evaluated at an assumed availability of 95%, with a contract delivery term starting in January 2027 for every project not yet operating, whatever its proposed commercial operation date. Each strike price was converted into a levelized net cost per ISC by subtracting NYSERDA’s own forecasts of the reference energy arbitrage and capacity prices. A project on the standard form, by contrast, settles on the availability it achieves and the reference prices the market produces.⁴

Unless NYSERDA agreed otherwise in writing, a winner had to post contract security of USD 20,000 per MWac of bid power capacity within 30 days of the award notification date, in cash, certified funds or a letter of credit, or lose the award unless NYSERDA extended the deadline. A winner that then did not sign within 120 calendar days after NYSERDA provided the conformed draft, extended where NYSERDA was late, forfeited the security and had the award rescinded, and the project might not be eligible for future NYSERDA bulk storage solicitations.^{4, 5}

After signing, the standard form raises the security in steps: a further USD 10,000 per MW of bid power capacity (the form measures MW in alternating current) within two years of the effective date, unless the seller instead shows an executed NYISO interconnection agreement, and a further USD 10,000 per MW no later than one year before the initial commercial operation milestone date. By our count, the steps come to USD 40,000 per MW of bid power capacity by one year before the initial commercial operation milestone date, or USD 30,000 where an interconnection agreement takes the place of the two-year step. An extension of the commercial operation milestone date needs a further USD 5,000 per MW of security, and is NYSERDA’s to grant in its sole discretion, only where construction has commenced and the delays are beyond the seller’s control.⁵

Under the form, NYSERDA refunds the security in full when the facility achieves Operational Certification at its Bid Power Capacity and Bid Storage Duration, and keeps all of it if the seller has not posted the security required under the two-year step by one year before the initial commercial operation milestone date, or misses the commercial operation milestone date without posting the extension security.⁵

Only projects found eligible in a first step could bid, and a bid had to meet minimum eligibility thresholds before it was evaluated on price and non-price factors. The thresholds included site control, interconnection, a permitting plan to enter operation by 31 December 2030 and development experience.⁴

Price then weighed 60% and non-price factors 40%: project viability and maturity 20%, electricity system value 10% and economic benefits 10%, with bids ranked in two separate orders, under 8 hours and 8 hours or more. The proposer also bid its own contract tenor, the period of ISC payments: at most 15 years for a lithium-ion project and 25 for any other.⁴

A bid whose strike price exceeded the Benchmark ISC Cost for its duration category, which the RFP defines as confidential maximum price levels and calls its maximum bid price metric, was ineligible; the proposer was not told of that finding, and its bid fee was not returned. The programme’s Implementation Plan says the maximum levelized net ISC cost that bids may not exceed is set confidentially between NYSERDA and the Department of Public Service for each solicitation. Bidders priced without knowing the ceiling.^{4, 6}

NYSERDA’s results factsheet lists them by region: seven have a duration of 4 hours and one of 8 hours, and their capacities add up to 950 MW.³

Source: NYSERDA’s results factsheet, tables by region.³

NYSERDA states that it intends to issue the second bulk energy storage solicitation by the end of 2026, the second of at least three bulk storage procurements using the ISC mechanism that the Public Service Commission’s order of 20 June 2024 directed it to run.^{2, 4, 5}

For the first round, the RFP lets NYSERDA publish the executed agreements, or relevant terms in them, and says it will not entertain any request to redact price information. Published in full, the agreements would show the eight contracts’ strike prices.⁴

The battery storage guide sets this route beside the other ways storage is procured.

ListingMinds, “NYSERDA’s standard bulk storage contract settles against a market index, not the battery’s own revenue”, 22 October 2026. https://www.listingminds.com/energy/field-notes/nyserda-bulk-storage-round