ML12212A395
| ML12212A395 | |
| Person / Time | |
|---|---|
| Site: | Indian Point  |
| Issue date: | 07/27/2012 |
| From: | State of NY, Dept of State |
| To: | Atomic Safety and Licensing Board Panel |
| SECY RAS | |
| References | |
| RAS 23072, 50-247-LR, 50-286-LR, ASLBP 07-858-03-LR-BD01 | |
| Download: ML12212A395 (185) | |
Text
ATTACHMENT 17
Consistency Review Federal Consistency The Federal regulations that implement the consistency provisions of the Coastal Zone Management Act (CZMA) are found at 15CFR Part 930. These regulations establish the procedures to be followed in order to assure that federal agency activities are consistent with the enforceable policies of the New York State Coastal Management Program. The types of activities that are covered by these regulations are:
activities directly undertaken by, or on behalf of, federal agencies; activities requiring authorizations or other forms of approval from federal agencies; activities involving financial assistance from federal agencies; and outer continental shelf activities.
Federal consistency provisions apply to activities both in the States coastal area and outside of the coastal area when the activities would affect coastal resources or coastal land and water uses (see 15 CFR 930.11(b) and 15 CFR 930.11(g)).
The procedures to be followed vary depending on the type of federal activity, and are described in the consistency section of the CMP document. The following summarizes the procedures to be followed:
Activities directly undertaken by or on behalf of federal agencies Any federal agency considering undertaking an activity is required to submit a consistency determination and other necessary information and data to the Department of State. The consistency determination must:
include a brief statement by the federal agency indicating whether a proposed activity will be undertaken in a manner consistent to the maximum extent practicable (see 15 CFR 930.32 for explanation of the term "consistent to the maximum extent practicable") with the State's coastal policies.
must be based on an evaluation of relevant CMP policies, include a detailed description of the activity, its associated facilities, and their coastal effects, and include comprehensive data and information to support the federal agency's consistency statement (see 15 CFR 930, Subpart C).
Unless an alternative schedule is agreed to by the Department of State and the federal agency, a federal agency's consistency determination is required to be submitted to the Department of State at least ninety days (90) prior to final approval by the federal agency of the activity.
The Department of State reviews a federal agency's proposed activity and consistency determination, and renders its own decision regarding the consistency of the activity with the CMP. This is usually accomplished within sixty (60) to seventy five (75) days of receipt of a federal agency consistency determination. The Department and federal agencies may agree to other time frames.
It is important to note that federal coastal consistency obligations are independent of National Environmental Policy Act (NEPA) requirements and are not fulfilled by submission of a NEPA document. However, federal agencies are encouraged to include relevant coastal effects and coastal policy analysis information in NEPA processes and documents. A federal agency may include a consistency determination in a NEPA document so long as the federal agency ensures the document includes the relevant information and adheres to time frames in 15 CFR 930, Subpart C (see also 15 CFR 930.37).
Federal consistency provisions preclude federal agencies from undertaking activities when it is determined they are not consistent with the State's coastal policies or special management area plans, such as Local Waterfront Revitalization Programs, that are approved elements of the State Coastal Management Program.
Activities requiring federal agency authorizations or approvals Anyone who applies for a federal agency license or permit, including authorizations, certifications, approvals, leases, or other forms of permission, is required to submit a certification that the proposed activity is consistent with all applicable State coastal policies.
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The consistency certification must include:
a completed Federal Consistency Assessment Form; an identification of coastal policies affected by an applicant's proposed activity; a brief assessment of the effects of the activity on the applicable policies; and, a statement indicating how the activity is consistent with each applicable policy (see 15 CFR 930, Subpart D, and instructions in Federal Consistency Assessment Form (FCAF)
This certification and all other data and information necessary to assess the coastal effects of a proposed activity is to be submitted in an application to the federal agency. Applicants are also required to submit a copy of the federal application, the consistency certification, and the other necessary information and data to the Department of State at the same time it is submitted to the federal agency. If a proposal is the subject of an Environmental Impact Statement (EIS), pursuant to either the National Environmental Policy Act or the State Environmental Quality Review Act, the final EIS may be required before the Department formerly initiates its review.
The Department of State is required to review a proposed activity and consistency certification. The Department will then make a decision whether a proposed activity is consistent with the applicable policies of the CMP. During its review, if it appears that a proposal may in some way not be consistent with the Coastal Management Program, the Department may suggest ways the proposal can be modified to be consistent with the coastal policies.
For most activities the Department's review and decision are completed within thirty days of receipt of a completed consistency certification and all necessary information. In some instances, especially for those activities that are more complicated, involve more coordinated public and interagency reviews, or are the subject of an environmental impact statement the Department's review and decision may take up to three (3) or six (6) months. An applicant and the Department may agree to stay or extend this six month time period to accommodate changes in a proposed activity or resolve outstanding issues.
Federal consistency provisions preclude federal agencies from authorizing any activity if the Department of State determines the activity is not consistent with the State's coastal policies or special management area plans, such as Local Waterfront Revitalization Programs, that are approved elements of the State Coastal Management Program.
The Department's decision may be appealed to the U.S. Secretary of Commerce. An appeal must be based on one or both of the grounds that the proposed activity is consistent with the objectives or purposes of the CZMA, or necessary in the interest of national security (see also 15 CFR Part 930, Subpart H).
Activities involving financial assistance from federal agencies Any State or local government agency that applies for federal financial assistance is required to submit to the Department of State a copy of their application for the financial assistance. The information submitted to the Department of State must also include an evaluation of the relationship of the proposed activity, and its reasonably foreseeable effects on coastal land and water uses or resources, to the State's coastal policies (see 15 CFR 930, Subpart F).
The Department of State is required to review the information provided by the State or local agency seeking financial assistance and render a consistency decision indicating whether or not the Department objects to the activity. Most financial assistance reviews and decisions are completed within thirty days. There may be longer review periods for activities that are more complicated, involve more coordinated public and interagency reviews, or are the subject of environmental impacts statements.
Federal consistency provisions preclude federal agencies from funding any activities when the Department of State determines that the activity to be funded is not consistent with the State's coastal policies or special management area plans, such as Local Waterfront Revitalization Programs, that are approved elements of the State Coastal Management Program.
For any entity, other than a state or local government agency, that applies for federal financial assistance, their funding application will be subject to the consistency procedures applicable to direct federal activities.
Outer continental shelf exploration, development and production activities Special procedures apply to this relatively uncommon activity (see 15 CFR 930, Subpart E).
Federal Consistency Assessment Form >>
FCAF - to be completed only by applicants for federal agency authorizations For projects requiring a permit from the U.S. Army Corps of Engineers, the Joint NYS Department of Environmental Conservation/ U.S. Army Corps of Engineers application form is available at:
Joint Application web page >>
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Consistency Decisions >>
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ATTACHMENT 18
STATE ENERGY PLANNING BOARD 2009 State Energy Plan Volume I GOVERNOR DAVID A. PATERSON STATE OF NEW YORK DECEMBER 2009
ii Energy Planning Board (Board)
The members of the Energy Planning Board are:
Thomas Congdon, Chair, State Energy Planning Board Deputy Secretary for Energy, Office of the Governor Garry Brown, Chair State Public Service Commission Lorraine Cortes-Vasquez, Secretary of State Department of State Dr. Richard Daines, Commissioner Department of Health Department Peter Iwanowicz, Assistant Secretary for Environment Office of the Governor Stanley Gee, Acting Commissioner Department of Transportation Alexander Pete Grannis, Commissioner Department of Environmental Conservation Robert Megna, Director State Division of the Budget Dennis M. Mullen, Chief Executive Officer Empire State Development Corporation Francis J. Murray, Jr., President and CEO New York State Energy Research and Development Authority The staff to the Energy Planning Board are:
Sarah Osgood, Executive Director, State Energy Planning Board Assistant Secretary for Renewable Energy, Office of the Governor Suzanne Baker, Outreach Coordinator, State Energy Planning Board Executive Assistant, New York State Energy Research and Development Authority Hal Brodie, Counsel, State Energy Planning Board General Counsel, New York State Energy Research and Development Authority David Munro, Secretary, State Energy Planning Board Deputy Counsel, New York State Energy Research and Development Authority
iii Energy Coordinating Working Group (ECWG)
The members of the ECWG are:
Jeffrey Cohen, Deputy for Policy and Legal Affairs Department of Public Service Keith Corneau, Director of Energy Policy Empire State Development Corporation Michael Deering, Vice President of Environmental Affairs Long Island Power Authority Donald Duvall, Senior Budget Examiner Division of Budget Stephen Hammond, Senior Energy Coordinator Department of Environmental Conservation Nancy Kim, Senior Executive, Center for Environmental Health Department of Health Victoria Simon, Chief of Staff and Director of Energy Policy New York Power Authority George Stafford, Deputy Secretary of State Department of State John Williams, Director, Energy Analysis New York State Energy Research and Development Authority John Zamurs, Head, Air Quality, Energy and Climate Change Section Department of Transportation
iv Acknowledgements The Board wishes to acknowledge and recognize the leadership and guidance of Paul A. DeCotis, former Chair of the Energy Planning Board, in development of the State Energy Plan.
Additionally, for their contribution to the Energy Planning process, the Board wishes to acknowledge the following staff members of the agencies and authorities participating in the Energy Coordinating Working Group: Lou Adams, Christopher Amato, Robert Ancar, Joseph Ball, Sally Ball, John Barnes, Diane Barney, Alan Belensz, Paul Beyer, Russ Brauksieck, Dean Briggs, Peter Briggs, Kathleen Brust, Judeen Byrne, Ken Carlson, Frederick Carr (consultant), Echo D. Cartwright, David Clements, Cynthia Costello, Dave Coup, Robert Crowder, Justin Cushing, Joseph Darling, Peggy Davidson, Jim Davis, Emily Denman, Erin Derrington, Karen Donovan, Christina Dowd, Daniel Downs, Regina Doyle, David Drexler, Seth Edelman, Douglas Elfner, Judith Enck, Victoria Engel, Ron Epstein, Nathan Erlbaum, Jamie Ethier, Kim Farrow, Gina Fedele (consultant), Sean Ferguson, Leonard Gaines, Kenneth Galarneau, Lisa Garcia, David Gardner, Colleen Gerwitz, Leka Gjonaj, Cherie Gregoire, Chris Hall, Kenneth Hamm, Don Hannon, Mary Harding, Kimberly Harriman, William Heinrich, James Held, Erin Hogan, Anna Hughes, Peter Iwanowicz, Janet Joseph, Carole Ju, Mary Kadlecek, Andrew Kasius, Steven Keller, Helen Kim, Gennadiy Kosoy, Jennifer Kozlowski, Andrew Labruzzo, Ted Lawrence, Patrick Lentlie, Catherine Leslie, Sarah Lewis, William Little, Thomas Lynch, John Madden, Michael Mariotti, John Marotta, Lydia Marquez-Bravo, Carl Mas, Jennifer McCormick, Joseph McLean, Jennifer Meissner, Karl Michael, Alice Miller, Valerie Milonovich, Peter Minotti, Paul Molina, Emery Moore, Michelle Moore, Douglas Morrison, Steve Munson, Jack Nasca, Carole Nemore, Helen Nieman, John Osinski, Larry Pakenas, Jim Parmelee, Thomas Paynter, Gordie Peters, Karen Rae, Sheila Rapazzo, Anne Reynolds, Karyn Richards, Michael Riggi, Paula Rosenberg, Nancy Ross, Michelle Salisbury, Michael Scott, Khalil Shalabi, Janine Simonsen, Rob Sliwinski, Colleen Smith-Lemmon, Jared Snyder, Matthew Sokol, Keith Sonin, Henry Spliethoff, Julie Sweet, Marley Urdanick, Alan Warde, Mark Watson, Cheryle Webber, Lynn Weiskopf, Diane Welch, Charles Wesley, David Wheat, Rachel Winters, Marilyn Wurth, Dan Zaweski, Robert Zerrillo.
The Board also wishes to acknowledge the analytical support provided by the New York Independent System Operator.
v Table of Contents ACRONYMS AND ABBREVIATIONS................................................................................................. vii EXECUTIVE
SUMMARY
..................................................................................................................... xiii Strategy 1: Produce, Deliver, and Use Energy More Efficiently......................................................... xiii Strategy 2: Support Development of In-State Energy Supplies........................................................... xiv Strategy 3: Invest in Energy and Transportation Infrastructure............................................................ xv Strategy 4: Stimulate Innovation in the Clean Energy Economy........................................................ xvi Strategy 5: Engage Others in Achieving the States Policy Objectives.............................................. xvii PREFACE................................................................................................................................................. xix 1 NEW YORKS ENERGY POLICY....................................................................................................... 1 1.1 Planning Objectives......................................................................................................................... 1 1.1.1 Maintain Reliability............................................................................................................ 2 1.1.2 Reduce Greenhouse Gas Emissions.................................................................................... 3 1.1.3 Stabilize Energy Costs and Improve Economic Competitiveness...................................... 4 1.1.4 Reduce Public Health and Environmental Risks................................................................ 5 1.1.5 Improve Energy Independence........................................................................................... 5 1.2 Clean Energy Strategies................................................................................................................... 6 1.2.1 Produce, Deliver, and Use Energy More Efficiently.......................................................... 7 1.2.2 Support Development of In-State Energy Supplies............................................................ 8 1.2.3 Invest in Energy and Transportation Infrastructure............................................................ 9 1.2.4 Stimulate Innovation in the Clean Energy Economy.......................................................... 9 1.2.5 Engage Others in Achieving the States Policy Objectives.............................................. 10 2 PRODUCE, DELIVER, AND USE ENERGY MORE EFFICIENTLY.......................................... 11 2.1 End-Use Efficiency........................................................................................................................ 11 2.1.1 The History of State Support............................................................................................ 11 2.1.2 Potential for Additional Efficiency Savings..................................................................... 12 2.1.3 Realizing Potential Savings.............................................................................................. 14 2.2 Electric System Efficiency............................................................................................................. 32 2.2.1 Progress to Date................................................................................................................ 32 2.2.2 Potential for Additional Efficiencies................................................................................ 33 3 SUPPORT DEVELOPMENT OF IN-STATE ENERGY SUPPLIES.............................................. 39 3.1 Renewable Energy......................................................................................................................... 39 3.1.1 In-State Potential and Development Progress................................................................... 40 3.1.2 Renewable Policies........................................................................................................... 43 3.1.3 Expanded State Renewable Policy Goal........................................................................... 48 3.1.4 Challenges and Recommendations................................................................................... 50 3.2 Natural Gas.................................................................................................................................... 55 3.2.1 In-State Potential and Development Progress................................................................... 55 3.2.2 Challenges and Recommendations................................................................................... 57
Table of Contents vi 4 INVEST IN ENERGY AND TRANSPORTATION INFRASTRUCTURE..................................... 59 4.1 Infrastructure Investment and Climate Change............................................................................. 59 4.2 Electricity....................................................................................................................................... 61 4.2.1 Electricity Generation....................................................................................................... 61 4.2.2 Electricity Transmission and Distribution........................................................................ 65 4.3 Natural Gas.................................................................................................................................... 68 4.4 Petroleum Fuels............................................................................................................................. 69 4.5 Transportation................................................................................................................................ 70 5 STIMULATE INNOVATION IN THE CLEAN ENERGY ECONOMY........................................ 73 5.1 New Yorks Unique Strengths....................................................................................................... 74 5.1.1 Our Academic/Industrial Base.......................................................................................... 74 5.1.2 NYSERDA, NYSTAR and the Innovation Economy...................................................... 78 5.2 Support Clean Energy Markets...................................................................................................... 81 5.2.1 Generate Demand for Clean Energy Technologies........................................................... 81 5.2.2 Workforce Development................................................................................................... 82 5.3 Retain Firms and Attract Firms that will Thrive in the Clean Energy Economy........................... 84 5.3.1 Retaining New Yorks Existing Base in a Carbon-constrained Economy........................ 84 5.3.2 Attracting Firms that will Thrive in Clean Energy Economy........................................... 86 6 ENGAGE OTHERS IN ACHIEVING THE STATES POLICY OBJECTIVES........................... 87 6.1 Local Governments and Communities........................................................................................... 87 6.1.1 Code Enforcement............................................................................................................ 87 6.1.2 Planning............................................................................................................................ 88 6.1.3 Local Initiatives................................................................................................................ 90 6.1.4 Community and Citizen Participation............................................................................... 91 6.2 Other States and Provinces............................................................................................................ 93 6.2.1 Regional Greenhouse Gas Initiative................................................................................. 93 6.2.2 Northeast and Mid-Atlantic States Governors Meeting.................................................... 94 6.2.3 Mid-Atlantic Regional Council on the Ocean................................................................... 94 6.2.4 Great Lakes Wind Collaborative...................................................................................... 94 6.2.5 I-95 Coalition.................................................................................................................... 95 6.2.6 Coalition of Northeast Governors..................................................................................... 95 6.2.7 Other Regional Initiatives................................................................................................. 95 6.3 Participating in the National Debate and Coordinating with Federal Agencies............................ 96 6.3.1 National Policy................................................................................................................. 96 6.3.2 Agency Coordination........................................................................................................ 97 7 IMPLEMENTATION PLAN............................................................................................................... 99 A1 STAKEHOLDER INPUT................................................................................................................ 125
vii Acronyms and Abbreviations AASHTO: American Association of State Highway and Transportation Officials AAU: Association of American Universities Ag&Mkts: New York State Department of Agriculture and Markets AMI: Advanced Metering Infrastructure ARRA: American Recovery and Reinvestment Act ASHRAE: American Society of Heating, Refrigerating, and Air-Conditioning Engineers Board: Energy Planning Board BOCES: Board of Cooperative Educational Services BOMA: Building Owners and Managers Association Btu: British Thermal Unit CAFE: Corporate Average Fuel Economy CCS: Carbon Capture and Sequestration CHP: Combined Heat and Power CNSE: The College of Nanoscale Science and Engineering CPB: New York State Consumer Protection Board CO2: Carbon Dioxide CONEG: Coalition of Northeast Governors CUNY: City University of New York DASNY: Dormitory Authority of the State of New York DEC: New York State Department of Environmental Conservation DER: Distributed Energy Resources DG: Distributed Generation DHCR: New York State Division of Housing and Community Renewal
Acronyms and Abbreviations viii DOB: New York State Division of Budget DOE: United States Department of Energy DOH: New York State Department of Health DOS: New York State Department of State DOT: New York State Department of Transportation DPS: New York State Department of Public Service EAG: Evaluation Advisory Group Energy Code: Energy Conservation Construction Code ECWG: Energy Coordinating Working Group EEPS: Energy Efficiency Portfolio Standard EIA: United States Energy Information Administration EISA: Energy Independence and Security Act EM&V: Evaluation, Monitoring, and Verification EPA: United States Environmental Protection Agency ESCO: Energy Service Company ESD: Empire State Development Corporation FERC: Federal Energy Regulatory Commission FHWA: Federal Highway Administration GHG: Greenhouse Gas GSIP: Green Strategic Investment Program GWh: Gigawatt Hour HVAC: Heating, Ventilation and Air Conditioning ICC: International Code Council IECC: International Energy Conservation Code ITS: Intelligent Transportation Systems kW: Kilowatt
Acronyms and Abbreviations ix kWh: Kilowatt Hour LEED: Leadership in Energy and Environmental Design LEV: Low Emission Vehicles LIHEAP: Low Income Home Energy Assistance Program LIPA: Long Island Power Authority LNG: Liquefied Natural Gas MARCO: Mid-Atlantic Regional Council on the Ocean MDth: Thousand Dekatherms MMBtu: Million British thermal units; million Btu MMS: Minerals Management Service MPO: Metropolitan Planning Organization MTA: Metropolitan Transportation Authority MW: Megawatt MWh: Megawatt Hour NACAA: National Association of Clean Air Agencies NARUC: National Association of Regulatory Utility Commissioners NEMAG: Northeast and Mid-Atlantic States Governors NESCAUM: Northeast States for Coordinated Air Use Management NOx: Nitrogen Oxides NY BEST: New York Battery and Energy Storage Technology Consortium NYC EDC: New York City Economic Development Corporation NYISO: New York Independent System Operator NYPA: New York Power Authority NYSDOL: New York State Department of Labor NYSERDA: New York State Energy Research and Development Authority NYSTAR: New York State Foundation for Science, Technology and Innovation
Acronyms and Abbreviations x
OGS: Office of General Services ORPS: New York State Office of Real Property Services OTDA: New York State Office of Temporary and Disability Assistance PANYNJ: Port Authority of New York and New Jersey PHEV: Plug-in Hybrid Electric Vehicle Plan: State Energy Plan PPA: Power Purchase Agreement PSC: Public Service Commission PSL: Public Service Law PV or Solar-PV: Solar Photovoltaic REBNY: Real Estate Board of New York REC: Renewable Energy Credit RFP: Request for Proposals RFS: Renewable Fuel Standard RGGI: Regional Greenhouse Gas Initiative RNA: Reliability Needs Assessment RPS: Renewable Portfolio Standard SAFETEA-LU: The Federal Safe, Accountable, Flexible, and Efficient Transportation Equity Act: A Legacy for Users SBC: System Benefits Charge SEQRA: State Environmental Quality Review Act SGEIS: Supplemental Generic Environmental Impact Statement SO2: Sulfur Dioxide STARS: New York State Transmission Assessment and Reliability Study STEP: Saratoga Technology + Energy Park SUNY: State University of New York T&F: New York State Tax & Finance
Acronyms and Abbreviations xi TBtu: Trillion Btu TIP: Transportation Improvement Program TOD: Transit Oriented Development TWY: New York State Thruway Authority UNFCCC: United Nations Framework Convention on Climate Change USDOT: United States Department of Transportation VMT: Vehicle Miles Traveled WAP: Weatherization Assistance Program
Acronyms and Abbreviations xii
xiii Executive Summary The 2009 New York State Energy Plan (Plan or Energy Plan) sets forth a vision for a robust and innovative clean energy economy that will stimulate investment, create jobs and meet the energy needs of residents and businesses over its 10-year planning horizon. To that end, the Plan provides the framework within which the State will reliably meet its future energy needs in a cost-effective and sustainable manner, establishes policy objectives to guide State agencies and authorities as they address energy-related issues and sets forth strategies and recommendations to achieve these objectives.
The Plans strategies and recommendations have been designed to meet five policy objectives:
Assure that New York has reliable energy and transportation systems; Support energy and transportation systems that enable the State to significantly reduce greenhouse gas (GHG) emissions, both to do the States part in responding to the dangers posed by climate change and to position the State to compete in a national and global carbon-constrained economy; Address affordability concerns of residents and businesses caused by rising energy bills, and improve the States economic competitiveness; Reduce health and environmental risks associated with the production and use of energy across all sectors; and Improve the States energy independence and fuel diversity by developing in-state energy supply resources.
Five strategies are outlined in the Plan, which simultaneously achieve these multiple policy objectives.
The strategies are: (1) produce, deliver and use energy more efficiently; (2) support development of in-state energy supplies; (3) invest in energy and transportation infrastructure; (4) stimulate innovation in a clean energy economy; and (5) engage others in achieving the States policy objectives.
Strategy 1: Produce, Deliver, and Use Energy More Efficiently The Plan has identified energy efficiency as the priority resource for meeting its multiple objectives. New York has been among the nations leaders in implementing market-based programs to help ensure that energy efficiency is recognized as a cost-effective alternative to supply-side energy resources. Investing in end-use energy efficiency, across all sources of energy and across all energy-using sectors, is the most economical approach to expanding the States clean energy economy. In the short-run, investments in energy efficiency reduce energy use and bills for participating customers. In the long-run, a significant reduction in electricity demand has been shown to put downward pressure on wholesale electricity prices, reduce price volatility, and reduce emissions of carbon dioxide (CO2) and other air pollutants. Energy efficiency improvements in the transportation sector will reduce dependence on foreign oil and will reduce emissions, which is of critical importance in congested areas of the State with poor air quality.
Energy efficiency investments have also been shown to increase employment opportunities in the State.
Additionally, promoting energy efficiency in low income communities, and making energy efficiency
Executive Summary xiv upgrades to affordable housing, can reduce energy-related economic burdens on low income New Yorkers. Finally, improving overall electric system efficiency in a cost-effective manner will also mitigate unavoidable price increases associated with replacement of aging infrastructure, and reduce environmental impacts.
This strategy will be furthered by a number of recommendations summarized below. A full discussion is found in Chapter 2.
Implement programs to achieve the States goal of reducing electricity use by 15 percent below 2015 forecasts.
Implement alternative financing programs to fund energy efficiency retrofits.
Improve coordination of all end-use energy efficiency programs administered by the State and local governments and utilities, and consistently measure and report results.
Update the States Energy Code and improve training and compliance initiatives.
Enact efficiency standards for products for which the federal government does not preempt the states.
Ensure energy efficiency programs reach low income customers who are particularly vulnerable to rising energy prices.
Increase the efficiency of the States electric system through expanded demand response programs deployment of Smart Grid technologies, and real time pricing rate structures.
Improve energy efficiency in public buildings.
Improve consumer awareness of energy use and costs through the use of energy benchmarking programs and energy disclosure requirements in real estate transactions.
Reduce Vehicle Miles Traveled (VMT) by expanding alternative transportation options.
Work with the federal government to strengthen Corporate Average Fuel Economy (CAFE) standards, and change transportation funding formulae to encourage energy efficiency.
Supplement Truth in Heating law requirements to ensure that prospective purchasers of buildings are provided relevant information regarding key energy efficiency attributes of buildings.
Strategy 2: Support Development of In-State Energy Supplies Production and use of in-state energy resources - renewable resources and natural gas - can increase the reliability and security of our energy systems, reduce energy costs and contribute to meeting climate change, public health and environmental objectives. Additionally, by focusing energy investments on in-state opportunities, New York can reduce the amount of dollars exported out of the State to pay for energy resources. Increased use of renewable resources should not be limited to power generation: many applications of renewable resources - e.g., solar thermal installations and biofuel blends - have the potential to provide substantial energy and environmental benefits.
Executive Summary xv This strategy will be furthered by a number of recommendations summarized below. A full discussion is found in Chapter 3.
Implement programs to increase the proportion of renewable generation to 30 percent of electricity demand by 2015.
Create a tracking and trading system for Renewable Energy Credits (RECs) to foster the voluntary market for renewable energy purchases.
Encourage bilateral contracts as a mechanism to attract private investment in renewable resources.
Encourage deployment of Distributed Generation (DG) through improved net metering laws.
Expand funding and implementation support for environmentally beneficial distributed energy resources such as solar thermal and geothermal heat pumps.
Encourage development and use of sustainable biomass to displace heating oil and gasoline.
Encourage development of the Marcellus Shale natural gas formation with environmental safeguards that are protective of water supplies and natural resources.
Strategy 3: Invest in Energy and Transportation Infrastructure New Yorks massive energy and transportation infrastructure is in constant need of maintenance and repair to keep the State from backsliding on its high standards of infrastructure reliability. Infrastructure investments are also necessary to support the States transition to a clean energy economy, and will be driven by strategic longer-term needs, including the need to reduce GHG emissions. The key will be to guide infrastructure investment in a manner that is responsive to environmental concerns, consistent with the long-range GHG reduction goal of 80 percent by 2050 (80 by 50), and improves the economic welfare of the States residents and businesses.
In the case of electricity infrastructure, the States delivery systems may be able to take advantage of cost-effective Smart Grid technology to increase system efficiency and prepare the State for the deployment of advanced appliances and electric vehicles. Transmission upgrades may also allow the State to fully exploit the potential benefits of upstate wind, additional Canadian imports and new nuclear capacity, all of which can help meet the multiple policy objectives of the Plan. Electricity infrastructure investments must be developed in light of the need to minimize impacts on host communities, particularly environmental justice communities. In the case of natural gas, enhanced pipeline delivery capacity is needed in the downstate area to maintain reliability while allowing for conversions or repowering of power plants from oil to natural gas and accommodating growing core demand. In the case of transportation, investments can be used strategically to reduce vehicle congestion, expand mass transit and encourage more efficient transportation systems.
This strategy will be furthered by a number of recommendations summarized below. A full discussion is found in Chapter 4.
Develop a Climate Action Plan in accordance with Executive Order 24 to identify strategies, actions and infrastructure needs to reduce GHG emissions by 80 percent by 2050.
Executive Summary xvi Enact a fuel neutral power plant siting law that provides for early and meaningful public participation with ample intervener funding, early identification of environmental justice concerns and a time limit for a decision.
Enact Carbon Capture and Sequestration legislation that will provide a siting process to guide the demonstration of this new and promising technology.
Encourage repowering of existing facilities where justified by reliability, economic and environmental benefits.
Support the upgrade and replacement of aging transmission and distribution infrastructure to maintain electric system reliability.
Identify opportunities to utilize existing rights-of-way for new transmission projects.
Strategy 4: Stimulate Innovation in the Clean Energy Economy The importance of innovation in the energy and transportation sectors is underscored by the challenge posed by climate change, a challenge which will push New York and the nation inexorably toward a low carbon, clean energy future. Fostering innovation in these sectors will also drive economic growth. The Governor addressed this subject in his recent New Economy jobs plan,1 which discussed the need and benefit of economic development focused on increasing the States capacity for innovation.
Policies that encourage innovation at each stage of the clean energy product and business cycle will position the State to not only meet its own energy policy objectives, but to export knowledge and energy technologies to the rest of the world. New technologies for generating, storing, transmitting, and using energy, along with a well-trained workforce to support the design, installation and maintenance of those technologies, will become critical to successful reduction of GHG emissions, in this State and throughout the world.
In the transition to a clean energy economy, it will be critical to provide continued assistance to retain the existing industrial base in New York.
This strategy will be furthered by a number of recommendations summarized below. A full discussion is found in Chapter 5.
Foster collaboration among academia, research and development organizations, national laboratories, and private businesses and industry to accelerate the commercialization of emerging clean energy technologies by New York-based firms.
Foster regional clusters of clean energy businesses and institutions.
Target the States economic development programs to attract clean technology industries.
1 Governor David A. Paterson. Bold Steps to the New Economy: A Jobs Plan for the People of New York. June 2009.
http://www.ny.gov/governor/press/pdf/press_0608091.pdf
Executive Summary xvii Continue providing support through the States low-cost power programs to retain New Yorks commercial and industrial base, and encourage firms to reduce energy use and costs through energy efficiency improvements.
Increase local demand for clean energy technologies through the States clean energy programs.
Expand clean energy job training programs and tailor programs to meet industry needs and create pathways out of poverty; develop a formal means to coordinate all agencies involved in workforce training, from basic skills training to clean energy jobs training.
Strategy 5: Engage Others in Achieving the States Policy Objectives Local governments, and the communities they serve, must play a critical role in the overall effort to meet the States energy policy objectives, as the success of many energy programs depends on sustained commitments by local governments. Energy-conscious local planning and land use policy decisions, particularly zoning ordinances, locally sponsored efficiency initiatives, even locally developed renewables projects, should be some of the building blocks in the States effort to build a clean energy economy. The State has a responsibility to collaborate with and support local governments and local communities in these efforts.
Looking beyond its borders, the States ability to achieve those same policy objectives depends heavily on establishing mutually beneficial working relationships with our neighboring states and nearby Canadian provinces. Significant challenges - and problems - need to be addressed to, among other things, maintain our fuel diversity, maximize the development of renewable resources, minimize future power plant air emissions, and enhance interstate and international power transmission while protecting environmental resources. Offshore siting of a variety of energy supply and storage facilities offers much promise; however, such siting will require multi-state collaboration. In similar fashion, the prospect of securing hydro power from Canada increases the likelihood that we will be able to reduce GHG emissions 80 percent by 2050 in New York State; however, realizing this potential requires sustained negotiations with Quebec and neighboring power systems.
Finally, State success depends on federal policies, regulatory programs and funding. Fortunately, the Obama Administration has advanced policy goals consistent with the States own priorities. However, given the likelihood of federal adoption of policies to limit GHG emissions, the States interests need to be represented in the national debate on policy implementation. Moreover, given the joint jurisdictional issues involved with offshore permitting of major energy facilities, the State must proactively seek to coordinate its review of projects with concerned federal agencies.
This strategy will be furthered by a number of recommendations summarized below. A full discussion is found in Chapter 6.
Amend the City, Town, Village, and General Municipal Laws to incorporate energy considerations in Comprehensive Plans.
Develop Tax Increment Financing reform legislation to encourage the redevelopment of distressed communities and revitalize downtown areas.
Encourage local adoption of Smart Growth policies and strategies, and the adoption of local Climate Action Plans by providing State technical assistance and funding opportunities to local governments.
Executive Summary xviii Encourage development and growth along existing mass transportation routes, i.e., Transit Oriented Development (TOD).
Provide and enhance mechanisms for early, fair and meaningful public involvement with transparency in energy-related decisions.
Develop energy facility siting and permitting criteria that assess disproportionate health risks and environmental impacts on potential environmental justice areas.
Work with multi-state collaborations to advance regional energy initiatives, e.g., Regional Greenhouse Gas Initiative (RGGI), Mid-Atlantic Regional Council on the Ocean (MARCO),
Great Lakes Wind Collaborative.
Partner with the States Congressional Delegation to advance New Yorks clean energy agenda at the federal level.
xix Preface The 2009 State Energy Plan Governor David A. Paterson created the State Energy Planning Board in April 2008 by Executive Order 2 and tasked the Board with preparing a State Energy Plan (Plan or Energy Plan).2 The Executive Order requires a 10-year planning horizon and specifies issues and analyses that must be included in the Plan.
These requirements have been met through the development of nine policy Issue Briefs which address:
Siting New Energy Infrastructure; Energy Infrastructure; Environmental Impact and Regulation of Energy Systems; Environmental Justice; Energy Costs and Economic Development; Transportation; Climate Change; Regional Collaboration; and Health, Energy Production and Energy Use. The Executive Order also requires assessments of the States energy resources and efficiency markets, including: Energy Efficiency; Renewable Energy; Electricity; Natural Gas; Petroleum; and Coal. Energy demand and price forecasts have also been prepared over the 2009-2018 planning horizon and are reported in the Plan.
These Issue Briefs and Assessments offer more detailed discussions of issues addressed in this Plan and serve as the basis for the findings and recommendations.
In accordance with the Executive Order, the Plan analyzes a broad range of matters related to the States energy systems, including the reliability of delivery networks for electricity, natural gas and petroleum products and the interrelated effects of energy production and use on the States economy, environment and transportation system. The Plan also addresses the impact of energy production and use on public health, particularly for the States most vulnerable populations.
The Plan provides the Governors vision for a robust and innovative clean energy economy that will stimulate investment, create jobs, protect public health and the environment and meet the energy needs of businesses and residents over the planning horizon. To that end, the Plan:
provides the framework within which the State will reliably meet its future energy needs, in a cost-effective and environmentally conscious manner over the planning period; and establishes broad policy objectives to guide State agencies and authorities as they deal with energy-related issues and sets out strategies and programmatic and policy recommendations consistent with these objectives.
Leading up to these strategies and recommendations, the Plan:
highlights areas of New Yorks energy sector and transportation systems that are in need of additional public and private investment; reviews existing energy and energy-related economic development, environmental, public health, and transportation programs administered by the States agencies and authorities and utilities; and 2 Executive Order 2. 2008. http://www.ny.gov/governor/executive_orders/exeorders/eo_2.html
Preface xx provides in-depth information about the States energy and transportation systems, as well as the effects of these sectors on the environment and public health.
Planning Process The Energy Planning Board (Board) established the Energy Coordinating Working Group (ECWG),
comprised of staff members from planning agencies and the New York Power Authority (NYPA) and Long Island Power Authority (LIPA), to assist in the planning process, provide the analyses necessary to develop the Plans findings and recommendations, and prepare the draft and final Plans. The ECWG issued a Draft Scope for the Plan on May 30, 2008 identifying the issues to be addressed, and the schedule and process by which the Plan would be prepared. This followed more than 70 stakeholder meetings held throughout the State soliciting input and comment on developing a Work Scope. The ECWG also received written comments on the draft Scope from over 65 stakeholders. The public input and comments proved useful in preparing the final Work Scope. The Website, www.nysenergyplan.com, was created by the Board to facilitate communications with stakeholders.
The Board has held four public meetings since May 2008. The meetings were webcast and archival videos of the meetings are available at www.nysenergyplan.com. At its December 11, 2008 meeting, the Board modified the Executive Orders schedule for completing the Plan. The modified schedule included the publication of an Interim Report from the ECWG to the Energy Planning Board on March 31, 2009, with the draft Plan being released in August 2009 and the final Plan released by the end of 2009.
The Interim Report was released in accordance with the modified schedule in March 2009 and 45 sets of written comments were received in response to it. The Board met to hear a summary of recurring themes from those comments on June 19, 2009, and at that meeting authorized the continued preparation and release of the draft Plan in August 2009.
Following the release of the draft Plan in August 2009, nine public hearings were held throughout August and September 2009 to receive comments on the draft Plan. Written comments were also accepted via the Energy Planning Board Website (www.nysenergyplan.com), and both oral and written comments were taken into consideration as this final Plan was developed.
In September 2009, Governor Paterson signed legislation that statutorily establishes the State Energy Planning Board and calls on that Board to complete an energy plan on or before March 15, 2013.3 That Board is also directed to adopt new plans at least every four years thereafter and provide biennial reports on the plans implementation. As such, the State Energy Planning Board that was created by Executive Order 2 shall exist until such time as the statutorily created State Energy Planning Board begins its planning process in preparation for the 2013 energy plan.
The State agencies and authorities that are members of the State Energy Planning Board each have defined missions that are meant to support the public interest. Because energy decisions made by these agencies and authorities can have a wide range of impacts on the economy, environment, public safety, public health, energy supply and cost, mobility and the quality and reliability of services, it is critical to ensure that such decisions are not made in a vacuum. Through their cooperation in completing the Plan, the planning agencies and authorities have developed strategies that meet multiple objectives simultaneously. Individual Board members may disagree with one or more of the Plans recommendations, but the suite of strategies and recommendations found within this Plan are supported 3 Chapter 433 of the Laws of 2009.
Preface xxi by the majority of the State Energy Planning Board, and per Executive Order 2, are meant to guide all State agency actions over the planning horizon unless otherwise restricted by law.
System Modeling The Plan and its supporting Issue Briefs and Assessments required substantial energy system modeling and related quantitative analysis. The electricity and natural gas systems modeling provided the analytical underpinnings of many of the Plans findings and recommendations. The modeling offered a basis for understanding how the systems work and interrelate, identifying where investment and infrastructure support are needed, and understanding how system needs and characteristics may change depending on various assumed future scenarios.
The electricity and natural gas system modeling has been a collaborative effort of the planning agency staff, in particular New York State Energy Research and Development Authority (NYSERDA),
Department of Public Service (DPS) and Department of Environmental Conservation (DEC). In addition, LIPA and NYPA have taken an active role in helping design and assess model scenarios and simulations.
The New York Independent System Operator (NYISO) has been generous in its support of the modeling efforts and has assisted the planning agency staff in data collection, modeling and analysis.
The electricity system modeling solves for the optimal system dispatch (including imports and exports),
new capacity, retirements, and repowering, given the specified demand, system characteristics, reserve margins, and environmental constraints. Two Reference cases were developed for the electricity modeling, which differ only in the electricity demand forecasts used as model input, for use as points of comparison for alternative policy directions. The Starting Point case is based on the electricity demand forecast used by the NYISO in its 2009 Reliability Needs Assessment (RNA). From 2009 to 2018, electricity demand under this case is assumed to increase at an average rate of 0.8 percent per year, or a total increase of 7.3 percent. The NYISO used moderately risk-averse assumptions which were widely vetted among market participants and considered to be appropriate for its baseline analysis of system reliability. The RNA forecast assumes that approximately 27 percent of the 15 by 15 policy goal is achieved through the Energy Efficiency Portfolio Standard (EEPS) (based on the level of authorized funding at the time the forecast was developed). The SEP Policy Reference case is also based on the electricity demand forecast developed by the NYISO, but assumes full achievement of the 15 by 15 policy goal; that is, electricity demand is assumed to be reduced by 2015 to a level that is 15 percent lower than the forecasted level without the policy goal. From 2009 to 2018, electricity demand under the SEP Policy Reference case is assumed to decrease by 1.8 percent.
The natural gas system modeling is designed to evaluate both the adequacy of natural gas supply and the ability of the natural gas pipeline system to provide the quantities of gas at the locations and times required by the electricity system, while simultaneously meeting the needs of residential, commercial and industrial customers. The natural gas system Reference case is built off the Starting Point electricity modeling reference case to provide a conservative evaluation of the natural gas system. The natural gas system modeling evaluates the adequacy of the gas supply system on an aggregated annual basis as well as on individual peak days (generally occurring in winter) when the greatest volumes of gas are required.
The scope of the modeling also includes four sensitivity scenarios, each of which assumed demand for natural gas to be significantly higher than the natural gas Reference Case due to increased needs in the electricity generation sector.
Preface xxii Organization The Plan consists of this document and the sixteen supporting Issue Briefs and Assessments. These supporting documents are available on the Energy Planning Board Website at www.nysenergyplan.com.
This Volume contains seven Chapters and an Appendix. Chapter 1 identifies the fundamental policy objectives against which potential strategies were evaluated for consistency and effectiveness. Chapter 1 also describes the five key strategies that emerged as those the State will pursue to achieve its policy objectives. Chapters 2 through 6 address, in detail, each of the five strategies and related recommendations, as well as the underlying issues that must be addressed for the State to achieve its policy objectives over the planning period. Chapter 7 contains the implementation plan that will be pursued during the planning period to follow through on the Plans recommendations.
1 1 New Yorks Energy Policy An energy plan by nature focuses on reliably meeting projected future energy demands, while balancing and advancing other public policy objectives. But no credible plan can be developed in a vacuum and over the past two years, the State confronted a number of facts on the ground which by necessity informed the planning process. These facts include:
The State is in an economic recession and has lost over 200,000 jobs since August 2008, bringing New Yorks unemployment rate to a 17-year high.
Many New Yorkers have experienced hardships caused by the extreme volatility in the prices of energy.
At the national level, the federal government is catching up to New York and other states in recognizing the extraordinary challenges posed by climate change and the urgent need to reduce GHG emissions.
There is greater interest at the federal level in improving the countrys energy security, particularly through development and deployment of clean energy producing technologies.
Finally, 85 percent of New Yorks population (based on 2000 U.S. Census data) lives in areas of the State that have not been designated as in attainment of one or more of the national health-based air quality standards.
Clearly defined objectives emerge from these considerations. Section 1.1 identifies these objectives and explains what they mean and why they are important to the State. Strategies for achieving these objectives are formed based on the modeling analyses and findings of the Issue Briefs and Assessments.
Section 1.2 introduces the Plans strategies and describes how they are meant to achieve and balance the States multiple objectives. Chapters 2 through 6 go into additional detail on each of the strategies and discuss what the State has been doing in these areas, what challenges or barriers currently exist, and finally the recommendations that are intended to overcome those barriers. Chapter 7 contains the implementation plan for the recommendations.
1.1 Planning Objectives The Plan supports development of a clean energy economy - one that uses energy efficiently, is increasingly powered by low carbon energy resources with lower environmental and health risks, relies increasingly on modern infrastructure, fosters technology innovation, creates and sustains jobs, encourages smart transportation alternatives and adopts community planning strategies. Investing in the States clean energy economy and taking immediate steps to mitigate the effects of climate change will drive future policy decisions and will continue to position New York as a leader nationally and globally.
As such, actions to implement the States clean energy economy goals, such as the need for new infrastructure development, may be driven by other longer term objectives that are not normally considered in energy system planning.
New Yorks Energy Policy 2
Given traditional and current policy drivers, the Energy Plan is guided by the following key objectives:
Maintain Reliability: Assure that New York has reliable energy and transportation systems.
Reduce GHG Emissions: Support energy and transportation systems that enable the State to significantly reduce GHG emissions, both to do the States part in responding to the dangers posed by climate change and to position the State to compete in a national and global carbon-constrained economy.
Stabilize Energy Costs and Improve Economic Competitiveness: Address affordability concerns of residents and businesses caused by rising energy bills, and improve the States economic competitiveness.
Reduce Public Health and Environmental Risks: Reduce health and environmental risks associated with the production and use of energy across all sectors.
Improve Energy Independence: Improve the States energy independence and diversity by developing in-state supplies of clean energy.
1.1.1 Maintain Reliability New Yorks businesses and residents depend on reliable energy and transportation systems. For all energy systems, reliability is contingent on adequate supplies of fuel, as well as a robust delivery infrastructure. Investments made in these systems help ensure that the systems remain resilient, flexible and adaptable to accommodate new technologies. The ability to construct new, and maintain existing delivery infrastructure, is key to maintaining reliability. Uncertainty with regard to infrastructure siting and interconnection, cost recovery and jurisdictional issues all discourage needed infrastructure development and increase costs for New Yorks citizens.
Electric system reliability is strengthened by a diversified fuel supply for generation. Figure 1 shows the States annual generation mix in 2008, consisting primarily of nuclear power, natural gas, hydropower, coal, oil, and imports. Adding to the States renewable mix can provide further diversity. Reliability is strengthened by regular upgrades to delivery infrastructure. In addition, there is a continuing need for comprehensive and effective reliability standards for the operation of the States bulk power system, developed by the New York State Reliability Council and implemented by the NYISO.
Reliability of supply for heating fuels is crucial during the coldest winter months. The petroleum industry maintains inventories of various heating fuels such as home heating oil, propane and kerosene fuel at levels based on historic normal demand trends and market expectations. Weather conditions, economic events or disruptions in the supply chain can adversely affect the ability of the industry to meet demand during critical times. Petroleum products, while a small portion of the electric system power supply mix, are also essential for maintaining the reliability of the electric power system. Oil is used as a backup fuel for large power plants during periods of high natural gas demand or for price arbitrage; residual oil is used during periods of high natural gas demand in the winter months and distillate oil is used during the summer peak period.
New Yorks Energy Policy 3
Figure 1. New York's Electricity Generation Mix Today, the movement of people and goods depends on a secure and reliable infrastructure and flow of liquid petroleum products, such as motor gasoline, highway diesel fuel and ethanol. Nationwide, the petroleum supply industry maintains adequate inventories to cover eight weeks of normal demand. An extended supply disruption would likely impose significant economic costs to businesses and residents, as was the case in 2005 when hurricanes Rita and Katrina made landfall near the U.S. Gulf Coast refining center, resulting in the closure of almost 30 percent of U.S. refining capacity.
1.1.2 Reduce Greenhouse Gas Emissions There is scientific consensus that the increase in GHG concentrations in the atmosphere is driving changes in the Earths climate. The combustion of fossil fuels transforms organic carbon into CO2, a heat-trapping GHG. Released into the atmosphere, CO2 retains heat, which alters the Earths energy balance, warms the planet and changes its climate. The science is sufficient to predict that continued, unabated combustion of fossil fuels will contribute to dramatic changes in our climate. Climate change threatens human societies and natural biodiversity because it is expected to significantly alter the ecosystems that supported the development of human civilization.
In New York, average temperatures are rising. Spring bloom occurs a week earlier on average than 30 years ago, and there is an observable northward shift both of plant hardiness zones and of the occurrence of certain wildlife and plant species. While future climate change may marginally help a few areas of New Yorks economy, such as increasing yields and crop variety in certain types of agriculture and decreasing winter heating needs, it will impose significant economic burdens. For instance, its global impacts on agriculture as a whole are likely to increase consumer food costs. Health care and public health expenditures will increase if warmer temperatures increase the incidence of heat-related illness and mortality and vector-borne disease. Protecting or replacing existing communities and infrastructure as the sea level rises will be costly. In an increasingly interconnected world, New Yorks economy may also be Natural Gas Only 11%
Oil Only
<1%
Natural Gas (dual fuel) 17% (est.)
Coal 11%
Imports 13%
Hydro 17%
Nuclear 26%
Other 3%
2008 New York State Electricity Generation by Fuel Type (1) Sources: Primary source is the NYISO 2009 Load and Capacity Data report. Dual fuel proportions are estimated using data from the EIA-906, 920, and 923 Databases.
(2) "Other" includes primarily wood, wind, waste and methane.
Total Generation Required:
167,613 GWh Total Generation Required:
165,613 GWh Oil (dual fuel) 2% (est.)
New Yorks Energy Policy 4
burdened by climate change impacts that destabilize ecosystems, agriculture and economies outside of New Yorks borders.
Scientific evidence suggests that limiting the global average temperature increase to approximately 3.6°F (2°C) above pre-industrial temperatures may minimize the likelihood of the most severe climate impacts and is consistent with the United Nations Framework Convention on Climate Change (UNFCCC) goal of avoiding dangerous climate change. To keep warming within these limits, the UNFCCC concludes that emissions of GHGs from developed nations must be reduced by 80 to 95 percent from year 1990 levels by the year 2050. Recognizing this need, Governor Paterson issued Executive Order 24 that sets a State goal to reduce GHG emissions in New York 80 percent below 1990 levels by the year 2050. The Executive Order also establishes a Climate Action Council that is charged with preparing a draft Climate Action Plan by September 30, 2010. The Climate Action Plan will identify possible strategies for meeting the 80 by 50 goal.
With nearly all of New Yorks CO2 emitted in the generation and use of energy, the relationship between climate change and energy planning is inescapable. A central challenge for New York is enabling a transition to an energy system with very low GHG emissions in time to do the States part to prevent the most severe impacts of climate change, while maintaining the States reliable energy systems, meeting other environmental goals and increasing the States economic competitiveness.
1.1.3 Stabilize Energy Costs and Improve Economic Competitiveness Energy expenses are driven by price and use. Consumers generally have little control over energy prices, which vary throughout the State and are influenced by, among other factors, world markets, the availability of fuels, electric generation resources, electric and gas transmission and distribution facilities, transportation infrastructure, and regulatory requirements. In contrast, consumers have greater control over their energy use, which is governed by their energy and transportation choices, including technology, efficiency practices and building efficiency. Although consumers may be unable to control the price they pay for energy, through control of their energy usage, consumers may ultimately affect their energy expenses.
Energy costs affect consumers energy bills and what they pay for goods and services. High energy costs can have a negative impact on household budgets, particularly for families on a limited income who pay a higher proportion of their household income for energy. The State and federal government offer a number of programs to help consumers lower their energy bills, ranging from direct bill assistance through the Low Income Home Energy Assistance Program (LIHEAP) to targeted energy efficiency programs.
Energy costs also can have a significant impact on the economic competitiveness of the State, especially for energy intensive businesses currently located within the State and those considering an expansion or looking to locate in New York. New Yorks relatively high energy prices are attributable to the States heavy reliance on fossil fuels from out of State, relatively low dependence on coal (which is currently a less expensive fuel), electricity system constraints, natural gas and petroleum product transmission and pipeline system constraints, the States geographic location away from major supplies of energy, and State and local taxes and fees. In order to address these high costs and stimulate economic development, several State agencies and authorities offer a myriad of economic development and energy assistance programs - described in the Energy Costs and Economic Development Issue Brief - to reduce energy use and energy bills to enhance the economic competitiveness of the State.
New Yorks Energy Policy 5
1.1.4 Reduce Public Health and Environmental Risks Combustion of carbon-based fuels, whether for electricity generation, transportation or heating, results in the emission of contaminants such as nitrogen oxides (NOx), sulfur dioxide (SO2), particulate matter, carbon monoxide, polycyclic aromatic hydrocarbons, volatile organic compounds and metals, as well as several GHGs including CO2. These individual contaminants are associated with a number of adverse health effects, including cardiovascular disease, respiratory effects, infections, asthma exacerbation, cancer, central nervous system effects, liver effects, kidney effects, and mortality. The likelihood of health effects depends on multiple factors, including the amount, frequency, and duration of exposure, the toxicity of the contaminant, and an individuals health status. Emissions of acid deposition precursors (NOX and SO2) from sources in New York and upwind continue to degrade the States forests and water bodies and impair visibility. The severity of these impacts is dependent upon a number of factors; however, in general, a decrease in emissions of contaminants will reduce the likelihood of negative health and environmental impacts. This can be accomplished through a shift to cleaner carbon-based fuels (e.g.,
natural gas and low sulfur diesel) or non-carbon-based energy sources across all energy sectors.
Environmental justice is the assurance of fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies. Through Governor Patersons Environmental Justice Interagency Task Force, and other policies, the State has efforts underway that focus on improving both the human and physical environment, with an emphasis on low income communities and communities of color.4 These efforts also work on addressing disproportionate health and environmental burdens that may exist in those communities. Continued study of the areas with disproportionately high rates of poverty, unemployment, traffic, and power generation and industrial facilities is important in helping to unburden communities with high rates of health problems, such as asthma incidences and lead poisoning.
1.1.5 Improve Energy Independence New York spends approximately $65 billion annually on energy, of which 53 percent or close to $35 billion leaves the State to pay for energy imports. This reliance on outside sources of energy creates economic opportunities in exporting regions at the expense of New York. It also reduces New Yorks control over energy supply disruptions caused by market forces or infrastructure issues outside the State.
By investing in measures that reduce energy use and supporting in-state energy resource development, New York will reduce the outflow of dollars to pay for energy imports. This will help to stimulate the economy and create local jobs.
Most of the in-state energy available to New York is from low carbon natural gas and biomass or carbon-free renewable sources, such as wind, hydropower, and solar, that, if developed, will help to achieve climate and public health improvements while increasing energy security.
4 Department of Environmental Conservation (DEC). Environmental Justice Interagency Task Force. 2009.
http://www.dec.ny.gov/public/47153.html
New Yorks Energy Policy 6
1.2 Clean Energy Strategies The energy strategies that will simultaneously achieve New Yorks multiple objectives are:
- 1. Produce, deliver and use all forms of energy more efficiently in the electricity, transportation and buildings sectors.
- 2. Support development of in-state energy supplies, including clean renewables such as wind, solar, geothermal, bioenergy, hydropower, and hydrokinetic capacity (tides, currents, and waves), as well as natural gas.
- 3. Invest in energy and transportation infrastructure to support the States multiple objectives.
- 4. Stimulate innovation in the clean energy economy through research and development partnerships with academia and public and private partners, by creating demand for clean energy products and training the workforce, and by supporting existing and attracting new industries that will compete in a clean energy economy.
- 5. Engage others in achieving the States policy objectives and bolster stakeholder participation in energy-related decision making.
In summary, the State plans to meet its energy needs through balanced and deliberate investment in energy efficiency in all its forms, greater use of in-state resources, and expansion of the States energy systems and infrastructure. Recommendations for specific programs, regulatory or legislative actions to support these strategies are found in Chapters 2 through 6 and an implementation plan for those recommendations is found in Chapter 7.
The 45 by 15 Clean Energy Policy, announced by Governor Paterson in his 2009 State of the State Address, provides the foundation for implementing the five energy strategies. The 45 by 15 policy challenges the State to meet 45 percent of its electricity needs by 2015 through increased energy efficiency and renewable energy.5 As illustrated in Figure 2, the 45 by 15 Clean Energy Policy proposes to reduce electricity end-use in 2015 by 15 percent below forecasted levels, while simultaneously meeting 30 percent of the States electricity supply needs through renewable resources.
Achievement of these policy goals will require, by 2015, the reduction of nearly 27 million Megawatt Hours (MWh) through energy efficiency programs and the addition of over 14 million MWh of renewable resources.6 5 Governor David A. Paterson. Our Time to Lead: State of the State Address. 2009.
http://www.state.ny.us/governor/keydocs/speech_0107091.html 6 PSC. Case 03-E-0188, Proceeding on Motion of the Commission Regarding a Retail Renewable Portfolio Standard, Order Regarding Retail Renewable Portfolio Standard, September 24, 2004.
New Yorks Energy Policy 7
Figure 2. Impact of 45 by 15 Clean Energy Policy in 2015 1.2.1 Produce, Deliver, and Use Energy More Efficiently Investing in end-use energy efficiency is the most economical approach to expanding the States clean energy economy. In the short-run, investments in energy efficiency reduce energy use and bills for participating customers. In the long-run, a significant reduction in electricity demand has been shown to put downward pressure on wholesale electricity prices, reduce price volatility, and reduce emissions of CO2 and other air pollutants; energy efficiency investments have also been shown to increase employment opportunities in the State.7 Additionally, promoting energy efficiency in low income communities, and making energy efficiency upgrades to affordable housing, can reduce energy-related economic burdens on low income New Yorkers.8 End-use energy efficiency is an important part of Governor Patersons goal for the State to meet 45 percent of its electricity needs through improved energy efficiency and clean renewable energy by 2015 (45 by 15). The efficiency portion of that goal is 15 of the total 45 percent (also known as 15 by 15) and the State has a number of programs that are designed to work toward that goal and help New Yorkers 7 See the Energy Efficiency Assessment for a more detailed discussion on the impacts of energy efficiency programs.
8 Energy expenditures as a proportion of total household expenditures decrease as income increases. U.S. Bureau of Labor Statistics. Household Spending on Energy. Monthly Labor Review, Vol. 129 No. 6. 2006.
http://www.bls.gov/opub/mlr/2006/06/precis.htm
New Yorks Energy Policy 8
invest in energy efficiency measures.9 Modeling analyses have shown that full achievement of 15 by 15 in the SEP Policy Reference case results in decreasing average wholesale electricity prices by 10 percent over the planning horizon, when compared to the Starting Point case.
In New York, electric efficiency can be improved enough to offset near-term projected increases in electric demand, reducing the need for additional generating capacity for reliability needs, and saving money for ratepayers. Postponing demand for the construction of new fossil-fuel fired generation would allow time to further advance the low-carbon-intensity electric generation technology necessary to reduce GHG emissions for the long-term.
In addition, increasing the efficiency of electric generation, reducing line losses associated with transmission and distribution and optimizing the operation of the electric system, can also lower electric costs, reduce emissions and defer the need to build expensive new facilities.
Energy use in the transportation system can be made more energy efficient through improvements in vehicles, the fuels that power them and through management of and investment in the transportation system to make it more efficient. The transportation, energy and emissions relationship is often described as a three legged stool, where vehicle technology is one leg, the fuels used to power vehicles is the second leg of the stool, and transportation system activity is the third leg. Transportation system activity includes VMT, congestion and system operational efficiencies. To increase the energy efficiency of the system and to reduce its carbon footprint, all three legs of the stool must be addressed. Discussion on the importance of the three-legged stool approach and strategies to address each of the legs can be found in the Transportation Issue Brief.
1.2.2 Support Development of In-State Energy Supplies Developing in-state energy supplies, in particular renewable energy resources and natural gas, helps to reduce the reliance on higher carbon content fossil fuels imported from outside the State and therefore improves the States energy security. Reducing energy imports also helps to keep more money within the State for economic development purposes. Supporting in-state resources creates jobs, increases capital investment, increases tax revenues for local governments, and increases revenue for landowners.
Use of renewable in-state resources reduces the need for energy derived from fossil fuel. Less electricity generation from fossil fuel-fired generators results in lower emissions of air pollutants from those plants.
This reduces the known health risks associated with carbon-intensive electricity generation and improves the States ability to mitigate the effects of climate change. Likewise, development of in-state resources for the production of alternative transportation fuels provides the opportunity to reduce the high carbon-intensity fuels that are currently used in the transportation sector. Using renewable technologies, such as solar thermal (including passive solar) and geothermal, for heating and hot water provides similar benefits. Renewable energy, particularly solar power, may improve the reliability of the local power supply system during peak demand periods. For example, since cooling load peaks during summer days 9 The renewable portion of the 45 by 15 goal accounts for the remaining 30 of the 45 percent, and is a call to raise the States Renewable Portfolio Standard to meet 30 percent of the States electricity use with renewable energy generation by 2015.
New Yorks Energy Policy 9
when sunlight is plentiful, distributed solar power generation may reduce the risk of localized power disruptions.10,11 Biomass is a dispatchable energy source that may be used to fuel power plants whenever additional electricity is required. While these multiple benefits help justify the States investment in renewable energy deployment programs, many of which are funded via the Renewable Portfolio Standard (RPS) surcharge on ratepayer utility bills, there are also direct ratepayer benefits.
Demand for natural gas is expected to increase over the planning horizon. Currently, New York meets less than five percent of its gas demand with in-state production. The majority of the gas to meet the States remaining demand is produced in Canada and the Gulf of Mexico and is delivered via pipeline to New York. Increasing in-state production of natural gas will diversify the States natural gas supply, improving the States energy security.
1.2.3 Invest in Energy and Transportation Infrastructure Investments in existing energy and transportation infrastructure and development of new infrastructure, as appropriate, can help to further the Plan objectives of maintaining system reliability, achieving GHG emission reductions, and controlling energy costs. Smaller periodic improvements or state of good repair investments prevent the need for larger, more extensive repairs and investments in the future and are essential to maintaining the reliability of the States energy production and delivery systems for all fuels.
Transmission, distribution and end-user Smart Grid investments will optimize the electric system in order to facilitate the interconnection of renewable resources, reduce customer costs through reductions in line losses, and enable customers to use less electricity during periods of high demand and reduce their energy costs. Transmission Smart Grid investments in particular will facilitate the development of renewable generation in the areas of the State that have the greatest capability to transmit it to the areas of highest demand. These investments will also reduce the clustering of generation facilities in densely populated areas and potential environmental justice areas that may already be burdened with greater numbers of facilities and with greater disease prevalence.12 Expanding mass transit options, in combination with using cleaner-burning fuels for cars and buses, linking land use with transportation planning, and keeping roadways and the transportation system in good working order, will lessen traffic congestion, reduce energy use, and also contribute to better air quality and public health.
1.2.4 Stimulate Innovation in the Clean Energy Economy Policies that encourage innovation at each stage of the clean energy product and business cycle - from research, development, entrepreneurship, through value-added manufacturing, deployment and maintenance of clean energy technologies - will position the State to not only meet its own energy policy 10 Perez, R., Satellite-Based Solar Resource Assessment: Social, Economic and Cultural Challenges and Barriers, Technological Gaps. 2004. http://www.asrc.cestm.albany.edu/perez/publications/Solar%20Resource%20Assessment %20and
%20Modeling/Papers %20on%20Resource %20Assessment %20and %20Satellites/satellite-based %20solar
%20resource%20assessment-04.pdf 11 Perez, R. and B. Collins, Solar Energy Security: Could Dispersed PV Generation Have Made A Difference In The Massive North American Blackout? Refocus 5(4). 2004. http://www.sciencedirect.com 12 DEC currently classifies potential environmental justice areas based on location of low income and minority populations.
Potential environmental justice areas are U.S. Census blocks (200 to 500 households) that, in the 2000 U.S. Census, met one or more of the following criteria: 51.1 percent or more of the population in an urban area reported themselves as members of minority groups; 33.8 percent or more of the population in a rural area reported themselves as members of minority groups; or 23.59 percent or more of the population in an urban or rural area had incomes below the federal poverty level.
New Yorks Energy Policy 10 objectives, but to export knowledge and energy technologies to the rest of the world. New technologies for generating, storing, transmitting and using energy, along with a well-trained workforce to support the design, installation, and maintenance of those technologies, are critical to successful reduction of GHG emissions, and will become more valuable as the changing climate increases pressure to transform energy systems worldwide.
As described more fully in Chapter 5, the State is supporting energy research and development, innovation, and commercialization of clean energy technologies through existing partnerships funded by NYSERDA and the New York State Foundation for Science, Technology and Innovation (NYSTAR).
The State is also focusing on building a workforce development system that will prepare the New York labor force for the clean energy economy. Realization of the States clean energy goals will require a workforce with the appropriate knowledge and skills to develop and deploy the technologies that will reduce the States energy use and its dependence on fossil fuels, along with energy-related impacts on public health and the environment.
As the State, nation and world transition to a carbon-constrained economy, it will be critical to use economic development resources to both retain the States existing manufacturing base and attract new companies that are most likely to thrive in a clean energy economy.
1.2.5 Engage Others in Achieving the States Policy Objectives The opportunity exists for greater collaboration among all units of government and other stakeholders to advance nearly all aspects of the Plan. Absent greater collaboration, the State risks frustrating efforts that are driven by the Plans policy objectives.
Local government and community decisions play a significant role in the States ability to meet the objectives of the Plan and partnerships with these entities are critical to the success of the States clean energy strategies. For example, local zoning can help or hinder the siting of small renewable resources; land use planning can either encourage sprawl or promote smart growth; local municipalities can work to either increase or reduce disproportionate burdens in urban and environmental justice communities; local governments can either passively or aggressively enforce the States Energy Conservation Construction Code.
Not surprisingly, neighboring states and provinces face similar regional energy concerns and challenges, some of which are best met through regional collaboration. New Yorks energy systems are inextricably linked, physically, economically and environmentally with its neighboring states and Canada. By acting jointly with the States neighbors, the State will be able to more readily achieve many of its objectives.
11 2 Produce, Deliver, and Use Energy More Efficiently New York has been among the nations leaders in implementing market-based programs to help ensure that energy efficiency is recognized as a cost-effective alternative to additional supply-side energy resources. Energy efficiency also reduces energy bills, making New York businesses more competitive and allowing families to save money; helps the State achieve its environmental goals by reducing emissions of GHG and other pollutants affecting public health; enhances quality of life by increasing comfort, safety and productivity; creates jobs; and increases energy security by reducing exposure to supply disruptions and price volatility associated with reliance on imported fossil fuels. Beyond implementing improved technologies that use less energy, the term energy efficiency also encompasses strategic conservation of energy, which simply means modifying lifestyles and changing the way existing equipment is used in ways that use less energy (e.g., turning down winter thermostats, reducing use of air conditioning, carpooling, etc.).
Although the past three decades have been characterized by growing population and greater demands for energy-dependent technologies, energy use per capita in New York has remained relatively flat - about one-third lower than the national average. New York is the second most energy efficient state in the nation on a per capita basis. New Yorks relatively low energy use per capita is due in part to its past investments in energy efficiency programs, its highly energy-efficient urban transportation system, and its concentration of multi-family housing. As discussed below, the State can become significantly more energy efficient by building on its past successes.
This Chapter focuses primarily on improving efficiency at the point of end-use for all forms of energy and for all energy consuming sectors of the economy. In addition, with respect to electricity, this Chapter highlights the increased efficiencies that can be achieved upstream, along the entire process path of generation, transmission and distribution. Overall, by producing, delivering, and using energy more efficiently, the amount of energy required to enjoy the same quality of life can be minimized.
2.1 End-Use Efficiency 2.1.1 The History of State Support New York has a decades-long history of supporting efficiency improvements. Annual funding committed to efficiency programs by New Yorks utilities and energy authorities began with a modest $25 million in 1984 and has risen to over $750 million for 2009. From the mid-1990s through 2008, most State support has been channeled through NYSERDA, NYPA, LIPA and the Division of Housing and Community Renewal (DHCR). Beyond reducing the amount of energy used by customers who install energy efficiency measures, New Yorks energy efficiency programs are designed to transform markets by changing the products, services, and delivery mechanisms available for improved efficiency and changing consumer behavior. Programs directed at upstream market participants - including distributors, contractors, trade associations, and manufacturers - seek to induce structural changes in the marketplace that will result in accelerated adoption of energy efficient technologies and practices. Programs are
Produce, Deliver, and Use Energy More Efficiently 12 designed to promote permanent changes, including in consumer behavior, that result in the availability and adoption of innovative energy efficiency products and services.
Programs administered by NYSERDA have achieved more than 3,000 Gigawatt Hours (GWh) in annual electricity reductions;13 NYPA and LIPA have contributed nearly 2,000 GWh in annual electricity reductions. These energy reductions have saved consumers billions of dollars in electricity and fuel costs.
Other State agencies also administer successful energy efficiency programs, including DHCR, which has administered the States federally funded weatherization program since 1977. During that time it has overseen installation of insulation and other efficiency improvements in 500,000 low income homes -
resulting in substantial savings of all fuels. Additionally, the Dormitory Authority of the State of New York (DASNY) and the Office of General Services (OGS) have committed to green building standards for all new construction they manage.
The States efficiency programs produce other economic benefits. Expenditures and annual savings produced by energy efficiency programs set off a ripple effect of spending that influences many sectors of New Yorks economy. Energy efficiency programs have already provided and will continue to provide net macroeconomic benefits to New York in the form of increased employment, labor income, and Gross State Output. A more detailed discussion of these benefits can be found in the Energy Efficiency Assessment.
2.1.2 Potential for Additional Efficiency Savings The State can realize additional cost-effective energy efficiency potential that would provide substantial benefits to both suppliers and consumers. Governor Patersons reaffirmation of the States 15 by 15 goal to reduce electricity use 15 percent below 2015 forecast levels has provided the major impetus for the States electricity efficiency initiatives. Similar potential exists for other energy sources as well.
A 2008 report concluded that opportunities for electricity end-use efficiency are extensive and inexpensive compared with available supply options.14 Results of the study estimate the States achievable potential through 2015 to be about 26,000 GWh, representing a reduction of approximately 14 percent from the forecast of electricity demand in 2015.15,16 In addition, improved building codes and appliance standards, likely to be implemented prior to 2015, could provide a reduction of an additional 11,000 GWh (5.7 percent) from forecasted electricity use.17 Programs that would capture this achievable potential would cost $7.2 billion in 2008 dollars over seven years, or an approximate average annual program portfolio budget of $1.0 billion. Net benefits to the New York economy would total $12.8 billion, including $20.8 billion in total statewide benefits and $8.0 billion in societal costs. The benefit-13 NYSERDA. New York Energy $martSM Program Evaluation and Status Report: Year ending December 31, 2008. 2009.
14 Optimal Energy, Inc., Achievable Electric Energy Efficiency Potential in New York State. 2008.
15 All savings and forecast energy values in the 2008 Optimal Study are at the point of purchase as opposed to at meter.
Point of purchase savings correspond to avoided costs at the entrance to the utility service territories and include savings in transmission line losses. Customer meter level savings also reflect a reduction in distribution level losses commensurate with reduced system deliveries.
16 The 2008 Optimal Study relies on adjusted 2015 zonal load forecasts provided by the NYISO which were adjusted to reflect a baseline that does not include impacts from future ratepayer-funded efficiency programs, but does assume naturally occurring efficiency gains in the market and recently passed or highly likely codes and standards.
17 This reflects changes to residential and commercial building codes, as well as federal appliance and equipment standards that have either already passed (but not yet taken effect), or are considered highly likely to take effect during the next 10 years.
Produce, Deliver, and Use Energy More Efficiently 13 cost ratio of the electric efficiency measures is estimated to be 2.60, which means that the New York economy would capture approximately $2.60 in benefits for every dollar invested in efficiency.18 Similarly, there is significant potential to reduce demand for natural gas through energy efficiency improvements. A 2006 study estimated the program potential, with five years of program delivery and five years of post market effects, would be 1.5 percent of projected natural gas consumption. This potential reduction could occur through several approaches, such as increasing efficiencies of domestic heating equipment, promoting ENERGY STAR home construction, promoting low income weatherization, and providing incentives for installation of energy-efficient food service and food processing equipment.19 In 2008, a limited update of the 2006 study showed that spending $80 million per year for 10 years would result in savings on the order of 28,000 MDth (thousand Dekatherms) or 15 percent of the likely achievable potential at the end of the10years. Estimated savings by sector were 6,697 MDth in the residential sector, 1,520 MDth in the low income weatherization area, and 19,979 MDth in the commercial and industrial areas.
A significant level of efficiency potential likely exists with regard to No. 2 oil, i.e., home heating oil, or distillate fuel. The most important fact to consider is the magnitude of the States consumption of No. 2 oil. Approximately one-third of New York households (an estimated 2.3 million households) use fuel oil to heat their homes. Based on federal 2007 estimates, New Yorks residential and commercial sectors consume more distillate fuel than these sectors in any other state, accounting for 24 percent and 22 percent of national residential and commercial consumption, respectively.20 Overall, New York is ranked third out of the 50 states in total distillate fuel use, with only Texas and California consuming more distillate fuel than New York. While New York has not conducted a comprehensive energy efficiency potential study for fuel oil, general conclusions can be drawn from a study conducted by Vermont in 2007.21 The Vermont study estimated the achievable cost-effective efficiency savings potential for fuel oil across all sectors to be 14 percent of the forecasted fuel oil use in 2016. Estimated potential oil savings by sector were 10.2 percent in both the residential and industrial sectors and 24.2 percent in the commercial sector. Those results, coupled with the high level of oil consumption in all sectors in New York, suggest that the potential for energy efficiency associated with use of No. 2 oil is very high.22 With respect to energy use in the transportation sector, New Yorkers consume less gasoline per capita than any other state. Auto trips, as a percentage of all travel in New York, is significantly lower than the national average. Use of public transportation systems and rail has grown over the last few years. Yet in 2006, 7.2 billion gallons of motor fuel were purchased in the State. Over one quadrillion British Thermal Units (Btu) were consumed by on-road vehicles, resulting in 88.7 million metric tons of CO2 emissions.
There are many ways this consumption can be reduced and have the transportation system operate more efficiently. These include keeping the entire system well-maintained, eliminating bottlenecks, providing 18 Optimal Energy, Inc., Achievable Electric Energy Efficiency Potential in New York State. 2008.
19 Optimal Energy, Inc. Natural Gas Energy Efficiency Resource Development Potential in New York. 2006.
20 U.S. Energy Information Administration (EIA). State Energy Data System, Table F4a, Distillate Fuel Oil Consumption Estimates by Sector. 2007. http://www.eia.doe.gov/emeu/states/sep_fuel/html/pdf/fuel_use_df.pdf 21 Vermont Department of Public Service (prepared by GDS Associates, Inc.). Vermont Energy Efficiency Potential Study for Oil, Propane, Kerosene and Wood Fuels. 2007. http://publicservice.vermont.gov/pub/other/allfuelstudyfinalreport.pdf 22 Energy efficiency potential studies also have not been conducted in New York for other home heating fuels, such as propane and wood. It is reasonable to assume that the energy potential for these fuels is similar to that identified for natural gas and home heating oil.
Produce, Deliver, and Use Energy More Efficiently 14 alternatives to driving alone and encouraging freight to be shipped and delivered in the most efficient manner. See the Transportation Issue Brief for an in-depth discussion of transportation efficiency.
2.1.3 Realizing Potential Savings Realizing these potential efficiency savings, across fuels and across end-use sectors, is the challenge the State faces over the planning period. Certain important strategies - including key legislative initiatives -
will cut across all energy consuming sectors and all energy sources. More specific programs, including those overseen by the Public Service Commission (PSC), will target those energy sources the State has historically regulated - namely, electricity and natural gas - across all end-use sectors. In addition, NYSERDA administered programs, funded under RGGI and various federal statutes, will, at least in part, target users of petroleum products and will reach the transportation sector. DHCR will continue to oversee a much expanded weatherization program as a result of additional funding from the American Recovery and Reinvestment Act (ARRA). Additionally, NYPA and LIPA will continue, and likely expand, their efficiency programs currently targeted to electricity use.
The States portfolio of programs includes those that target the residential sector, commercial and industrial customers, and governmental customers, with special attention to assist low income customers.
Though the programs may vary in their cost-effectiveness, it is critical to have a diverse program portfolio to reach all customers. Programs that assist low income customers will be particularly important in a carbon-constrained economy and a number of those programs are already providing assistance. Low-income programs include: the EmPower New YorkSM, which provides electric use reduction and home performance measures free of charge to eligible low income participants; the Weatherization Assistance Program (WAP), which assists income-eligible families and individuals in investing in energy efficiency measures to help reduce their monthly energy expenditures; and LIHEAP, which provides financial assistance to eligible households to help pay for their home heating costs.23 Cross-cutting Initiatives Program Coordination. The State of New York will continue to develop and implement energy efficiency programs through entities including NYSERDA, NYPA, LIPA, DHCR, and Department of State (DOS) and through PSC oversight of utilities. Current annual expenditures on these initiatives are expected to exceed $750 million. NYSERDA administers the System Benefits Charge (SBC) program of approximately $175 million. NYPA plans to spend approximately $135 million and LIPA expects average spending of more than $90 million. The expected PSC authorization of utility and NYSERDA spending is $330 million on electricity efficiency programs. In addition, the PSC has authorized a total of
$130 million for gas efficiency programs. In June 2009, the U.S. Department of Energy (DOE) approved New Yorks Weatherization Plan and awarded New York an initial approximately $158 million of the total $394 million in ARRA funding for the States WAP. 24 Furthermore, energy efficiency initiatives will also continue to be developed by local governments, notably the City of New York.
Contemporaneous initiatives have the potential to deliver a comprehensive portfolio of programs, including those tailored to specific customer sectors and local circumstances. However, without coordination, it is likely that multiple initiatives will confuse customers and contractors, result in inefficient use of ratepayer and taxpayer funding, and produce less than optimal results. Accordingly, 23 Additional information on energy efficiency and assistance programs for low income households can be found at Heat Smart, New York. http://www.heatsmartny.com 24 The Weatherization Plan was developed by DHCR, the agency that administers the States longstanding WAP. DHCR.
Weatherization Recovery Act Funding Plan. 2009. http://nysdhcr.gov/Programs/WeatherizationAssistance
Produce, Deliver, and Use Energy More Efficiently 15 energy efficiency programs should be carefully coordinated to eliminate or minimize overlap, conflicts and customer confusion. Similarly, energy efficiency programs by all administrators should be periodically evaluated and funding re-directed to its most effective use.
There is, as well, an overarching need to rigorous evaluation, monitoring and verification (EM&V) of all electricity and natural gas programs, and all program results. It is not just a matter of making sure the many hundreds of millions of dollars annually the State directs to efficiency are well spent. In order for energy savings through efficiency to be fully accounted for in reliability planning, robust EM&V practices are critical. Electric and gas system planners, the NYISO, the PSC, energy firms and others, must all satisfy themselves that the State can in fact rely on efficiency to carry the load the State has assigned to it. Only by instituting a sustained, well-funded EM&V effort - and only by building a consistent EM&V component into every efficiency program - will the State and all interested stakeholders be in a position to reach that necessary level of confidence. As part of its EEPS proceeding, the PSC in June 2008 called for the creation of an Evaluation Advisory Group (EAG) to advise on evaluation standards and protocols.25 While this group is working to standardize EM&V activities, additional coordination opportunities exist.
Recommendations All State agencies and authorities and utilities that administer energy efficiency programs must consistently measure and report results of efficiency programs, including energy savings, peak demand reductions, and load shifting, using similar techniques, metrics, and reporting formats.
Agencies and Authorities must use those results to optimize program support going forward.
Program results should be summarized and made available to the public on an annual basis.
o Expand the existing statewide EAG to include additional State agencies involved in energy efficiency programs.
o Develop standard measurement and reporting for statewide energy efficiency achievements.
o Release specific energy program achievement data including detailed evaluation reports on an on-going basis.
Mitigate short-term impacts of rising energy costs on New York's low income populations.
o Expand and enhance low income efficiency programs. These programs should include both implementation of energy efficiency measures and providing education on how to use energy more efficiently.
Energy Conservation Construction Code. Among the most significant steps New York can take to realize additional energy efficiency savings are to adopt an up-to-date version of the States building energy code (formally known as the Energy Conservation Construction Code, hereinafter referred to simply as the Energy Code), amend the Energy Codes enabling legislation to extend the Energy 25 PSC. Case 07-M-0548: Proceeding on Motion of the Commission Regarding an Energy Efficiency Portfolio Standard, Order Establishing Energy Efficiency Standard and Approving Program. Issued June 23, 2008.
Produce, Deliver, and Use Energy More Efficiently 16 Codes reach to more renovation activity, simplify and regularize its amendment/updating process, and upgrade Energy Code training and compliance initiatives.26 Building energy codes and equipment and appliance standards set minimum efficiency and performance levels, effectively setting a floor or baseline. Over time, with education, enforcement, and technology advances, the stringency of these codes and standards can be increased. Full compliance with building energy codes and equipment and appliance efficiency standards would produce significant annual and cumulative energy savings for New Yorkers beyond what would otherwise occur. As shown in Table 1, a recent study by Optimal Energy, Inc. estimated the potential for substantial energy savings that could be achieved through an enhancement of New Yorks building codes and appliance standards.27 Additional benefits include improved building stock, lower demands on New Yorks electricity and gas delivery infrastructures, and lower GHG and other harmful emissions.
Savings from improvements to the Energy Code, together with savings from improvement to equipment and appliance efficiency standards, have the potential to achieve about one third of New Yorks 15 by 15 electricity reduction target. Such improvements have the potential to produce major savings for all fuel types used in New York. Successful implementation of enhanced Energy Code and enhanced equipment and appliance efficiency standards can be achieved at relatively low-cost, resulting in large benefits in terms of energy and cost savings to consumers. The federal government has retained exclusive authority to promulgate efficiency standards for most appliances and equipment, leaving relatively little room for State action. However, the State can still promulgate efficiency standards for certain items, such as consumer audio and video electronics. There are also general product categories that are not currently covered by the federal standards or State law, such as bottled water dispensers, hot tubs, and swimming pool pumps.
Table 1. Estimated Savings from Codes and Standards Source: Optimal Energy. Achievable Electric Energy Efficiency Potential in New York State. 2008.
A critical strategy to realize these potential savings is to improve the performance of new buildings by strengthening the Energy Code, which establishes minimum requirements for energy-efficient buildings through prescriptive and performance-related standards, making possible the use of new materials and innovative techniques that conserve energy. Implementation of proposed changes to the Energy Code, discussed in detail in the Energy Efficiency Assessment, is an important interim step to making New 26 Also related, the Mechanical Code addresses maintaining healthful indoor air quality and those standards must be maintained.
27 Optimal Energy. Achievable Electric Energy Efficiency Potential in New York State. 2008.
Type of Energy Savings Codes Savings in 2015 Standards Savings in 2015 Total Savings in 2015 Electricity Savings (GWh) 2,158 7,202 9,360 Peak Demand Savings (MW) 469 1,572 2,041 Other Heating Fuels (Billion Btu) 4,960 1,792 6,752
Produce, Deliver, and Use Energy More Efficiently 17 Yorks building stock more energy efficient. In addition, it is also important to assure that code compliance and enforcement deliver on these potential savings.
New Yorks efforts will be greatly enhanced as a result of the recent approval of $4.4 million in funding from ARRA, which provides the State with new opportunities to further enhance the current Energy Code, address current challenges to maximizing the energy saving opportunities, expand active training and enforcement programs, and measure the rates of compliance.
With respect to the Energy Code, an eligibility requirement of the ARRA State Energy Program funds is that the State must certify to DOE that the Governor will pursue necessary energy-related initiatives.28 To comply, the State will implement: (1) a building energy code for residential buildings that achieves equivalent or greater energy savings than the 2009 edition of the International Energy Conservation Code (2009 IECC), (2) a building energy code for commercial buildings throughout the State that achieves equivalent or greater energy savings than the 2007 edition of the American Society of Heating, Refrigeration, and Air-Conditioning Engineers (ASHRAE) Standard 90.1 (2007 ASHRAE 90.1), and (3) a plan for achieving and maintaining compliance with those codes in not less than 90 percent of new and renovated building space by the end of 2016. The plan must include active training and enforcement programs and provisions for measurement of the rate of compliance each year. The DOS Codes Division has concluded its work on the Codes of New York State, including the Required Regulatory Impact Statements. DOS expects that the earliest the revised codes can be enacted, considering all necessary notification and comment requirements, is in early Fall of 2010.
However, to be fully compliant with ARRA requirements and to achieve greater efficiency savings, amendments are necessary to strengthen the underlying State Energy Law. On an annual basis, building renovation activity in New York, as measured in square feet, far exceeds new building construction.
Under Article 11 of the Energy Law, the Energy Code applies to renovations only if renovations involve replacement of 50 percent or more of a building subsystem.29 This high threshold for Energy Code applicability to renovations (referred to as the Fifty Percent Rule) reduces New Yorks opportunity to use the Energy Code to achieve improved energy efficiency in existing buildings. The Energy Code should be applicable to renovations of residential buildings and commercial buildings to the same extent that the 2009 IECC and the 2007 ASHRAE 90.1, respectively, are applicable to such renovations. In addition, the Energy Code currently exempts certain historic properties, rather than historic buildings, from the Energy Codes requirements. Under this law, renovation of non-historic buildings or construction of new buildings located on historic properties would not be subject to the Energy Code.
The Energy Code should exempt historic residential buildings and historic commercial buildings to the same extent that such buildings are exempt from the 2009 IECC and the 2007 ASHRAE 90.1, respectively. Further, the ability to amend the Energy Code should no longer be contingent on obtaining a ten-year payback study to confirm that the cost of compliance with the amended code will be paid back through energy savings in 10 years or less. This 10-year payback requirement delays the timely adoption of new energy conservation measures. National model energy codes: (1) do not include a Fifty Percent Rule, (2) exempt historic buildings, and not historic properties, and (3) contain no ten-year payback study requirements. In addition, provisions of the Energy Law that provide the Energy Code to be updated from time to time should be strengthened to require updating no less frequently than every three years.
28 NYSERDA received approximately $123 million from the DOE for the State Energy Program. Approximately $5 million of the $123 million will be used for technical assistance and compliance support related to the Energy Code.
29 A building subsystem is defined by Energy Law §11-102(9) as a building assembly made up of various components which serve a specific function, including but not limited to exterior walls, roof and ceiling, floor, lighting, piping, duct work, and equipment.
Produce, Deliver, and Use Energy More Efficiently 18 Although the Energy Code is adopted at the State level, it is enforced at the local level. In most situations, the local government (city, town or village) responsible for enforcing the State Uniform Fire Prevention and Building Code (Uniform Code) is also responsible for enforcing the Energy Code.
Educational expertise and available manpower vary across the State, with some municipalities being severely understaffed.
Code enforcement personnel responsible for enforcing the Uniform Code are required to take a 114-hour basic training course prior to, or within one year following, commencement of employment, and to take 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> of annual in-service training each year thereafter. However, only a small portion of the currently required training courses relate to the Energy Code. A plan to achieve compliance with the Energy Code in at least 90 percent of new and renovated building space within eight years, as conditioned by ARRA, should include a significant increase in the amount of Energy Code-related instruction that code enforcement personnel will be required to receive.
The ability of the State to achieve the 90 percent compliance rate contemplated by ARRA will be greatly enhanced if all participants in the building and building-related industries receive training in the new Energy Code. Ideally, State-provided instruction would be made available not only to code enforcement personnel, but also to design professionals, builders, and others in the building and building-related industries. Consistent with the provisions of ARRA, DOS, in partnership with NYSERDA, plans to offer a range of energy code training opportunities across the State and on the Web.
DOS has recently adopted an amendment to its regulations which requires local governments that administer and enforce the Uniform Code to file annual reports with DOS detailing their code enforcement activities.30 Since local governments that administer and enforce the Uniform Code are also required to administer and enforce the Energy Code, the reporting form requests information regarding the local governments efforts in enforcing the Energy Code. This reporting program is expected to be useful for measuring compliance with the Energy Code.
Article 11 of the Energy Law allows municipalities to adopt and enforce a local energy conservation construction code more stringent than the Energy Code. Such programs are referred to as Stretch Codes, or beyond code programs. Currently, a program is in development with NYSERDA for a stretch code for existing homes. For new residential construction, the International Code Councils (ICCs) ICC-700-2008 is in strong consideration due to its seamless fit with the ICC based uniform codes.
Alternatively, an ENERGY STAR program is acceptable as a Stretch program because it possesses a proven track record. ENERGY STAR has been in use in New York State for approximately 15 years.31 A number of Long Island towns have adopted ENERGY STAR standards as mandated minimums for new residential construction.
30 19 NYCRR §1203.4. Effective January 1, 2007.
31 Note that ENERGY STAR is not a code; it is a performance standard that raises the energy efficiency level of a structure beyond code levels. The Energy Code must still be used to show compliance, since ENERGY STAR does not contain all provisions of the Energy Code.
Produce, Deliver, and Use Energy More Efficiently 19 Recommendations Improve the Energy Code.
o Amend Article 11 of the Energy Law to: (1) provide that the Energy Code applies to renovations of residential buildings and commercial buildings to the same extent that the 2009 IECC and the 2007 ASHRAE 90.1, respectively, apply to such renovations, (2) clarify that historic buildings, rather than historic properties, are exempt, (3) eliminate the 10-year payback requirement, and (4) require the State Fire Prevention and Building Code Council (the Code Council) to amend the Energy Code so that it equals or exceeds the 2009 IECC for residential buildings and equals or exceeds the 2007 ASHRAE 90.1 for commercial buildings.
o Update the Energy Code every three years in response to updates to the IECC for residential buildings and ASHRAE 90.1 for commercial buildings.
o Implement the Code compliance plan required by ARRA, including Code training and enhanced Code enforcement resources.
o Implement a Stretch Code for municipalities wishing to implement beyond code programs.
Enact energy efficiency standards for products.
o Collaborate with other states to influence federal enactment of national standards.
o Promulgate regulations to implement standards from 2005 legislation.
o Adopt standards for other products not covered by national standards.
Delivery of Information to Consumers. Achievement of the States energy efficiency goals is dependent upon action by consumers to invest in energy efficiency equipment and infrastructure. Enhancing the energy use/cost information provided to consumers, particularly at the time of a purchase decision, will facilitate informed decisions that may have a prolonged effect on energy consumption and bills, and provide a powerful incentive for producers and sellers to make sure that their products satisfy consumer expectations regarding energy efficiency. Although New York has made considerable progress in increasing consumer awareness and understanding of the benefits of energy efficiency, the design and delivery of such information can be improved in several ways.
State-supported outreach, education and marketing efforts regarding energy efficiency should be tailored to promote consumer action. Thus, information provided to consumers should incorporate state-of-the-art behavioral marketing theory and practice. Delivery of this information should also optimize use of diverse delivery vehicles including the Internet, mass media, and community-based organizations.
Special attention should be given to communities that are generally considered hard to reach by virtue of their economic and demographic characteristics or geographic location, as well as to consumers for whom English is not the primary language. Additionally, where practical, outreach should be targeted to commercial and industrial customers and community clusters such as housing developments, to maximize
Produce, Deliver, and Use Energy More Efficiently 20 program impact.32 As part of its EEPS proceeding, the PSC in June 2008 directed that an Advisory Group be established to coordinate the efficiency-related outreach, education and marketing efforts conducted by State agencies, NYSERDA and utility administrators of energy efficiency programs.33 This Outreach, Education and Marketing Advisory Group is also working to integrate the efforts of these entities with a statewide customer outreach, education and marketing initiative.
In recognition of the fact that one of the most critical energy-related purchase decisions concerns the purchase of a home or lease of an apartment, the information provided to consumers concerning the energy consumption and efficiency of a residence should be enhanced. The States Truth in Heating Law,34 which requires sellers of residential properties and lessors of residential structures to provide certain information regarding energy use upon request of a prospective purchaser or tenant, should be strengthened to: expand the information that must be disclosed and require that information regarding the energy use of a residential structure be provided to prospective tenants and purchasers before a contract to rent or purchase is signed. These changes would help ensure that consumers have the opportunity to consider information regarding the energy use of a potential residence, before making a purchase decision, thus providing a powerful incentive for building owners to invest in energy efficiency. In addition, the law might be modified to extend the disclosure requirements to commercial structures.
Similarly, energy benchmarking, which entails the public issuance of a buildings energy consumption, indexed against buildings of comparable size and use, would provide information regarding a buildings energy use to building owners and managers, prospective tenants and prospective purchasers, thereby increasing the incentive for building owners and managers to reduce energy consumption. Such information would be of particular benefit in the commercial office building sector for a number of reasons, including: the proportion of electricity consumed in this sector in New York is far above the national average; commercial customers are generally less responsive to energy price changes than other customers; and building owners have a relatively small incentive to invest in energy efficiency where tenants pay the energy bill. Mayor Bloomberg has proposed legislation that would require annual benchmarking of energy use in buildings 50,000 square feet and larger as part of a package of legislation to improve energy efficiency in New York City.
Consistent with these initiatives, redesigning electric rates to vary by time of use for all electricity users, and providing cost/use information to users on a real time basis would enable customers to make informed decisions about when and how they can reduce their electricity use. This topic is addressed in greater detail below in the Electric System Efficiency discussion.
Recommendations Assure that efficiency outreach, educational and marketing efforts conducted by State agencies and authority administrators and utilities reflect best practices in terms of design and delivery, are geared to diverse audiences, and are provided in languages other than English.
o Identify best practices nationwide and implement statewide.
32 In his 2009 State of the State, Governor Paterson called for the creation of an energy efficiency clearinghouse to streamline access to the States energy efficiency programs for schools, hospitals, and local governments. The clearinghouse Website (http://www.nyserda.org/clearinghouse/) can serve as a model for other targeted outreach efforts.
33 PSC. Case 07-M-0548: Proceeding on Motion of the Commission Regarding an Energy Efficiency Portfolio Standard, Order Establishing Energy Efficiency Standard and Approving Program. Issued June 23, 2008, p. 43.
34 New York State Energy Law, Article 17 §103.
Produce, Deliver, and Use Energy More Efficiently 21 o Utilize the EAG to integrate efficiency program activity and streamline communication to consumers.
Use targeted outreach to deliver energy efficiency programs and services to commercial and industrial customers, residential and low income communities, to improve program performance and reduce administrative costs. Education, outreach and marketing for energy programs should be tailored, e.g., foreign language advertising, to target vulnerable populations and potential environmental justice areas.
o Identify and partner with community-based organizations to reach diverse groups with tailored messages.
o Target industry marketing programs to support the States Clean Energy Business Growth and high priority segments.
o Target underserved markets.
o Maintain the Energy Efficiency Clearinghouse Website and expand as appropriate.
Supplement Truth in Heating law requirements to ensure that prospective purchasers of residential and commercial buildings, as well as lessees responsible for payment of utility bills, are provided relevant information regarding the key energy efficiency attributes of the building.
Explore energy use benchmarking programs under which a buildings energy use indexed against comparable buildings is publicly disclosed.
Reducing Financial Barriers to Energy Efficiency Investment. One of the most significant barriers to adoption of cost-effective energy efficiency measures is lack of capital, or reluctance to commit capital, on the part of consumers. The need for upfront capital to make a substantial investment in energy efficiency is an issue of particular concern in difficult and uncertain economic circumstances. Although this concern is addressed, in part, by energy efficiency programs that provide substantial discounts on the cost of efficiency measures, as well as financing offered through NYSERDA and others, alternative financing programs to fund energy efficiency projects should be implemented. The Green Jobs - Green New York Act, recently signed into law by Governor Paterson, will help to address this concern. This law directs NYSERDA to establish a revolving loan fund to finance the cost of qualified energy efficiency services for residential and non-residential customers. Initial funding will come from a portion of the proceeds of RGGI, and will support loans of up to $13,000 for residential structures with four or fewer dwelling units and $26,000 for non-residential structures. Another promising approach is exemplified by legislation that Governor Paterson submitted and signed into law in 2009 that allows municipalities to provide loans to businesses and residents to install distributed energy resources and make energy efficiency improvements; the loans would be paid back through assessments on the real property where the loan was applied.35 This legislation in effect expanded earlier legislation that allowed Binghamton, Bedford, and solid waste districts to administer similar programs.36 Another mechanism to address the financial barriers to efficiency investments is on-bill financing or on-bill recovery, under which utilities or third-parties provide upfront financing for efficiency measures that 35 Chapter 497 of the Laws of 2009.
36 Chapter 336 (Bedford), Chapter 344 (Binghamton) and Chapter 409 (solid waste districts) of the Laws of 2009.
Produce, Deliver, and Use Energy More Efficiently 22 are repaid by the customer through the savings in their monthly energy bills. The PSC has been evaluating the legal, technical and policy issues associated with on-bill financing programs.
Recommendation Identify and implement alternative financing programs to fund energy efficiency projects, exploring all available innovative financing mechanisms, including use of a performance management approach where the beneficiary of the efficiency services repays the lender from energy savings for money loaned. Private and other governmental sources of funding should be explored.
o Implement revolving loan fund from Green Jobs - Green New York Program.
o Evaluate the need for, value and feasibility of on-bill financing or recovery and implement such programs as appropriate.
State Government Buildings. The State must lead by example, and make sure that the States own buildings are energy efficient. Executive Order 111, originally issued in 2001, requires State agencies to reduce energy use by 35 percent below 1990 levels by 2010. While many agencies have dramatically reduced their energy use to comply with the Order, the program is not administered and savings are not measured in a consistent manner across the agencies, thereby making it difficult to evaluate progress toward the goal. Additionally, State entities report upward pressure on their energy use as a result of the expansion of air conditioned spaces, increased load from computers and office equipment, and increased numbers of customers and clients. Improvements in the process, scope and metrics of the Order would help to ensure that accurate and meaningful movement toward meeting energy efficiency goals are in place. Furthermore, agencies now have another tool to make efficiency improvements in their buildings at no cost to the State. Recently enacted legislation proposed by the Governor will: (1) confirm and expand NYPAs authority to administer programs to reduce energy usage, reduce air pollution, conserve scarce natural resources, and facilitate the use of clean energy sources; (2) provide an efficient process for public entities and customers of NYPAs low-cost power programs to access NYPAs programs, technical expertise, and financing; and (3) facilitate local governments implementation of energy conservation programs funded through the ARRA. 37 In addition, pursuant to the State Green Building Construction Act, OGS, starting in August of 2010, will be required to construct and renovate State-owned buildings according to the green construction requirements. These requirements will be established by OGS through regulations.
Recommendation Reduce energy use in State Buildings.
o Amend Executive Order 111, which places requirements on State agencies pertaining to energy efficiency and renewable energy, to ensure efficient and consistent administration and measurement of savings.
o Encourage agencies to work with NYPA to take advantage of its efficiency financing programs in order to meet the goals of Executive Order 111.
37 Chapter 380 of the Laws of 2009, amending Article 8 of the Public Buildings Law.
Produce, Deliver, and Use Energy More Efficiently 23 Initiatives by Energy Source Electricity. The need for infrastructure to produce and deliver electricity is driven by end-use demand.
From 1997 to 2007, New Yorks electricity sales increased 1.2 percent annually. Results of the Starting Point case, which assumed reaching only 27 percent of the 15 by 15 goal, show that from 2009 to 2018, electricity demand increases at an average rate of 0.8 percent per year, or a total increase of 7.3 percent.
In dramatic contrast, results of the SEP Policy Reference case, based on full achievement of the 15 by 15 goal, show a reduction in demand over the planning period, as well as a reduction in output from New Yorks gas-fired combined cycle generating plants and a reduction in electricity imports.
In light of these benefits, the State has taken steps to fully fund electricity targeted efficiency programs in an effort to meet Governor Patersons 15 by 15 goal. Achieving this goal will require the cooperative efforts of many different entities, including all State agencies and authorities.
Figure 3 projects energy use reductions by major program categories that will be needed to meet the 15 by 15 goal, assuming continuation of existing programs, implementation of new programs, and the contribution of enhanced codes and standards. The area marked as Ratepayer Funded Programs is the portion of the 15 by 15 goal to be met by new PSC authorized programs to be administered primarily by utilities and NYSERDA. The other large wedge on the chart, Codes and Standards, underscores the importance of enhancing efficiency standards for electrical equipment and appliances and for assuring compliance with the Energy Code. The ongoing programs of NYSERDA, as well as expanded programs by NYPA and LIPA, are projected to make up most of the balance. It is significant to note that even with the considerable achievements made to date in the States end-user efficiency programs, achieving the 15 by 15 goal will require nearly a five-fold increase in annual energy savings by 2015.
Achieving the 15 by 15 policy goal is expected to reduce the net retail cost of electricity paid by all ratepayers by 2015.38 Figure 4 and Figure 5 show the results of an analysis of the net impacts of the 15 by 15 policy on statewide average retail electricity prices in selected years. As shown in Figure 4, in 2015, the statewide average retail price of electricity is projected to be 0.4 to 0.9 cents per kilowatt hour (kWh) lower, on a net basis, than if the 15 by 15 policy were not implemented. Figure 5 indicates that this estimated reduction in net price per kWh is equivalent to aggregate annual bill savings to ratepayers of $600 million to $1.4 billion in 2015.
38 Pursuing the 15 by 15 policy goal impacts average retail electricity prices in two opposing ways. First, the average retail price is expected to increase because the annual cost of implementing and administering energy efficiency programs is added to customer bills, while utility fixed costs will be spread across a smaller amount of energy sales. Second, the commodity portion of the electricity price is expected to decrease as a result of the price reduction effect of lower overall demand for electricity. Both types of price impacts affect all ratepayers, assuming that energy efficiency program costs are averaged across all customer classes and locations. This analysis does not include the additional bill savings that accrue to program participants who install energy-saving equipment and thereby benefit as a result of reduced volume of electricity purchased over time. The price reduction (or market price effect) impact of achieving the 15 by 15 policy goal is extracted directly from Integrated Planning Model modeling results by comparing the Statewide average electricity prices in the SEP Policy Reference Case, which assumes full achievement of the 15 by 15 policy goal, to the Higher Demand Case, based on NYISOs econometric forecast, which includes no downward adjustments for implementation of the 15 by 15 policy goal. The lower average electricity prices in the SEP Policy Reference Case are directly attributable to achievement of the 15 by 15 policy goal, due to the reduction in the need for electricity generated by the most inefficient and expensive fossil fuel-fired units, as well as by reducing imports of electricity from outside New York. Because the annual costs to ratepayers of all the programs needed to achieve the 15 by 15 policy goal are not yet known with a high degree of certainty, "low" and "high" estimates are used to bound the analysis. The low estimate is based on a three-year historical average (2006 through 2008) of NYSERDA's energy efficiency programs funded through the System Benefits Charge. The high estimate assumes that the future cost of energy efficiency programs on a cents per kWh basis is double the cost of programs implemented to date. The expected system load reduction due to improved Codes and Standards is assumed to be achievable with no incremental cost to ratepayers.
Produce, Deliver, and Use Energy More Efficiently 24 Figure 3. Achieving New York's 15 by 15 goal Source: NYSERDA Figure 4. Estimated Statewide Average Retail Price Impact of Achieving the EEPS Source: NYSERDA 0
5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 MWh's Ratepayer Funded Programs T & D Codes & Standards Existing Utility Programs SBC III (NYSERDA)
Other State Agencies NYPA LIPA
Produce, Deliver, and Use Energy More Efficiently 25 Figure 5. Estimated Aggregated Statewide Retail Bill Impact of Achieving the EEPS Source: NYSERDA The EEPS proceeding was initiated by the PSC in May 2007 as part of the overall effort to reduce New Yorks electricity use by 15 percent from forecasted 2015 levels.39 Subsequently, the PSC established and approved efficiency targets for the States investor-owned electric utilities and NYSERDA.40 Figure 6 shows the expected impact of the 15 by 15 policy on New Yorks total electricity needs, compared to forecasted total electricity needs without the policy.
39 PSC. Case 07-M-0548: Proceeding on Motion of the Commission Regarding an Energy Efficiency Portfolio Standard, Order Instituting Proceeding. Issued May 16, 2007.
40 Implementation of EEPS programs will be the responsibility of NYSERDA, the utilities, and third party program administrators.
Produce, Deliver, and Use Energy More Efficiently 26 Figure 6. Impact of 15 Percent Reduction in Electricity Use Source: NYSERDA, NYISO In June 2008, the first EEPS programs were approved.41 As of December 2009, approximately $397 million through 2014 was approved for NYSERDA to expand and enhance a number of existing programs, including a lighting program, low income program and programs to encourage high-performance energy-efficient buildings, improving industrial processes and expanding the number of service providers available to facilitate more informed decision-making with respect to energy efficiency, energy procurement, and project financing. An additional $520 million through 2011 was authorized for investor-owned utility programs that could be implemented quickly and build internal energy efficiency program administration capabilities within the companies. The electricity programs include a residential heating, ventilation and air conditioning (HVAC) program, and a small business direct install program for retrofits of various types of existing equipment with high-efficiency equipment. The approved natural gas program is a residential efficient gas equipment program focusing on providing incentives for installation of more efficient furnaces, boilers and water heaters.42 41 PSC. Case 07-M-0548: Proceeding on Motion of the Commission Regarding an Energy Efficiency Portfolio Standard, Order Establishing Energy Efficiency Portfolio Standard and Approving Programs. Issued June 23, 2008. This approved funding is incremental to funding of $175 million annually for the pre-existing SBC Program, which is used in part to support energy efficiency programs.
42 PSC approved Fast Track utility-administered electric energy efficiency programs with modifications on January 15, 2009.
Utility-administered natural gas programs are being considered by the PSC. NYSERDA began implementing additional electric energy efficiency programs on March 13, 2009.
Produce, Deliver, and Use Energy More Efficiently 27 To help ensure the integrity of the energy efficiency savings through collection of accurate data on actual achievements, the PSC provided for the development of EM&V protocols, a series of screening metrics, including a total resource cost analysis, and increased evaluation budgets compared to previously approved programs. These approaches are critically necessary for electric system planning, estimation of reduced utility revenues due to lower sales levels, and evaluation of the success and cost-effectiveness of the programs.
Throughout the remainder of 2009, it is anticipated that the PSC will consider additional programs to be operated through 2011 as proposed by EEPS Program Administrators. The PSC will institute a comprehensive review of the programs included in its EEPS initiative in advance of the December 31, 2011 expiration of the initiatives initial phase to inform its decisions regarding funding beyond 2011.
Levels of funding and program selection will depend heavily on the results of the EM&V initiatives the PSC has been putting in place.
The State is also undertaking several other initiatives to drive further improvements in the efficient use and delivery of energy, including continued implementation of revenue decoupling mechanisms for all the States major energy utilities to remove potential disincentives to utility promotion and implementation of efficiency programs, and preparing for the deployment of Advanced Metering Infrastructure (AMI) in a cost-effective manner - as discussed in the Electric System Efficiency section of this Chapter.
Recommendation Implement Energy Efficiency programs to reduce State electricity demand from projected levels.
o Continue implementation of efficiency programs to meet 15 by 15goal.
o Ensure appropriate contribution of NYPA and LIPA to State efficiency goals.
Natural Gas. Outside the electricity sector (which accounts for 34 percent of natural gas use in the State),
natural gas is used primarily in the residential and commercial sectors for heating, hot water and appliances. End-use efficiency through improvements in products and weatherization can significantly reduce natural gas demand. A reduction in natural gas demand through efficiency can reduce strain on natural gas infrastructure, and because a portion of the electricity system is dependent on natural gas, it can also improve electric system reliability due to reduced risk of fuel supply disruptions.
As discussed in the Energy Demand and Price Forecasts Assessment, it is anticipated that residential and commercial natural gas demand will increase over the planning horizon at annual rates of 0.12 percent and 1.25 percent, respectively. The projected increases are primarily driven by economic growth and increases in the number of customers, but some conversions from heating oil to natural gas are also expected. It is also anticipated that the overall trend of natural gas use per residence will decline because appliances and equipment that use natural gas are expected to become more efficient over time in response to federal regulation, and, unlike for electricity, there are relatively few new natural gas products for residential customers coming to market.
Produce, Deliver, and Use Energy More Efficiently 28 There is significant potential to reduce demand for natural gas through energy efficiency improvements.
A natural gas efficiency potential assessment update was conducted in 2006, estimated that the maximum achievable potential over a 10-year period of 18 percent of projected natural gas consumption.43 While the potential for reducing natural gas use through efficiency programs is significant, efficiency programs in other energy sectors could affect the overall demand for natural gas. For example, many electricity efficiency programs, including NYSERDAs EmPower New YorkSM and Assisted Home Performance with ENERGY STAR programs, encourage switching electric appliances, such as clothes dryers and hot water heaters, to gas-fired appliances. Further, utility-sponsored programs promote switching from electricity and oil to natural gas. A growing market also exists for combined heat and power (CHP) technologies, which enable customers - primarily commercial and industrial - to use natural gas on their premises to generate electricity and use the waste heat for space and water heating.
Building efficiency could also be improved through the installation of environmentally beneficial DG/CHP resources located at customer sites. These resources enhance energy efficiency, particularly in commercial buildings, because the electricity by-product of CHP can be directly used. State action to facilitate implementation for DG, including additional technical and financial support, financial incentives for low carbon DG resources, and removal of any barriers to interconnection of DG to the electric grid, would result in energy and cost reductions, improved energy security and reliability and reductions in air emissions.44 While these initiatives would tend to increase natural gas consumption, the increase could be at least partially offset by a reduction in natural gas use for central station electricity generation. Also, overall efficiency could be improved. For example, burning natural gas directly in a water heater (which typically operates at between 60 percent and 80 percent efficiency) is more efficient than burning natural gas at a power plant (with a maximum efficiency of 60 percent), and shipping the electricity over power lines (with line losses of 8-10 percent) to power an electric water heater (with an efficiency of 90-95 percent), resulting in a net efficiency of approximately 50 percent.
In May 2009, the PSC established targets for natural gas efficiency programs as part of the EEPS proceeding in order to establish a comprehensive approach to gas efficiency, including a transition from the interim and fast track programs.45 Combined with reductions anticipated from other sources, the natural gas reduction targets will result in a nearly 15 percent reduction in estimated gas use by 2020, independent of any fluctuations in use caused by fuel switching or other economic factors.
43 The original study, Optimal Energy, Inc. Natural Gas Energy Efficiency Resource Development Potential in New York. 2006, estimated the potential natural gas savings based on $80 million per year for five years and five years post market effects. The Optimal Energy, Inc. New York State Natural Gas Efficiency Program Assessment Update. 2008, changed the length of the $80 million per year program scenario funding from five to 10 years (from $400 million to $800 million) and applied a modified discount rate. All other assumptions used in the 2006 study were preserved including budget allocation based on sector spending, 50 percent of the residential budget allocated to low income consumers, and the proposed programs which attempted to balance short-term resource acquisition efforts and long-term market transformation benefits.
44 While DG/CHP is not necessarily renewable, a recommendation regarding DG/CHP is grouped with renewables in Chapter 3.
45 PSC. Case 07-M-0548 Proceeding on Motion of the Commission Regarding an Energy Efficiency Portfolio Standard, Order Establishing Targets and Standards for Natural Gas Efficiency Programs. Issued May 19, 2009.
Produce, Deliver, and Use Energy More Efficiently 29 Natural gas efficiency programs previously approved on an individual basis outside of the scope of the EEPS proceeding vary in design and duration and are expected to result in natural gas savings of approximately 2,400,000 million Btu (MMBtu) in 2009 with annual funding of approximately $62.7 million.46 Earlier in the EEPS proceeding, natural gas utilities established energy efficiency programs that provide rebates to consumers for purchasing high-efficiency equipment such as furnaces, water heaters, clothes washers, solar hot water technology, and hot water conservation measures. The programs also provide marketing training for contractors and sponsor discounted sales of low-flow showerheads, faucet aerators, and tank wraps. 47 Also, in April 2009, EEPS programs for residential gas efficiency equipment programs, designed to promote the installation of efficient, cost-effective, furnaces, boilers and other equipment, were approved. These programs are funded at approximately $10.6 million per year through 2011, and are designed to reduce annual natural gas consumption by approximately 533,000 MMBtu per year.48 In total, the EEPS gas efficiency target represents a 14.7 percent reduction in estimated gas usage by 2020, independent of any fluctuations in usage caused by switching or other economic factors, representing an average annual reduction of gas usage of 3.8 billion cubic feet by 2020, enough gas to heat about 39,000 average-sized homes. This target is aggressive in comparison with the gas efficiency potential study identified above, which estimated a maximum achievable potential of 18 percent of projected consumption over 10 years. New Yorks goal is expected to be achieved as a result of changes to codes and standards, a continuation and expansion of programs administered by State authorities and DHCR, as well as through programs authorized by PSC approved funding totaling $130 million annually.
Now that programs for natural gas efficiency are underway, it is critical that these programs be coordinated with the States other efficiency initiatives to help ensure maximum benefits without duplication of efforts.
Oil and Other Fuels. Adoption of ultra-low sulfur heating oil for residential, commercial, and industrial heating applications could yield energy efficiency improvements, lower emissions, and reduced system maintenance costs. Reducing the sulfur content of heating oil offers clear benefits including: reduced fouling of heat exchangers and reduced rates of efficiency degradation; reduced emissions of fine particulates; and stimulation of the market for ultra-high efficiency condensing appliances. In these appliances, low sulfur oil produces a condensate that is less corrosive. This allows the use of more compact appliances and use of more common materials of construction, both of which reduce the cost of achieving high efficiency levels. In these condensing appliances ultra-low sulfur fuel also leads to reduced maintenance requirements and longer life. Finally, the use of ultra-low sulfur heating oil will reduce the number of homeowner service calls due to the "clean burn" and subsequent reduction in plugging and soot build up of the heating systems.
46 PSC. Case 07-M-0548, supra, Report on Natural Gas Efficiency Goals, Working Group IV. Submitted October 17, 2008.
47 PSC. Case 08-E-1003 Petition of Orange and Rockland Utilities, Inc. for Approval of an Energy Efficiency Portfolio Standard (EEPS) Fast Track Utility-Administered Electric Energy Efficiency Programs with Modifications, et al. Issued January 16, 2009.
48 PSC. Case 08-G-1016 Petition of KeySpan Energy of New York for Approval of an Energy Efficiency Portfolio Standard (EEPS) Fast Track Utility-Administered Gas Energy Efficiency Program with Modifications, et al. Issued April 9, 2009.
Produce, Deliver, and Use Energy More Efficiently 30 NYSERDA is designing a set of new programs under RGGI to increase the energy efficiency of homes and businesses that use fuel oil for space and water heating.49 The programs are being designed to support activities that are not currently funded by existing programs. These RGGI programs will create an all fuels, all sectors approach to New York efficiency activities and capture additional efficiencies and energy bill savings opportunities.
Using energy more efficiently in the transportation sector will reduce the States reliance on petroleum.
This should be accomplished through reduced usage and a transition to cleaner, less carbon intensive vehicles and fuels. Reductions in petroleum use can be accomplished by reducing the number of miles driven by single occupant vehicles. On the passenger side, this requires the availability of other green transportation choices such as reliable public transportation, intercity passenger rail options, carpooling and ride-sharing services, and education and outreach programs to inform the public of their transportation choices and the effect those choices have on air quality. On the freight side, increasing options for freight rail services and improving intermodal connections can reduce the growth in VMT.
Many of these strategies and improvements will help the State achieve the goal set by the Governors Renewable Energy Task Force Report, namely to reduce VMT by 10 percent statewide from projected levels within 10 years.50 The State supports local government policies and actions that will reduce congestion and VMT where such measures are found to be cost-effective and supported locally. To assess the States progress in reducing VMT, the New York State Department of Transportation (DOT) should track statewide VMT levels, data limitations, discrepancies and trends and continue to estimate GHG emissions, energy usage and other emissions as part of adoption and approval of transportation plans, programs and projects.
Innovation in the transportation system can also result in the system becoming more energy efficient.
New York has been active in the use of innovative technology in the transportation sector and intends to support additional deployment. Maximization of investment in the Intelligent Transportation Systems (ITS) has energy efficiency benefits. ITS encompasses a broad range of wireless and wire line communications-based information and electronic technologies that can be used to improve safety and efficiency in many ways. As one example, ITS can be used to provide real-time information to travelers, allowing them to make more efficient route choices, and hence use less gasoline, by avoiding congested or closed roadway. They can also be used for communicating to emergency responders and the public, where incidents, accidents and traffic jams have occurred, allowing the responders to get to the scene more quickly and advising the public to take alternate routes.
To reduce GHG emissions from vehicles, the State has promulgated Greenhouse Gas Exhaust Emission Standards revising New Yorks existing low emission vehicles (LEV) program to adopt California's GHG emission regulations.51 President Obama has now endorsed these standards as a model for a federal program. This year the Obama Administration proposed rules to require passenger cars to reach a 39 mpg fuel economy standard by 2016 and 30 mpg for light trucks and sport utility vehicles. This results in an overall fuel efficiency standard of 35.5 mpg. Nationally, the transportation sector contributes nearly a 49 In New York, the RGGI Program has been implemented through two complementary programs: DEC has established New York's CO2 Budget Trading Program (6 NYCRR Part 242, 6 NYCRR Part 200, General Provisions) and NYSERDA has established the CO2 Allowance Auction Program (21 NYCRR Part 507). The CO2 Allowance Auction Program has established the rules through which New York will sell most of its CO2 allowances.
50 Renewable Energy Task Force. Clean, Secure Energy and Economic Growth: A Commitment to Renewable Energy and Enhanced Energy Independence. 2008.
51 6 NYCRR Subpart 218-8.
Produce, Deliver, and Use Energy More Efficiently 31 third of the United States GHG emissions. There is a need to reduce these emissions to slow the rate of climate change caused by human activity. Given the urgency and recognizing the historic next steps taken by the Administration, New York believes that a more aggressive standard and timetable can be achieved for future CAFE standards. A standard that is equivalent to the Technology Exhaustion alternative for light duty trucks and the Total Costs Equal Total Benefits alternative for passenger cars is economically and technologically feasible (as described in the Environmental Impact Statement on CAFE standards prepared by National Highway Traffic Safety Administration). This would produce a fuel economy standard of 43.3 mpg for passenger cars and 34.7 mpg for light trucks.
While there are many opportunities for the State to use energy more efficiently in the transportation system, providing sufficient resources to accomplish many of the strategies and programs is challenging.
Identified funding is not enough to maintain the system in a state-of-good repair, let alone to enhance its energy efficiency. DOT produced a comprehensive needs study in 2007 that showed that transportation investments are less than half of what is needed.52 New and innovative funding mechanisms should be explored.
Recommendations Expand green transportation choices to users of the transportation system (residents and businesses). This includes enhanced public transportation service and carpooling/ride-matching services for commuters and intercity rail, as well as waterborne services, for shippers. In this way, the State will help meet the statewide goal of reducing VMT 10 percent below projected levels by 2020.
o Identify available green transportation choices and promote them.
o Identify opportunities to expand green transportation choices.
o State agencies will include systematic consideration of transportation choices, energy use, energy conservation, and climate change as part of their State Environmental Quality Review Act (SEQRA) reviews when they are lead agencies.
o Endorse Smart Growth and GHG emission reductions as key principles in Transportation Plans and Transportation Improvement Programs (TIPs).
Support federal action to encourage energy efficiency and GHG reductions from the transportation sector.
o Work with New York Congressional Delegation and transportation organizations to develop new funding formulas within the next Surface Transportation funding bill that provide incentives to states to reduce energy use.
o Work with the federal government to strengthen the recently proposed CAFE standards.
End-Use Efficiency Programs Beyond 2015. The States policy to achieve 15 percent savings by 2015 is only an interim goal. As shown in detail in the Energy Efficiency Assessment, modeling shows that if 52 DOT. Multimodal Investment Needs and Goals for the Future (20 Year Needs Assessment). 2008.
https://www.nysdot.gov/programs/repository/multimodal%20investment%20needs.pdf
Produce, Deliver, and Use Energy More Efficiently 32 these policies and programs are not continued beyond 2015, then electricity demand will increase between 2015 and 2018. The PSC expects to conduct a comprehensive review of progress to date from ratepayer funded energy efficiency programs to position itself to reauthorize program funding as appropriate beyond 2011. All entities responsible for energy efficiency initiatives should conduct a similar review of progress, and the potential for additional efficiency gains in the future. That review will determine, among other things, the extent to which improvements in existing codes and standards, as well as the implementation of new codes and standards, have created downward pressure on the growth of energy use in New York. It will also reveal the extent to which market prices, alternative financing mechanisms, efficiency benefits, and market transformation efforts have reduced the need for future ratepayer support for energy efficiency programs. Similarly, the State needs to evaluate the progress made regarding energy efficiency in the natural gas and fuel oil sectors, and modify programs going forward. A comprehensive examination of program costs and benefits will inform the degree to which these programs are the best tools to reach the States efficiency potential beyond 2015.
2.2 Electric System Efficiency Making our electric system more efficient will help to ensure a high level of reliability, help mitigate upward pressure on electricity prices, and allow time to develop the low-carbon-intensity electricity infrastructure necessary to meet long-term GHG reduction goals. Actions taken by the State to date -
ranging from the design of its competitive wholesale electricity market to the expansion of energy efficiency programs for end-users - have encouraged the efficient production, delivery, and use of electricity.
2.2.1 Progress to Date The efficiency of electricity production and delivery in New York has been improving in recent years and several ongoing initiatives are expected to continue that progress. First, New Yorks competitive electricity market structure, established in 1999 and administered by the NYISO, provides an economic incentive to power plant operators to run as efficiently as possible. Under this structure, power plants and demand side resources53 are dispatched by the NYISO in order of lowest to highest bid cost.54 All dispatched units are paid the market clearing price, which is based upon the marginal bid of the last plant dispatched.55 Under this arrangement, suppliers, absent market power, have every incentive to bid into the market their marginal costs of production, because if they bid below it they may run at a loss and if they bid above it they may not be selected for dispatch and will neither run nor be paid. More efficient, i.e., lower heat rate,56 resources are attracted to competitive markets where they can profit by competing against less efficient producers, an incentive that does not exist in non-market regions. The market structure also encourages plants to run more consistently. Average plant availability in New York increased from 87.5 percent in the 1992 to 1999 timeframe to 94.4 percent in the 2000 to 2007 timeframe.
53 Demand side resources refer to customer loads that can respond to short term price signals by coming off line.
54 See the Electricity Assessment: Resources and Markets and the Energy Infrastructure Issue Brief for additional information.
55 The marginal cost is the cost to produce the next increment of output. The generating unit that produces that increment is called the marginal unit (or the unit on the margin) at that point in time.
56 Heat rate is a measure of a generators efficiency in terms of power output for a given heat input. The lower the heat rate or less heat input that is required for a unit of power output, the more efficient a power plant is.
Produce, Deliver, and Use Energy More Efficiently 33 2.2.2 Potential for Additional Efficiencies Power Production The gross heat rate of New Yorks power plant fleet has been trending downward since the late 1990s, indicating a continuing improvement in the overall efficiency of the States electric generation. The NYISO has calculated that since 1999, New Yorks gross heat rate has improved 21 percent.57 In general, new plants use technologies that are more efficient than those used in older power plants. As older facilities retire and newer, more efficient plants come on line, the average heat rate of the power plant fleet in New York is expected to improve. The States markets and its commitment to continually improve them will facilitate this substitution.
Transmission and Distribution Improving efficiency in the delivery of electricity from generation facilities to end-users in a cost-effective manner by reducing transmission and distribution system losses will also mitigate prices and environmental impacts. In June 2008, the PSC commenced a proceeding to reduce system losses and increase power transfer capability.58 The proceeding is: examining how generation and existing equipment can be better utilized in efficient system operations; identifying actions the utilities could take to minimize their own use of energy; determining what programs the utilities could offer customers to reduce their reactive power uses; and determining what equipment could be installed on the transmission and distribution system to assist in efficient system operations. Commission staff, all the utilities (including LIPA and NYPA), and the NYISO are collaborating in this proceeding.
Demand Response. The existing electric grid is structured such that electricity flows from centralized power plants to local sub-stations via the grids transmission system and then from those sub-stations through the grids distribution system to the end-user when it is demanded. This infrastructure, i.e.,
power plants and transmission and distribution systems, must be sized to meet the peak demand of the system, even though this peak may only occur for a few hours every year. As shown in Figure 7, the State needs nearly 34,000 megawatts (MW) of generating capacity to meet peak demand, even though hourly demand exceeds 25,000 MWh (approximately 74 percent of system peak) in only about five percent of the hours in a typical year.
Additionally, during periods of high peak demand, it is often the least efficient, most polluting and most costly plants (peaking units) that must be dispatched.
57 NYISO. New York State Power Plant Emissions 1999 - 2008. 2009.
pdf 58 PSC. Case 08-E-0751 Proceeding on Motion of the Commission to Identify the Sources of Electric System Losses and Means of Reducing Them, Order Clarifying Scope of Proceeding. Issued July 17, 2008.
Produce, Deliver, and Use Energy More Efficiently 34 Figure 7. Load Duration Curves for New York Average Load 2006 - 2008 Source: NYISO There are a number of demand response programs in New York which can moderate or shave peak loads.
These programs reduce the need for new infrastructure, discipline market prices, help ensure reliability, and promote the efficiency of the system. Programs supported by NYSERDA and the PSC have achieved a total of 1,285 MW (710 MW permanent, 575 MW callable) of load reductions statewide. The NYISOs demand response programs have been successful in reducing peak load by as much as 900 MW during reserve shortages. The impacts of demand response efforts can be profound and can influence both the need for new infrastructure and the need to call upon the least efficient and most polluting peaking units.
Demand response programs are discussed in more detail in the Electricity Assessment: Resources and Markets.
More recently, in February 2009, the PSC instituted a proceeding to focus on demand response efforts in New York City stemming from continued peak demand growth and the necessary infrastructure investment needed to meet it, along with the desire to reduce emissions from peaking facilities used to meet peak loads.59 The proceeding is examining a wide range of demand response issues including an assessment of the total potential cost-effective demand response, the ability to focus programs on system or network peaks (and related impact on potential environmental justice areas), the integration of competitive providers into the programs, funding sources, integration with energy efficiency programs 59 PSC. Case 09-E-0115: Proceeding on Motion of the Commission to Consider Demand Response Initiatives, Order Instituting Proceeding. Issued February 17, 2009.
Produce, Deliver, and Use Energy More Efficiently 35 and NYPA demand response programs, and evaluation and measurement methods. Technical conferences are underway and pilot programs are being explored.
Recommendation Encourage demand response.
o As appropriate, direct implementation of cost-effective approaches and technologies that facilitate demand response to achieve reliability and other public policy objectives.
Smart Grid. As described in detail in the Electricity Assessment: Resources and Markets, Smart Grid encompasses the use of advanced/enhanced technology and two-way communications to improve the operations and the efficiency of the entire electric grid from generation to end-use consumption. Such an approach, theoretically, would enable active participation of consumers, enable the grid to accommodate all generation and storage options, enable new products, services and markets, provide improved power quality for the digital economy, optimize asset utilization and operational efficiency, and anticipate and respond to system disturbances. Currently, the electric grid in New York, as well as most other large power systems in the world, uses modern and extensive technology to control electricity flow and operations. Increased use of Smart Grid technology in New York could, however, result in significant improvements. Anticipated improvements include enhancing operator decision-making to avoid and manage events similar to the 2003 Northeast Blackout and the 2006 Long Island City outages; reduction of power system losses; provision of greater demand response options and results; mitigation of fault duty issues (thereby enhancing DG); improvement of Consolidated Edison Company of New York, Inc.s (Con Edison) secondary network monitoring; and automation of distribution system operation.60 Further, Smart Grid would likely result in increased dynamic reactive compensation and power flow control in key parts of the system to maintain proper voltages and to increase power flow transfers - or at least reduce power transfer degradations - due to system demands and conditions, and also reduce effects of system disturbances.61 Several initiatives to expand the use of advanced technology and implement Smart Grid elements are underway in New York. Specifically, the PSC approved investment of ratepayer funds for investor-owned utilities for Smart Grid project proposals that may be eligible for competitive grants from DOE pursuant to ARRA.62 In addition, the State is pursuing Smart Grid through an integrated approach and strategy through its work with utilities and on various task forces and consortiums. The State facilitated the creation of the Smart Grid Consortium, which is a partnership of the utilities, leaders in academia and industry, NYSTAR, NYSERDA, the PSC, NYPA, and LIPA. The group is coordinating the deployment of Smart Grid projects throughout the State, and leveraging federal ARRA money. The Consortium has expressed support for ARRA Smart Grid applications of its members, which totaled over $800 million.
In October 2009, DOE informed Con Edison and the NYISO that they had been selected by DOE for award negotiations, indicating the likelihood of both companies receiving a grant under the Smart Grid Investment Grant Program. The awards are anticipated to total $173.5 million from DOE, with total 60 Distribution Automation involves the remote monitoring, coordination, and operation of various distribution equipment, e.g.,
automatic sectionalizing switches.
61 These systems are generally referred to as Flexible AC Transmission Systems, which covers a number of system-types that can control voltage and transmission capacity, e.g., Static VAR Compensator, Static Synchronous Compensator and those that can control flows, e.g., Unified Power Flow Controller, Interline Power Flow Controller, and Variable Frequency Transformer.
62 PSC. Case 09-E-0310: In the Matter of the American Recovery and Reinvestment Act of 2009 - Utility Filings for New York Economic Stimulus Funds, Order Authorizing Recovery of Costs Associated with Stimulus Projects. Issued July 27, 2009.
Produce, Deliver, and Use Energy More Efficiently 36 project value, including cost sharing, of more than $348 million. Then in November 2009, DOE informed Con Edison, LIPA, and NYPA that they had been selected for award negotiations for their regional Smart Grid demonstration projects, with potential DOE funding totaling over $58.5 million.
Rate design, based on rates that vary by time of use, coupled with advanced metering, may yield end-use efficiency gains and may improve electric system efficiency by reducing peak loads. As explained above, enhancing the information provided to electricity consumers in advance of or at the time of use would facilitate informed decision-making and help reduce customer energy bills. Providing electricity pricing information to consumers at the time consumption decisions are being made, and charging consumers accordingly, would enhance economic efficiency, assist consumers in managing their energy use and controlling their bills and could help reduce system peaks.
The PSC has taken action in this regard, including the requirement that the States largest commercial and industrial customers, generally those with electricity demand exceeding 500 kilowatts (kW), have interval meters to encourage control of daily electric load and discourage use at peak hours. Currently, more than 2,200 customers, representing more than 15 percent of peak load, are now billed on day-ahead hourly prices.
In contrast, the vast majority of residential and small commercial electricity customers are informed of the applicable price of electricity only upon receipt of a monthly bill, up to 30 days after-the-fact. Moreover, that unit price represents an average throughout the billing period and does not reflect the customers pattern of energy use throughout the month. These customers also generally receive very little information about their consumption behavior and how changes in usage patterns can reduce their energy bills. Finally, these customers do not know when the electricity system is peaking and is using the most expensive units to meet that load. As noted, they receive a bill every month with an average price per kilowatt-hour. If these customers instead received a real-time price signal that reflected the high cost of generation during peak periods, they may be inclined to reduce their energy use during those periods.
LIPA is in the final stages of installing smart meters on approximately 200 residential and commercial customers in two different neighborhoods to determine how smart meters can be integrated into the system. The project will also evaluate how customers can interact with various in-home displays or web-based information tools that will give those customers substantial knowledge on how and when they use their electricity. LIPAs Trustees have recently authorized an AMI pilot rate that will allow LIPA to offer modified time of use rating periods to participating smart meter customers in an effort to evaluate alternative time periods and price differentials that would motivate these customers to reduce their energy usage and overall annual electric bills.
Recommendations Consistent with addressing cyber-security and physical security risks, support investments in Smart Grid and the efforts of the Smart Grid Consortium to identify opportunities for accelerating advancements and investments in Smart Grid technologies; greater use of distributed resources; advanced meters and pricing mechanisms; and leveraging of federal Smart Grid funding to support greater system reliability and efficiency, and to reduce electricity costs to customers.
o Work with the Smart Grid Consortium to develop action plans.
o The PSC should consider approving Smart Grid investments where they are shown to benefit ratepayers and achieve the States multiple planning objectives.
Produce, Deliver, and Use Energy More Efficiently 37 Use electricity price signals to help level load and reduce generation requirements.
o Study potential requirement that electricity be priced on a time of use basis for all customers. Issues that should be considered in making that determination include: the practical hardships and difficulties related to implementing time of use rates for residential customers, and possible means to mitigate any such hardships; and alternative rate regimes, based on voluntary participation of residential customers.
o Implement rate structures and metering requirements for non-residential customers that encourage shifting use of electricity to off-peak hours.
Energy Storage. Energy storage is also a tool to improve system efficiency. Electricity markets are unique among major commodity markets in that they require instantaneous matching of supply and demand. Other energy commodities, such as natural gas and oil, can effectively be stored in large quantities, providing a buffer between supply and demand. Without an effective means of storage, the electric grid has traditionally maintained excess capacity in generation and transmission. Although it is difficult to store electricity directly, electric energy can be stored in other forms, such as chemical and mechanical energy, and efficiently converted back to electricity as needed. Bulk electricity storage capable of providing hundreds of megawatts of power for several hours and distributed energy storage capable of injecting/absorbing up to several megawatts for seconds or minutes have the potential to provide economic benefits, while improving the stability and reliability of the grid, especially if applied during peak load periods.
Existing and emerging energy storage technologies include pumped hydroelectric generation, compressed air energy systems, batteries (including those used for plug-in electric vehicles), capacitors, and flywheels. Multiple activities to support these technologies are underway. For instance, NYSERDA is involved in an effort to evaluate plug-in hybrid electric vehicles (PHEVs), looking at both the performance and behavior of the vehicles and the potential electric grid impacts that increased penetration levels could have. Related to this effort, in his 2009 State of the State Address, Governor Paterson announced the creation of the New York Battery and Energy Storage Technology (NY BEST)
Consortium, which is intended to progress academic research into commercialization of energy storage technologies, with particular focus on applications in the transportation sector. In addition, NYSERDA is supporting a 1 MW flywheel energy storage demonstration project with Beacon Power. The company is also developing a 20 MW application of the flywheel technology to be deployed in Stephentown.
Another utility scale energy storage demonstration project initially supported by NYSERDA has been selected by DOE to enter into award negotiations for ARRA funding. New York State Electric and Gas Corporation was notified in November 2009 that its planned 150 MW compressed air energy storage facility had been selected to receive ARRA funding totaling greater than $29.5 million.
Energy storage technologies optimize the electric system in a number of ways. They could store renewable energy generated off peak for when it is needed. They also provide very rapid frequency and regulation support, responding to signals from the NYISO much faster than traditional load following fossil generation. If storage devices are connected to renewable energy resources, there would be zero emissions.
Produce, Deliver, and Use Energy More Efficiently 38 Recommendation Encourage energy storage deployments.
o Define energy storage technologies under Public Service Law (PSL), Section 2(2-b), in order to exempt energy storage facilities up to 80 MW from the jurisdiction of the PSC.
This would reduce the time and cost of permitting and encourage the development of these technologies.
39 3 Support Development of In-State Energy Supplies Accelerating the strategic development of New Yorks energy resources, both in the renewable energy and natural gas areas, will play a key role in achieving the Plans policy objectives. Production and use of in-state energy resources can increase the reliability and security of energy systems, reduce energy costs, and contribute to meeting climate change and environmental objectives. To the extent that renewable resources and natural gas are able to displace the use of higher emitting fossil fuels, relying more heavily on these in-state resources will also reduce public health and environmental risks posed by all sectors that produce and use energy. Additionally, by focusing energy investments on in-state opportunities, New York can reduce the amount of dollars exported out of the State to pay for energy resources. By re-directing those dollars back into the State economy, New York can increase its economic competitiveness with other states that are less dependent on energy supply imports to support their local economies.
3.1 Renewable Energy When compared with carbon-intensive fossil fuel resources, renewable resources generally have significantly lower negative impacts on public health and the environment, and contribute less to climate change. However, while the cost of renewable technologies varies, the levelized cost of renewable energy technologies is generally higher than that of fossil-fuel technologies.63 This difference is reflected by the price premium that is paid for renewable electricity under the RPS Program. The price premium, expected to range from approximately $16 to $32 per MWh, is the incremental price New York must pay in order to make renewable generation competitive in a marketplace where price is primarily driven by fossil-fueled resources. The price disparity between renewable resources and fossil-fueled resources exists in part because the full externality cost of fossil fuel use is not built into its price. These external costs include the negative public health and environmental impacts that result from the combustion of fossil fuels. For example, there will likely be increased societal costs associated with the effects of climate change, such as property damage from increased storm activity or moving large populations in newly-inundated areas from floods or rises in sea-levels, and these costs are not currently fully reflected in the price of energy. As a consequence of this disparity, there has not been widespread private investment in and deployment of renewable resources. Therefore, market intervention (typically in the form of regulatory mandates and publicly funded financial incentives) is necessary to reduce the cost disparity to a level that encourages this investment - at least until environmental and other externalities are reflected in the prices of fossil fuels. New York is relying on both regulatory mandates, such as the RGGI program as well as financial incentives for the accelerated development of renewable energy technologies.64 63 Levelized cost is the net present value of the cost per unit of energy output over the life of the project. It accounts for the upfront capital costs and the marginal costs of operation.
64 RGGI requires electricity generators to purchase CO2 allowances for every ton of CO2 they emit. The price of these allowances is built into the marginal operating costs of the plant, and then passed on in their offering price. In this way, the harmful effects of carbon dioxide emissions are being partially accounted for in the price of electricity.
Support Development of In-State Energy Supplies 40 Government mandates, e.g., emissions cap and trade programs, renewable fuels standards and financial incentives, that are designed to reduce this disparity are sometimes criticized for having short-term impacts of raising the price of energy. These arguments, however, fail to consider the broader and longer-lasting economic benefits, in addition to environmental and energy security benefits, associated with the development of renewable resources. The direct economic benefits of renewable energy include the creation of short-term (engineering, design and construction) and long-term (administration, operation and maintenance) jobs, increased local capital investment, increased tax revenues for local governments, and increased revenue for landowners. Direct economic benefits lead to additional indirect economic benefits through the macroeconomic ripple effects of injecting incremental income into the State economy over the life of various projects, which may be 20 years or more.
As discussed in the next section, the potential exists for renewable energy to meet a large percentage of societys energy needs, but achieving the full potential in the near-term given current economic and technical realities, would come at an extraordinary cost. As renewable energy programs are designed, targets that are designed to take advantage of the energy, environmental and economic development opportunities must also consider the cost of other resources that are available to meet short-term goals.
Over time, the cost of deploying renewable technologies continues to decrease as demand for renewables grows and technologies become more advanced.
3.1.1 In-State Potential and Development Progress New Yorks renewable potential exists in all of the primary energy-consuming sectors of the economy:
the electric generation sector, the transportation sector, the residential, commercial, and industrial sectors, and the agriculture sector. New York currently meets approximately 11 percent of its primary energy needs with renewable energy resources. However, the available technical/practical potential, which takes into consideration technical and some social constraints on the pure technical potential, but not economic constraints, indicates that approximately 40 percent of all New Yorks energy needs over all sectors could be met with renewables by 2018.65 This accounts for only hydropower, wind, biomass, and solar-PV resources. It does not include the potential of solar thermal, geothermal, and hydrokinetic energy sources. This outer-bound forecast leaves New York with substantial room to expand its use of renewable energy resources. This expansion could technically occur, but there would be a significant cost associated with the implementation of these resources. The solar and wind resources represent approximately 60 percent of the technical/practical potential and an even larger percentage of the overall cost. If the full technical/practical potential for solar and wind resources were installed at current prices, the cost to New York would be approximately $300 billion dollars.66 In the electric generation sector, the most significant existing developed resources are hydropower, biomass (biogenic waste67 and wood) and biogas, and wind. As of 2007, in-state hydropower supplied 25,253 GWh (15 percent of total demand), biomass and biogas supplied 1,942 GWh (approximately 1 65 Technical/practical potential includes consideration of manufacturing and materials limitations and land use constraints, e.g.,
the prohibition of the development of renewable energy projects in State parks, but does not consider economic costs, certain social constraints, or system operation, transmission, or distribution limitations.
66 The $300 billion dollar estimate is based on the following approximate installation cost assumptions: solar-PV costs $8,000 per kW; onshore wind costs $2,000 kW, and offshore costs $3,300 per kW. The State incentive level required to drive the adoption of this technology would not need to equal the entire $300 billion, but would be a significant percentage (as much as 1/3 depending on federal incentives). DOE has aggressive goals for solar-PV cost reductions. If solar-PV costs were to see rapid reductions to $3,000 per kW, during the planning period, the total cost would amount to approximately $150 billion dollars.
67 Biogenic waste is the organic portion of the waste stream.
Support Development of In-State Energy Supplies 41 percent of total demand), wind supplied 873 GWh (less than 1 percent of total demand), for a combined total of 28,068 GWh (17 percent of total demand).68 The technical/practical potential of hydropower, biomass, wind, and solar-PV is estimated at 31,000 GWh, 9,400 GWh, 48,000 GWh, and 53,000 GWh, respectively, by 2018. This would amount to 141,400 GWh annually - enough to supply well over 75 percent of New Yorks projected electricity generation needs by 2018 (assuming full achievement of 15 by 15).
In the transportation sector, biomass has been predominantly used for the production of biofuels, such as ethanol and biodiesel. The State has the installed capacity to produce approximately 175 million gallons of ethanol and 7.5 million gallons of biodiesel annually, which could displace approximately two percent of the petroleum demand in the transportation sector. However, as referenced in the Renewable Energy Assessment, a significant portion of the biomass feedstock that is currently used in the production of biofuels is imported from other states. DOE estimates the States potential for ethanol production from in-state available biomass feedstocks at nearly 475 million gallons annually today, increasing to 585 million gallons in 2012 or four percent of the petroleum demand in the transportation sector.69 These estimates, however, may be overly optimistic given the States desire to harness biomass in a responsible and sustainable manner. For example, some forms of ethanol require more energy inputs (farming, transport of feedstock, refining, etc.) than the resulting energy output from the fuel. Taking this into account, a comprehensive assessment of the in-state biomass potential, including estimates of the current and very near-term feedstock potential in New York using current practices and technology, is currently underway in the development of the Renewable Fuels Roadmap and Sustainable Biomass Feedstock Study (Biofuels Roadmap) for New York.70 The Biofuels Roadmap is expected to be released in early 2010 and will assist policy makers in the development of comprehensive bioenergy policies. In addition, the Climate Action Plan is evaluating the potential for using New York biomass for liquid fuels production, as well as electricity generation and space heating by conventional and emerging technologies.
Biomass has been the leading in-state renewable resource consumed in the residential, commercial and industrial sectors as measured by primary energy input. It is typically used in these sectors as a heating fuel in the form of wood. Currently the State uses 99 trillion Btus (TBtu) of wood and 13 TBtu of biogenic waste annually (eight percent of primary energy demand for these sectors, excluding electricity use) and has the technical/practical potential to develop 350 TBtu and 14 TBtu annually by 2018, respectively (23 percent of primary energy demand for these sectors, excluding electricity use). Biodiesel blends are also used in these sectors as a heating fuel, and are not included in these potential assessments.
Conventional heating technologies used for biomass combustion, such as wood stoves and hydronic heaters or wood boilers, can be relatively inefficient (with thermal efficiencies between approximately 40 68 The RPS goal considers the renewable portion of the electricity used, not produced, in-state. Therefore, renewable electricity imports can count toward the 25 percent goal. The technical/practical potential figures represent renewable generation in-state.
Additional information on technical/practical potential can be found in the Renewable Energy Assessment.
69 DOE, Alternative Fuels and Advanced Vehicles Data Center. State Assessment for Biomass Resources: New York Potential Biofuel Production. 2008. http://www.afdc.energy.gov/afdc/sabre/sabre.php?mode=prod 70 In 2008, the Governors Renewable Energy Task Force issued a report calling for the development of a Renewable Fuels Roadmap and Sustainable Biomass Feedstock Study for New York. It is intended to inform the State and the public of the economic and environmental impacts of biofuels.
Support Development of In-State Energy Supplies 42 and 70 percent)71 compared to new high-efficiency technologies, such as two-stage gasification boilers, which can achieve thermal efficiencies of over 80 percent.72 New York is embracing this next generation of wood boiler systems, with four manufacturers currently located upstate, and expansion of the industry within New York is anticipated. The State also has a significant wood pellet manufacturing industry, including two of the regions largest manufacturers. Expansion within the States wood pellet industry is also expected, as New York currently has a capacity of 350,000 tons per year of pellets and an additional 200,000 tons of capacity is planned to become available within the next two years.73,74 In order to create a viable and sustainable high-performance bioheating industry and market, the State should undertake a five-tier market transformation effort which may include:
Addressing the low-efficiency bioheating systems currently in the marketplace.
Establishing a regulatory floor for new high-efficiency systems.
Setting a voluntary standard for the best new systems.
Continuing to assist New York manufacturers in developing new high-efficiency technologies.
Ensuring that New York has a skilled workforce to deliver these products and services.
The State is preparing a step-by-step guidebook to lower the information and cost barriers that developers of small-scale biomass electricity projects may face, including codes, siting and permitting issues, land, water, air, noise/visual concerns, and information on financial assessment and economic incentives. This guidebook is expected to be released in Spring 2010.
Comprehensive assessments of the total potential to displace conventional heating sources with solar thermal energy have not been conducted for New York. However, a recent assessment of solar domestic hot water systems within the State indicated that solar thermal energy could potentially provide over half of the energy required for water heating in a typical home in New York that has adequate access to 71 State of New York Office of the Attorney General. Smoke Gets in Your Lungs: Outdoor Wood Boilers in New York State.
2008.
http://www.oag.state.ny.us/bureaus/environmental/pdfs/Smoke%20Gets%20in%20Your%20Lungs%20Revised%20March%202 008.pdf 72 NYSERDA. Biomass Combustion in Europe: Overview on Technologies and Regulations. 2008.
http://www.nyserda.org/programs/Environment/EMEP/Report%2008-03%20-%20Biomass%20Combustion%20in%20Europe-complete-after%20corrections.pdf 73 NYSERDA Communication with New York State pellet manufacturers. October 2009.
74 A total of 550,000 tons of wood pellets is equivalent to 8.5 TBtu, which represents 13 percent of the States residential wood consumption in 2007. NYSERDA has provided support for research addressing both biomass combustion technologies and fuel standards. A full list of NYSERDA projects can be found at:
http://www.nyserda.org/programs/Research_Development/biomasscasestudies.asp
Support Development of In-State Energy Supplies 43 sunlight.75 Similarly, while specific data on geothermal potential in New York is unavailable at this time, it is assumed that the potential for space and water heating is significant.76 Farm-based renewable energy technologies and applications focus on the ability to turn farm wastes into energy resources, mostly through the use of digester technologies. By converting wastes into usable gas, farms can either use this gas on-site by producing electricity for farm operations or can deliver gas to the natural gas pipeline system. Biofuels may also play a more significant role in rural communities, and by creating distribution systems for local use of fuels, farms may play a key role in growing suitable energy crops, aid in the conversion of such crops into usable fuels, and then have local communities and on-farm use of such fuels serve as primary markets. The creation of such closed loop energy systems, if ultimately feasible, may help to significantly reduce the amount of fossil fuels needed to power New Yorks agriculture sector.
While New York has significant renewable energy potential in its electric generation, transportation, residential, commercial, industrial, and agriculture sectors, barriers exist to the full realization of this potential. Most significantly, the cost of development of the resources is not accounted for in the estimate of technical/practical potential. The vast majority of costs associated with renewable development are the upfront costs of deploying the technologies, since operating costs are low, e.g., wind, water, and solar are free fuels. While the benefits and potential of renewable development are significant, the primary challenge is overcoming the upfront investment that is required for deployment.
3.1.2 Renewable Policies Public policies to support renewable energy development are primarily aimed at overcoming the economic barriers to widespread use of these technologies. While some policy approaches, such as tax credits and net metering, are meant to provide general support for specific renewable technologies, other approaches are meant to develop markets for broader use of renewable technologies generally, such as the RPS Program which seeks to achieve a targeted level of renewable energy use. Decision makers must carefully balance setting appropriately ambitious targets for incentive and deployment programs with the cost of achieving such targets. Well-designed programs will use public funds to leverage maximum private investment to achieve the States policy targets, and must therefore account for the full spectrum of benefits to be realized from such activities.
As is noted in markets generally, New Yorks experience in renewable energy development to date has shown that the most cost-effective projects are developed first. Todays higher cost renewable energy projects become more cost competitive as the technologies advance and as the cost of fossil fuels rise; as such they will be easier and less costly to deploy in the future. Renewable energy policies should be regularly reviewed to determine if changes are necessary to respond to changing market conditions.
Similarly, renewable energy targets should be increased as the economics of the various technologies and market conditions improve.
75 NYSERDA. Solar Domestic Hot Water Technologies Assessment: Final Report 08-09. 2008.
http://www.nyserda.org/publications/Report%2008-09%20Solar%20Domestic%20Hot%20Water%20-%20web.pdf 76 Geothermal refers to two different uses of the Earths thermal properties: supporting the generation of electricity and the transfer of heat to or from a building. Geothermal power is the generation of electric power from heat stored below the Earths surface in the form of hot water, hot rocks, or lava. New York does not currently generate electricity from geothermal resources.
A geothermal heat pump, or ground-source heat pump, is an electrically-driven heat pump that uses the nearly constant temperature of the Earth, instead of outside air, to heat or cool a building's air or water supply.
Support Development of In-State Energy Supplies 44 Each renewable energy technology offers unique challenges and benefits, and policies can take these into consideration. Large-scale wind power is generally more cost competitive than other renewable resources, but in New York its greatest output tends to be during periods of the day when demand is low.
Biomass generation can be used as a base load resource, but unlike wind, water and solar, the fuel must be sustainably managed and harvested. Solar-PV systems can be more easily deployed in densely populated areas than other renewables and its output closely matches with peak demand, but solar-PV, which is more often deployed as small scale installations in New York, is among the highest cost renewable technologies. While some technologies may appear to provide greater benefits for their costs, it is important to focus policies on developing multiple technologies simultaneously, as the portfolio of technologies can offer complementary benefits, such as the complementary relationship between wind resources which peak during the night, and solar-PV that peaks during the day.
Federal Policies Sustained and adequately funded federal government policies and programs are an essential component of renewable energy technology development. With a foundation of sound federal policy, New York will be able to best craft policies and programs that target the in-state energy, environment and economic development opportunities that can provide sufficient incentive for successful realization of benefits from a variety of technologies and applications.
Development of renewables is supported at the federal level through a number of policy tools. In 2007 the federal government provided $3.97 billion in tax expenditures to support renewable energy, which made up approximately 81 percent of all federal support for renewable energy technology.77 The two major types of federal financial support for wind energy are the Production Tax Credit and accelerated depreciation through the Modified Accelerated Cost Recovery System. The Production Tax Credit provides for a $19 per MWh tax credit which, when monetized, for example, at a 35 percent marginal tax bracket, is worth $6.65 per MWh. The federal government in 2008 extended the 30 percent Solar Investment Tax Credit for eight years and removed the $2,000 cap on costs eligible for the credit, sending an important signal of support to the solar-PV marketplace.
The Energy Independence and Security Act of 2007 (EISA)78 created a number of new programs to support renewable fuels. The EISA accelerated the schedule for effectuating the Renewable Fuel Standard (RFS) first enacted in the Energy Policy Act of 2005. The RFS now mandates the sale of nine billion gallons of renewable fuels in 2008 and 36 billion gallons of renewable fuels in 2022 - 21 billion gallons of which must be cellulosic ethanol or other advanced biofuels.
The American Recovery and Reinvestment Act of 2009, like EISA, provides funding for energy efficiency and renewable energy projects, including on-site renewable energy technology that generates electricity for government buildings and renewable energy capital projects. As of the end of November 2009, New York based entities and projects had been selected for over $1.36 billion in ARRA clean energy awards.
Potential national renewable energy portfolio standard, carbon cap-and-trade, and climate change legislation could provide further support for renewable energy development in New York in addition to the policies mentioned above.
77 U.S. Energy Information Administration. Federal Financial Interventions and Subsidies in Energy Markets, Table ES-1. 2007.
http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/execsum.pdf 78 Public Law 110 - 140.
Support Development of In-State Energy Supplies 45 Current State Renewable Policy To encourage development of renewable generation in-state, New York adopted its RPS in 2004 (2004 Order).79 This remains the States primary policy initiative to promote the development of renewable resources. The RPS goal set forth in 2004 was to increase the amount of electricity delivered to New York consumers that was generated from renewable resources to 25 percent by 2013.
The 2004 RPS Order anticipated achieving the RPS goal through a number of State initiatives (taking into account the existing large scale hydropower and other renewable resources that counted toward the goal),
including the RPS Program administered by NYSERDA, Executive Order 111, and the voluntary green power market.80 The RPS Program creates an incentive for renewable energy investments by providing an additional source of revenue to the owners of the renewable energy systems beyond the market price of electricity. Coupled with federal and State tax incentives, the RPS Program helps to overcome the economic barriers to renewable deployment in New York.
Main Tier Program. The RPS Program is divided into a Main Tier and a Customer-Sited Tier. The RPS Program Main Tier is directed towards development of medium-to large-scale electric generation facilities where the electrical output of the systems is delivered into the wholesale power market.
NYSERDA acts as the Programs central administrator and pays production incentives for the RECs under long-term contracts with the renewable generators. The long-term contracts are awarded through a competitive bidding process that takes into consideration a proposals bid price and potential economic benefits to the State. Though this Central Procurement model is not common among states that have an RPS program, it has the advantage of providing a large bidder pool that stimulates competition and drives down bid prices. As a result, total program cost to ratepayers is minimized.
As of November 2009, four Main Tier solicitations had been offered since program inception. Results from the latest solicitation had not been released at that time, but the first three solicitations had resulted in contracts with 26 new in-state generation facilities for approximately 1,100 MW of nameplate capacity.81 This renewable capacity is expected to produce approximately 2.8 million MWh of electricity per year, enough clean energy to supply over 440,000 average homes. The majority of this capacity is from wind generation facilities, though hydroelectric and biomass facilities also contribute to this number.
Distributed Generation. To target the development of smaller, behind-the meter resources that produce electricity primarily for use on site, the RPS Program includes a Customer-Sited Tier. Programs under the Customer-Sited Tier target specific technologies including solar-PV, small wind, anaerobic digesters, and fuel cells and offer fixed financial incentives for each technology. As of March 2009, Customer-Sited Tier facilities had an estimated total annual production from installed capacity of 4,490 MWh.82 The RPS Program is not the States only initiative supporting development of renewables. Since 2006, LIPA has procured RECs and energy from a wide variety of resources, including customer-based solar-PV systems, onshore wind projects, fuel cells, biofuels, conventional and pumped hydropower, and 79 PSC. Case 03-E-0188, Proceeding on Motion of the Commission Regarding a Retail Renewable Portfolio Standard, Order Regarding Retail Renewable Portfolio Standard Policy. 2004.
80 Additional information on the RPS goal and expected contributions can be found in the Renewable Energy Assessment.
81 Two out-of-state generation facilities have also won contracts. The capacity of those facilities totals 37 MW, and the facilities are expected to produce 0.15 million MWh annually.
82 NYSERDA. RPS Program Progress Report. March 2009.
Support Development of In-State Energy Supplies 46 landfill gas. LIPA also has incentive programs for solar-PV installations which have resulted in the installation of 11.7 MW of capacity.
Bilateral Contracts Main Tier RPS contracts anticipate the sale of project power into the wholesale marketplace. In contrast, power purchase agreements (PPAs) are contracts between energy suppliers and utilities (or other buyers) that specify the terms and conditions under which electricity will be generated and purchased. LIPA and NYPA are using PPAs offered through a competitive bidding process to acquire significant quantities of renewable power from private developers.
LIPA has issued a Request for Proposals (RFP) calling for 50 MW of utility-scale solar-PV whose output would be purchased by LIPA under a PPA.83 Negotiations with a short list of developers resulting from the RFP process, development efforts, and environmental reviews are currently underway. It is anticipated that these solar projects will be installed on parking lots, commercial building rooftops, and federal property in 2010 and 2011. Pursuing a similar path, NYPA has issued a Request for Expressions of Interest that would call for NYPAs purchase of up to 100 MW of solar-PV systems supported by PPAs.84 LIPA and NYPA are also considering the use of PPAs in collaboration with other governmental entities and utilities to support the development of offshore wind projects. One of these collaboratives, The Long Island-New York City Offshore Wind Project (consisting of LIPA, Con Edison, NYPA, NYSERDA, New York City Economic Development Corporation, the Metropolitan Transportation Authority (MTA), and the Port Authority of New York and New Jersey), is in the early stages of evaluating a proposed 350 MW project located in the Atlantic Ocean approximately 13 miles off the Rockaway Peninsula.85 The Great Lakes Offshore Wind Project is engaged in a similar effort looking at the potential for development of 120 MW to 500 MW in the Great Lakes.86 This Projects feasibility study is addressing wind project siting and permitting issues and evaluating transmission and infrastructure limitations, consistent with a recommendation of the Governors Renewable Energy Task Force.
Net Metering Net metering allows customers with solar-PV, wind, or anaerobic digester systems to get credit for the electricity sent back into the electric grid from their DG systems when those systems are producing more power than the customers require. In essence, the electric meter is allowed to run backwards. New Yorks current net metering law covers systems located in investor-owned utility service territories allows for the participation of residential and non-residential customers. For residential net metering, the statute limits the systems size to 25 kW, while for non-residential net metering, the statute limits system size to 83 LIPA. Governor Paterson Announces Plans for States Largest Solar Energy Project. 2008.
http://www.lipower.org/newscenter/pr/2008/042208_gov.html 84 NYPA. Request for Expressions of Interest to Support the Preparation of a Request for Proposals for a 100 MW Solar Power Initiative in New York State. 2009.
85 The Long Island-New York City Offshore Wind Project issued a Request for Information on June 30, 2009 and plans to issue an RFP toward the end of 2009. More information on this collaborative can be found at http://www.linycoffshorewind.com/
86 NYPA. NYPA President Kessel Calls for Proposals to Develop the First Fresh Water Wind Energy Initiative in the Nation.
2009. http://www.nypa.gov/press/2009/091201.htm
Support Development of In-State Energy Supplies 47 the lesser of 2 MW or the customers peak demand. Farm-based wind and anaerobic digestion systems are limited to 500 kW.87 On Long Island, LIPA has a net metering policy that applies to solar-PV and wind. Residential systems are limited at 27.5 kW, non-residential systems with a demand less than 27.5 kW are limited to the lesser of 27.5 kW or 110 percent of peak demand, and non-residential systems with a demand greater than 27.5 kW are limited to the lesser of 2 MW or peak demand. Additionally, farm-based solar-PV systems are limited to 27.5 kW and wind systems are limited to 500 kW.88 Non-Electric Renewable Incentives Incentive programs aimed at non-electric renewables are currently being developed. For instance, the RGGI programs all fuels, all sectors approach targets solar thermal deployment.89 One program being considered targets the residential sector and would provide incentives for the installation of solar thermal water heaters that replace fossil-fuel domestic hot water systems. Roll-out of this program could begin in early 2010.90 A Geothermal Heat Pump Systems program has been authorized under the States EEPS Program. A recent PSC Order allocated a total of $2.3 million over three years in support of this NYSERDA-administered program.91 The program will provide incentives for installing systems for heating, cooling, and summer hot water heating. This program is also expected to be rolled out in early 2010.
87 Chapter 355 of the Laws of 2009 expands New York's net metering law by adding residential micro-CHP systems to the list of currently eligible technologies that can be net metered.
88 LIPA. Tariff for Electric Service. http://www.lipower.org/pdfs/lipatariff.pdf 89 RGGI is the nations first mandatory, market-based effort to reduce emissions of greenhouse gases over time. Under RGGI, New York, along with nine Northeastern and Mid-Atlantic states, has placed a cap on carbon dioxide (CO2) emissions from electricity generators. CO2 emission allowances are sold to fossil fuel generators in quarterly auctions. To the degree that the requirement to purchase CO2 allowances increases the market clearing price for wholesale electricity, RGGI is expected to make renewable electric generation more competitive with fossil-fueled generation. Proceeds from the auctions will be used to fund programs that target greenhouse gas emissions reductions.
90 More information on the RGGI program can be found at http://www.nyserda.org/RGGI/
91 PSC. Case 08-E-1132: Petition of NYSERDA for Approval of an Energy Efficiency Portfolio Standard - Energy Efficiency Program, Order Approving Electric Energy Efficiency Programs with Modifications. Issued June 24, 2009.
Support Development of In-State Energy Supplies 48 State Tax Credits New York has a personal income tax credit for the residential use of bioheat (heating oil that contains biofuel).92 The tax credit is equivalent to $0.01/gallon for each percent of biodiesel and is provided up to the first 20 percent of biodiesel that is blended with conventional fuel and thus the tax credit is capped at
$0.20/gallon. This tax credit encourages the use of biodiesel, which has no sulfur and burns cleaner and more efficiently than petroleum-based fuel. Since New York is the largest consumer of heating oil in the country, biodiesel could become an important in-state renewable resource, given that most biodiesel is soybean-based, and soybeans are a plentiful crop in New York (more than 5 million bushels are produced annually on about 144,000 acres).
Personal income tax credits are available for residential solar-PV, solar thermal, and proton exchange membrane fuel cell systems. This tax credit is equivalent to 25 percent for solar systems and 20 percent for fuel cells. The credit is capped at $5,000 for the cost of solar systems and $1,500 for the cost of fuel cells. New York exempts residential solar thermal and solar-PV systems from sales tax.93 This includes both the purchase and installation costs. This exemption does not apply to solar thermal pool systems or other like applications.
3.1.3 Expanded State Renewable Policy Goal When the PSC adopted the 25 percent RPS goal, New Yorks existing renewable generation (including net imports) was expected to account for 17.3 percent of forecasted demand in 2013. Thus, the incremental new renewable generation required to meet the 2013 goal represented 7.75 percent of forecasted demand. In 2008, the PSC adopted the EEPS, which set a goal to reduce electricity use by 15 percent below forecasted levels in 2015. As a result of this EEPS, a lower amount of new renewable generation (4.8 percent) is required to meet the 25 percent RPS goal.
In his 2009 State of the State Address, Governor Paterson announced that he would pursue policies that would achieve a 45 by 15 clean energy goal. This will require an increase of the RPS policy goal to 30 percent by the year 2015 and full realization of the States 15 by 15 efficiency goal. This raises the incremental RPS goal, excluding existing major hydroelectric resources, to 9.3 percent of the forecasted demand in 2015, nearly doubling the incremental RPS target. The PSC is currently reviewing the RPS funding level in light of achieving the new 30 percent goal.94 A decision from the PSC may come as early as December 2009.
Electricity sector modeling indicates that achieving the goal of a 30 percent RPS is expected to reduce the net retail price of electricity paid by all ratepayers. In 2018, the average statewide retail price of electricity is projected to be 0.06 to 0.16 cents per kWh lower than it would otherwise be if the 30 percent RPS did not exist. Figure 8 indicates that this estimated reduction in net price per kWh is equivalent to aggregate annual bill savings to ratepayers of $93 to $262 million.
92 NY CLS Tax, Article 22 § 606 (mm).
93 NY CLS Tax, Article 28 § 1115 (ee).
94 PSC. Case 03-E-0188, supra, Staff Mid Course Report. Issued October 26, 2009. At the time of publication, the PSC had not rendered a decision on revising the program.
Support Development of In-State Energy Supplies 49 Figure 8. Estimated Aggregate Statewide Retail Bill Impact of Achieving 30 Percent RPS Source: NYSERDA The reduction in wholesale prices assumes the achievement of the 45 by 15 policy initiative, which would require the addition of 10,329,752 MWh of Main Tier and Customer Tier renewable resource generation by 2015.95 The majority of renewable resources that have been (and are expected to be) deployed under the Main Tier are wind plants. Given that these units have no fuel costs, they often bid their power into the NYISOs electricity markets at or near zero dollars per MWh. Since New Yorks competitive wholesale electricity market dispatches units from lowest to highest marginal costs, when wind units are generating power, they displace more expensive fossil fuel-fired units otherwise required at the time. As a result, adding renewable energy generation in-state has the effect of reducing the average wholesale price of electricity.
In addition to reducing the price of electricity, meeting the 30 percent target will result in both environmental and macroeconomic benefits. Direct macroeconomic benefits in the form of jobs in construction and operation of new facilities, payments to the State and localities, payments for fuel and land leases, and in-state purchase of materials and services, are projected to exceed $6.0 billion over the 20-year life of the facilities. The indirect ripple effects of injecting the incremental expenditures and income into the States economy increase the total expected macroeconomic benefits to approximately
$12.5 billion.96 Based on the projected reduction in electricity prices shown in Figure 8, benefit-cost ratios for meeting the 30 percent target are estimated to range from 3.6 to 4.0, if only environmental and price 95 See Electricity Assessment: Modeling for detailed discussion of modeling structure, assumptions, and results.
96 KEMA Inc (prepared for NYSERDA). New York Main Tier RPS: Impact and Process Evaluation. 2009.
Support Development of In-State Energy Supplies 50 reduction benefits are included; and to range from 4.9 to 5.3 if macroeconomic benefits are added to environmental and price reduction benefits.97 3.1.4 Challenges and Recommendations Expand and Improve the RPS to Meet the Governors 30 Percent by 2015 Goal The RPS Program is the primary mechanism for increasing renewable energy capacity in New York. By the end of 2009, it is likely that all of the currently allocated funding for the Program will be committed.
Therefore, the first challenge to achieving the Governors goal will be to extend funding authorization for new Main Tier solicitations. It is critical that the primary funding source for the States program be replenished. New Yorks RPS Program needs to demonstrate a sustained commitment to renewable development. It must promote market certainty and must be designed to enable timely response to changing market conditions.
Additionally, market certainty and expansion of renewable market opportunity can be realized by providing a stable marketplace in which developers can sell RECs in the voluntary market, which, like other commodities, requires using modern technologies to track and account for transactions. Currently, New York has no such REC tracking system.
Electric transmission and distribution system upgrades or expansions will likely be needed to support continued large-scale renewable development of various technologies. For large-scale wind energy development, there exists large undeveloped wind resources in some parts of the State, but insufficient bulk transmission98 system capacity exists to move all the energy output throughout the State. This potential bottlenecking of renewable resources could thwart steady progress towards the States renewable energy goals and the attendant benefits. Further, in certain instances the operation of one renewable energy facility may displace output from other renewable energy facilities when both facilities need space on the same transmission lines. On a local level, installation of large solar projects within particular local electric networks may require upgrades to help ensure that power surges or other reliability concerns are not created as a result. See Chapter 4 for further discussion and recommendations on infrastructure needs.
As noted above, the vast majority of large-scale renewable projects participating in the RPS Program to date are wind projects, most of which are located in northern and western New York where wind resources are greatest. While these projects are providing benefits to the State and helping meet the RPS goal, they are located far from the major load areas of the State, which are also areas of the State in non-attainment of federal air quality standards. As such, it would be advantageous to target efforts to develop resources closer to or in these areas. Examples of such targeted efforts include development of offshore wind resources, which can readily provide electric energy to the New York City and Long Island population centers, and the continued research and ultimate market development of tidal, current and other hydrokinetic resources. As with conventional renewable energy development, ensuring the appropriate transmission line interconnections to bring such marine-based energy onshore will become an essential component of such development. In addition to these large-scale renewable projects, a targeted 97 PSC. Case 03-E-1088, Proceeding on Motion of the Commission Regarding a Retail Renewable Portfolio Standard Policy, Comments of the New York State Energy Research and Development Authority: State Administrative Procedures Act (SAPA) 03-E-0188SP22. Submitted November 23, 2009.
98 Bulk transmission is a functional or voltage classification relating to the higher voltage portion of the transmission system.
Support Development of In-State Energy Supplies 51 deployment program for solar-DG technologies downstate could help to alleviate some of the concerns with geographical distribution of RPS Program resources.
The current RPS Program has provided good value for the investment to date, both in the cost-effectiveness of the Main Tier Program and the ability to provide diversity of investment - with the attendant market development benefits - in the Customer-Sited Tier. As noted above, the Plans modeling has shown that achieving the 30 percent goal will result in a net reduction in wholesale electricity prices, and will provide substantial benefits to the State in avoided air emissions and transitioning to a lower-carbon energy system. Additionally, continuation of the RPS has been recommended in both the Governors Renewable Energy Task Force Report and the RPS Program Evaluation Report.
Recommendations Encourage in-state renewable energy development through the RPS.
o Expand the RPS Program to adopt the Governors goal to meet 30 percent of the States electricity needs with renewable resources by 2015, taking into consideration the voluntary market and other renewable energy initiatives of the States energy authorities and agencies.
o Enhance certainty in the renewable energy market by scheduling regular solicitations for Main Tier procurements. Consider more flexible solicitation schedules, other than the standard 10-year contracts, to accommodate changing market conditions.
o Create a tracking and trading system for RECs to foster development of a robust voluntary market for REC purchases and to help ensure integrity in measuring compliance with the RPS.
o Continue to provide RPS incentives for environmentally beneficial, renewable DG resources, including CHP, with specific targets determined by the PSC, funded through the Customer-Sited Tier and identify opportunities for targeted DG deployment that may serve to reduce the need for peaking power plants in load pockets.
o Examine the transmission system to identify and evaluate bulk transmission system upgrades or expansions needed to allow for reliable delivery of the energy output from renewable energy systems.
Complement the RPS Program with Bilateral Contracts While much progress has been made toward the existing RPS goal, additional mechanisms for attracting in-state renewable energy development can be further utilized. For instance, PPAs could be enhanced to continue progress in achieving renewable energy goals, while working to minimize ratepayer impacts.
Recommendations Encourage the States power authorities to procure diverse renewable electricity resource development, including solar, onshore and offshore wind, hydrokinetic and sustainably managed biomass.
o NYPA and LIPA will report on the status of renewable energy projects in progress.
Support Development of In-State Energy Supplies 52 o NYPA and LIPA will report on the total energy production capacity provided by renewable energy initiative projects including the electric capacity installed using renewable energy and purchased attributes by NYPA or on behalf of customers.
o Investigate options for cost recovery mechanisms for renewable energy projects that minimize ratepayer impacts.
o LIPA and NYPA will pursue development of large-scale solar projects as expeditiously as possible. Based on the experience of these initiatives, LIPA and NYPA should consider achievable targets for subsequent PPAs.
o LIPA will develop a Renewable Resource Center as part of the Smart Grid Corridor with smart meters installations for residential, commercial, and industrial customers.
Encourage LIPA and NYPA to continue with issuing an RFP for the private development of offshore wind resources (in the waters off of Long Island and in the Great Lakes) in a manner protective of natural resources.
o Provide annual reports on the status of offshore wind projects.
o Provide financial and technical support through other available State and federal resources.
o NYPA will complete the Request for Proposal process for offshore wind projects in the Great Lakes.
o The Long Island-New York City Offshore Wind Collaborative will issue a Request for Proposal for development of an offshore wind facility off the Rockaway Peninsula.
Facilitate the Deployment of Distributed Renewables A number of policy approaches have been adopted in New York to overcome the cost, technical, and regulatory challenges associated with deploying renewable resources. Some of the approaches are not fully accomplishing their intended purpose and can be improved. For instance, net metering provides an incentive to end-users to install solar-PV, anaerobic digesters, and wind energy systems. However, the peak demand limit on non-residential installations is presenting a new set of challenges. First, not all non-residential customers have a demand meter, making it difficult to determine the customers peak demand. This has led to disagreements between customers and utilities over determinations of peak demand and thus the size of eligible systems that can be net metered. Second, depending on a customers load profile, a system limited by their peak demand could result in a system that is insufficient to meet the customers full energy requirements. Additionally, the PSC has standard interconnection requirements that are intended to guide the interconnection of renewable systems to the grid. However, the interconnection requirements provide some level of discretion to the utilities, which reportedly have created challenges to deployment of distributed resources.
There are numerous public buildings in the State that could be host sites for distributed renewable systems. The State Asset Maximization Commission identified these sites as an opportunity for a public-
Support Development of In-State Energy Supplies 53 private partnership to increase deployment of distributed renewables and reduce energy costs at State facilities, and/or potentially present opportunities for lease revenue to the State.99 Recommendations Facilitate the interconnection of DG resources to the electric grid.
o Amend the net metering law to provide greater flexibility to non-residential customers to size systems to meet a greater percentage of their energy requirements, while ensuring that system reliability is not negatively impacted.
o Examine the protocols used by the NYISO and utilities for connecting DG sources to the grid to assure fairness and efficiency.
Assess the potential for siting renewable energy projects, including wind, solar, geothermal, hydrokinetic and hydropower on those State-owned lands and waterways where such development would not require a constitutional amendment.
o Inventory and analyze opportunities for renewable energy development on State-owned lands and waterways.
o Develop a process for installing renewable energy technologies on State facilities, particularly those that are energy intensive, and have open space and/or compatible roofing. Renewable energy deployment in State Parks should be limited to appropriately scaled installations that are compatible with maintaining natural, historic, and recreational resources.
Target the Deployment of Non-Electric Generating Resources The States financial incentive programs have predominantly focused on the development and deployment of renewable technologies that generate electricity. While the electric generation sector accounts for the majority (40 percent) of primary energy consumption in the State, it is also critical to support the non-electric primary energy sectors. The transportation sector accounts for approximately 40 percent of New Yorks CO2 emissions. To date, most of the financial incentives and regulatory programs affecting this sector have been at the federal level. This has resulted in an unsteady stream of funding for clean transportation initiatives and has resulted in most of the biomass feedstock for in-state biofuels production being supplied from out-of-state. A New York-specific strategy could help target incentives for the preferred feedstocks that provide New York with the most environmental and economic benefits.
Today the transportation sector relies heavily on petroleum, but technological advances will facilitate a shift away from this dependency through improved efficiency and the use of renewable fuels. Hybrid technologies have already greatly improved the fuel economy of vehicles, and the next stage of hybrid technology - PHEVs - show tremendous promise. PHEVs, which use batteries that can be recharged via electricity from the grid, provide greater fuel economy - often greater than 100 miles per gallon - and could therefore dramatically reduce fuel use and emissions from vehicles. If coupled with Smart Grid 99 New York State Commission of State Asset Maximization, Final Report. June 2009.
http://nysamcommission.org/pdf/SAM_FINAL_REPORT.pdf
Support Development of In-State Energy Supplies 54 technologies, PHEVs can also be integrated with the electricity grid and called on when plugged in to provide power back to the grid if necessary. Currently, PHEV technology is still developing and wide-scale deployment is not expected over the early years of the planning horizon. However, government actions, including research and development support and government purchases, can increase deployment. For example, in LIPAs proposed 2010 budget, there is funding allocated for incentives for the purchase of PHEVs. Hybrid technologies coupled with the use of renewable fuels would provide even greater environmental benefits.
Building upon existing facilities and vehicles, the public sector fleets offer an opportunity to be "test-beds" for alternative fuels and vehicle technologies. Due to the myriad operating conditions public fleets experience, alternative fuel technologies can be tested under a wide range of weather and other conditions. These fleets also provide markets for potential "niche" fuels and technologies. This could include continuation and expansion of New York's leadership role in compressed natural gas vehicles (both light duty and heavy duty), as well as expanding the use of biofuels and electric vehicle technologies. New York can work with other states and with transportation and energy associations to influence vehicle manufacturers to produce alternative fuel vehicles of all types (light duty and heavy duty). Having a variety of vehicle types to meet their needs will allow public and private sector fleets to expand their use of these vehicles Technologies such as solar thermal and geothermal heat pumps can significantly reduce fossil fuel energy use in buildings. Given the States heavy reliance on oil for space heating and hot water, these technologies have the potential to drastically reduce CO2 emissions and other pollutant emissions from the buildings sector. While these technologies are relatively mature and have been deployed widely in other parts of the world, penetration has not occurred on a wide scale in New York. In addition to the financial incentives, greater deployment of these technologies will require increased public awareness and a trained workforce (workforce needs and recommendations are identified in Chapter 5).
Recommendations Increase use of alternative fuels.
o Determine the optimal fuel(s) for a substantial replacement of petroleum, considering environmental, economic and energy benefits.
o Provide financial incentives for alternative fuel infrastructure development.
o Encourage public and private fleets to purchase alternative fuel vehicles through incentives and mandates.
o Educate end users on the economic and environmental benefits of alternative fuels.
o Work with New York Congressional Delegation and transportation organizations to support federal and State tax incentives for fleet and private individual alternative fuel vehicle purchases, including infrastructure development.
o Where practicable, adopt a regional low carbon fuel standard.
Support bioenergy production from sustainably managed feedstocks.
o Complete the Biofuels Roadmap.
Support Development of In-State Energy Supplies 55 o Analyze bioenergy options and identify strategies for promoting the most sustainable/highest value use of biomass as part of the Climate Action Plan.
o Establish a wood boiler change out program to remove the high emitting and poor performing systems from the marketplace.
o Develop regional performance standards to accelerate the market introduction of new high-performance bioheating systems.
o Work with U.S. Environmental Protection Agency (EPA) and DOE to develop ENERGY STAR standards for the top tier of high-performance bioheating systems for residential and commercial applications.
o Provide financial and technical support to accelerate the market introduction of the top tier of bioheating systems - consistent with ENERGY STAR standards developed with EPA and DOE.
o Work with New York manufacturers to develop their capacity to deliver high performance bioheating systems.
o Provide training to ensure that New York State has a skilled workforce to deliver services and products.
Extend the tax credit for bioheat beyond the current expiration date of 2011.
Expand funding and implementation support for environmentally beneficial distributed energy resources (DER). Technical and financial support for DER should include solar thermal, geothermal heat pumps, and other resources that are economical and result in energy and cost reductions, improved energy security and reliability, and reductions in air emissions.
Furthermore, the State should design programs to increase public awareness of the benefits of using DER.
o Evaluate and provide appropriate funding mechanisms for existing renewable technologies.
o Ensure funding of next generation technology development and infrastructure.
3.2 Natural Gas 3.2.1 In-State Potential and Development Progress With the emerging recognition of the Marcellus Shale natural gas potential, there is a renewed interest in natural gas development in-state. At this time, in-state natural gas production from about 6,700 active natural gas wells supplies about five percent of the States requirements. The Marcellus Shale gas formation extends northeast from West Virginia, through Pennsylvania to southwestern New York, and holds great promise for future development. The Marcellus Shale's total gas in place is conservatively estimated to be approximately 168 trillion cubic feet, but the figure might be as high as 516 trillion cubic
Support Development of In-State Energy Supplies 56 feet.100 New York's portion of total recoverable gas remains unknown; however, the States natural gas production is expected to increase significantly over the forecast period due largely to the projected production from the Marcellus Shale formation. The States natural gas production is expected to more than double from 55 billion cubic feet in 2007 to about 146 billion cubic feet, representing about 11 percent of the States natural gas requirements by 2020. Although the addition of Marcellus Shale production is expected to result in a significant increase in New York production over the planning period, the natural gas model reflects a conservative Marcellus Shale natural gas production level to account for potential permitting and production difficulties related to horizontal drilling and hydraulic fracturing. If these difficulties are minimized, Marcellus production levels could potentially be much higher.
This resource presents an opportunity for the State to unlock substantial economic value while helping to achieve several of the Energy Plans key energy policy objectives. Increased supplies of natural gas in combination with natural gas efficiency programs will place downward pressure on natural gas prices, thereby potentially lowering the cost of energy for New Yorkers. In addition, by including local supplies of natural gas, risk of supply disruptions can be reduced, thereby improving system reliability as well as augmenting the States energy security. Further, New York-based natural gas extraction would create jobs, create wealth for upstate landowners, and increase State revenue from taxes and leases and royalties.
Development of State-owned lands could provide much needed revenue relief to the State and spur economic development and job creation in economically depressed regions of the State. In pursing this economic development opportunity, however, the State should first examine the development of mineral rights only for properties owned by the State which are located outside the Adirondack and Catskill Forest Preserves and State parklands under the jurisdiction of the Office of Parks, Recreation and Historic Preservation.
For development of the Marcellus Shale, horizontal well completions combined with hydraulic fracturing are likely to provide the best means for producing economic volumes of natural gas. While neither horizontal drilling nor hydraulic fracturing is new to natural gas development in New York, there are environmental concerns with respect to the effects of fracturing on water supplies, and disposal and contamination issues related to the chemical composition of the fluids used in the fracturing process.
Additional concerns regarding drilling in the Marcellus Shale focus on the potential local impacts to communities, including increased truck traffic, noise, aesthetics, and impact on quality of life. DEC regulations govern the well permitting, drilling operations, and well site restoration when drilling is completed. To assess the potential environmental concerns related to the development of the Marcellus Shale formation in New York, DEC is reviewing horizontal drilling and hydraulic fracturing in the context of a Supplemental Generic Environmental Impact Statement (SGEIS). A draft SGEIS was released by DEC in September 2009 that proposes a number of safety measures, protection standards, and permits for drilling activities.101 The public comment period on the draft SGEIS is open through December 31, 2009.
100 Geologists estimate that the entire Marcellus Shale formation contains between 168 and 516 Tcf of natural gas reserves and that roughly 10 percent of those reserves are economically recoverable. DEC. Marcellus ShaleGas Well Drilling in the Marcellus Shale. 2009. http://www.dec.ny.gov/energy/46288.html 101 DEC. Draft Supplemental Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program. 2009. http://www.dec.ny.gov/energy/58440.html
Support Development of In-State Energy Supplies 57 3.2.2 Challenges and Recommendations The extraction of projected economically recoverable reserves from the Marcellus Shale presents a unique challenge with regard to the construction of the pipeline facilities necessary to bring the produced gas to market. In the course of developing a conventional source of natural gas, a company would drill a well and only if that well is successful, would it submit an Article VII application to construct the associated pipeline. The technique used to tap into the Marcellus Shale may require that the gas be produced immediately once the well has been fractured and completed or the well may seal and cease to be productive. The Marcellus Shale formation has a high concentration of clay which makes it susceptible to re-closing if the gas does not flow immediately. As a result, some producers contend that the pipeline must be certified, built, and ready to accept gas before knowing for certain that the well will be a success.
The existing process for siting gas pipelines under Article VII of the PSL would likely accommodate this need.
Recommendation Support private interest and investment in drilling in the Marcellus Shale natural gas reserves and natural gas pipeline expansions to improve supply and deliverability of natural gas to markets in New York in an environmentally acceptable manner.
o Establish final DEC regulatory requirements for drilling and pipeline construction.
o Coordinate regulatory requirements for drilling and pipeline expansions.
o Study private investment in extracting natural gas in the Marcellus Shale on State-owned lands outside of the Adirondack and Catskill Forest Preserves and State parklands under the jurisdiction of the Office of Parks, Recreation and Historic Preservation.
Support Development of In-State Energy Supplies 58
59 4 Invest in Energy and Transportation Infrastructure New Yorks massive energy and transportation infrastructure is in constant need of maintenance and repair to keep the State from backsliding on its high standards of infrastructure reliability. Infrastructure investments are also necessary to support the States transition to a clean energy economy and will be driven by strategic longer-term needs, including the need to reduce GHG emissions. The key will be to guide infrastructure investment in a manner that is responsive to both environmental concerns and the economic welfare of the States residents and businesses while preserving efficient markets.
In the case of electricity infrastructure, the States delivery systems may be able to take advantage of cost-effective Smart Grid technology to increase system efficiency and prepare the State for the deployment of advanced appliances and electric vehicles. Transmission upgrades may also allow for fully exploiting the potential benefits of upstate wind resources, additional Canadian electricity imports, and new nuclear capacity, all of which can help meet the multiple policy objectives of the Plan. Electricity system investments will be developed and viewed within the context of the need to reduce local impact on host communities, especially potential environmental justice areas.
In the case of natural gas, enhancing pipeline delivery capacity in the downstate area would allow for conversions or repowering of power plants from oil to cleaner burning natural gas, while also meeting core gas demand needs. In the case of transportation, ongoing investments are necessary to maintain the system in good working order, and additional investments can be used strategically to reduce vehicle congestion, expand mass transit and encourage more efficient transportation systems.
4.1 Infrastructure Investment and Climate Change While New York is making solid progress toward reducing its GHG emissions, 102 and has identified specific strategies to reduce GHG emissions over the planning horizon, additional measures will be required to reduce GHG emissions by 80 percent below 1990 levels by 2050. These measures will be identified in a Climate Action Plan that will be developed pursuant to Executive Order 24. Achieving such a reduction in GHG emissions will require fundamentally transforming how we obtain and use energy, not only in the electric generation sector, but also in transportation, buildings and industry.
Infrastructure investments that are made over the next 10 years will last well beyond the planning horizon, and therefore decision makers should be mindful of how such investments will impact the States future ability to achieve GHG emission reductions.
102 New York State has taken aggressive actions to reduce CO2 emissions. These actions, which are on-going, include adopting and funding energy efficiency and renewable energy goals; participating in the RGGI CO2 cap and trade program; collaborating in the development of a regional low carbon fuel standard with neighboring states; promoting alternative vehicle fuels and vehicle demonstrations; developing ways to incorporate GHG emissions mitigation into SEQRA evaluations; supporting smart growth and climate smart communities development; and supporting demonstration of a carbon capture and sequestration coal-fired electricity generating project in Jamestown, New York.
Invest in Energy and Transportation Infrastructure 60 For any long-term GHG reduction plan that uses low carbon electricity as a key energy carrier, it is likely that New Yorks existing electricity infrastructure (generation fleet, distribution network, high voltage transmission lines, and substations) will not be fully adequate. Beginning the design and construction of the electrical system of the future now will allow for economical and efficient upgrades and additions without negatively impacting reliability.
Many transportation experts consider electricity to be the most viable low carbon fuel for light duty vehicles in the near-term. Expanding electrification of the transportation sector will help achieve GHG reduction goals by transitioning demand from high carbon-intensity liquid fuels, such as gasoline, to electricity generated from low-carbon-intensity energy sources such as hydro, wind, solar-PV or nuclear power. Electricity produced from low carbon energy sources can power vehicle batteries or light rail.
New York can continue advancing this transition by promoting research and development to achieve technological breakthroughs for hybrid electric battery technology and energy storage technologies - as the State is doing with the NY BEST Consortium - along with demonstrations to support infrastructure development.
Infrastructure investments over the planning horizon also need to consider the impacts of climate change, especially from sea level rise. Energy infrastructure at risk from higher sea levels includes electric generating and natural gas facilities, and electric and gas transmission and distribution wires and pipes. In addition to the direct effects of inundation or flooding, sea water contains salt, which can corrode equipment and undermine the strength of infrastructure. Inundation of power plants can result in total loss of service capacity for an area. Flood-induced outages to one centralized facility or primary cable path can result in total loss of service over an entire area and can lead to coincident cascade-effect outages to other facilities. Frequent flooding of electric and gas transmission and distribution wires and pipes can accelerate their deterioration, causing more frequent and longer lasting outages with extended repair times. As areas affected by storm surge expand, outage risks increase for those facilities that were not designed to withstand such events or adequately located to avoid such damaging events. Flooding can also impair access to underground gas and electric lines and equipment. These potential risks highlight the importance of utilities implementing Smart Grid technologies to identify system vulnerabilities.
Within the time horizon of this Plan, the State Sea Level Rise Task Force and the New York City Climate Change Adaptation Task Force will examine the needs and costs associated with implementing adaptive and protective measures to address the impending sea-level rise on the energy systems major components.
Recommendation Identify steps to mitigate and adapt to the impacts of climate change.
o Develop a Climate Action Plan in accordance with Executive Order 24. The Climate Action Plan will identify additional strategies and actions, including likely major infrastructure investments, as well as the benefits and costs of each, consistent with a long-term GHG reduction goal of 80 percent below 1990 levels by 2050. It should also identify appropriate mid-term targets.
Invest in Energy and Transportation Infrastructure 61 4.2 Electricity The NYISOs 2009 Comprehensive Reliability Plan concluded that currently proposed market-based solutions, together with implementation of planned upgrades to the bulk transmission system, would meet system reliability requirements through 2018. This means that markets and expected prices appear to be sufficient at this time to provide for generation and transmission resources to maintain reliability on a statewide basis throughout the Plans 10-year planning horizon. The markets locational prices have provided transparent price signals, which in a competitive environment have induced investment in newer and more efficient generation, as well as new transmission and demand response resources, in the locations where the resources are most valued.
The NYISOs conclusion that no generation or new transmission is required over the planning horizon is based on a load forecast that assumes that only 27 percent of the load reductions envisioned by the States 15 by 15 program are achieved and most of the existing resource base remains in place. Full and timely achievement of the 15 by 15 goal will likely push the reliability need date for new electric generation and transmission even further out in time, and thus underscores the importance of fully achieving the efficiency targets. However, the retirement of the existing resource base to comply with environmental regulations and GHG emission-reduction targets, among other factors, could move the reliability need date earlier. The need to replace aging infrastructure, implement Smart Grid technologies, and reduce GHG and other air emissions will require a measured approach regarding infrastructure investment over the planning horizon due to the upward pressure these combined programs would place on the cost of electric service.
4.2.1 Electricity Generation The State has a diverse mix of electricity generation sources, including coal, nuclear, hydropower, oil, gas and renewables. Statewide, fuel diversity safeguards against fuel supply disruptions and other factors which could pose reliability risks and/or cause significantly increased price levels and volatility. It is important to continue safe operation of nuclear, coal, natural gas, oil, and hydroelectric generation resources in ways that support the States energy, environmental and economic objectives. Over the planning horizon, there are a number of electricity generation infrastructure issues that will need to be addressed, including: (1) improving the power plant siting process to facilitate the deployment of renewable and other necessary resources, (2) reducing the climate impacts of coal, and (3) encouraging the repowering of existing facilities to improve the efficiency of the electricity system.
Market-based electricity prices have attracted new merchant generation infrastructure, primarily natural gas-fired combined-cycle plants, as well as imports from neighboring regions with surplus capacity.
Since 2000, over 7,600 MW of generation has been added in New York. Most of the generation infrastructure added upstate (about 3,800 MW, primarily the Athens and Bethlehem natural gas facilities and wind facilities) are merchant plants that rely on market-based revenue streams, though wind facilities also rely on RPS contracts and federal tax credits. Most of the plants added downstate (about 3,800 MW), however, have been added by NYPA or are supported by long-term contracts with Con Edison, NYPA or LIPA.
In recent years, the market has responded to environmental regulations with significant new natural gas power generation development, particularly downstate in load pockets where there are few alternatives to meeting both demand and environmental requirements. In these areas (New York City and Long Island),
many of these plants have dual fuel generation capability that allows oil to be used as a back-up fuel in the event of natural gas supply disruptions or sudden price increases. Oil combustion causes higher emissions than gas and should be limited (air permits for these plants limit the number of hours of oil
Invest in Energy and Transportation Infrastructure 62 combustion), but the continued availability of these dual fuel units plays an important role in maintaining system reliability.
Power Plant Siting It is anticipated that there will be power plant proposals by merchant generators over the planning horizon. The majority of these proposals are expected from wind developers in response to RPS solicitations and developers advancing repowering proposals. Experience has shown that the siting process for wind, as well as other generation, is left to a patchwork of local and State regulatory processes. This creates an uncertain siting process that can cause undue delay, project uncertainty, and ultimately could put New York at a disadvantage compared to other states that are competing for renewable energy investment.
The current process used to authorize the siting, construction and operation of electric generating facilities is a combination of the local land use regulatory process and State agency environmental permits processes, with an overlay of the procedures of the SEQRA. Although these processes have been utilized recently to successfully site over 1,000 MW of wind facilities and 325 MW of gas-fired generation, with another 3,000 MW of wind projects and another 1,100 MW of natural gas-fired generation currently undergoing review, there are various public and private interests that the SEQRA process and existing State and local laws do not address.
A primary interest of the State is to help ensure an efficient and timely review process for siting needed electric generation facilities that incorporates support for public participation. While the SEQRA overlay ensures that State and local decisions affecting the environment will minimize any adverse impacts associated with electric generating facilities and provides for public participation, it does not establish a decision-making schedule or provide for intervenor funding. The concern for complying with multiple State and local requirements, addressing environmental issues, and supplying intervenor funding, could be consolidated into a single proceeding before a State body, similar to the authority provided to the Siting Board in the former Article X (which expired in January 2003). This could also include a requirement that a decision be rendered within a specified period.
Although several different bills have been introduced in the State Legislature to reauthorize a comprehensive electric generating facility siting process, the key terms have not been agreed upon. The main points of disagreement revolve around the types and sizes of facilities to which the law would apply, the amount and acceptable uses of intervenor funding, and the obligation to consider environmental justice issues, and the obligation to conduct an assessment of cumulative impacts. While these issues should be resolved among interested stakeholders, the following key provisions should be included in comprehensive electric generation siting law: a one-stop siting process that combines State and local authorizations into a single approval; a time-certain framework for rendering a decision on an application; authorization to override the application of unreasonably restrictive local laws; opportunities for extensive public input; and the availability of intervenor funding for expert witnesses and consultants.
Recommendation Improve the siting process for generators.
o Develop a fuel neutral power plant siting law that provides greater market certainty to developers and investors and enhances public participation with sufficient intervenor funding made available to local communities, including improved notice provisions, and addressing environmental justice issues.
Invest in Energy and Transportation Infrastructure 63 Long-Term Viability of Coal The United States relies on coal for half of its electricity needs, and New York has a significant percentage of coal in its electricity generation mix, adding to fuel diversity. Moreover, the use of coal is increasing in the developing world. It has been reported earlier this decade that China was bringing on line a coal plant every week.103 As coal is the most carbon-intensive fossil fuel, technologies are being developed to capture and permanently store CO2 emissions from coal plants in deep geologic formations.
Carbon capture and sequestration (CCS) technology is being supported at the federal and state levels, and could be an essential component of any long-term GHG reduction strategy for the United States and the rest of the world. New York is supporting the development and demonstration of CCS by providing geologic research assistance and financial support for a proposed demonstration project in Jamestown.
The successful demonstration of CCS in New York as an operationally and economically viable means to mitigate coal generation GHG impacts may allow New York to retain coal in its generation mix in a way that is consistent with GHG reduction goals. But, perhaps more importantly, the successful demonstration of CCS could, if deployed widely, substantially mitigate climate impacts from the use of coal and other carbon-intensive fuels in the developing world.
Existing law does not directly address the siting or regulation of a CCS reservoir or captured carbon pipeline. However, there is existing law that can serve as a model for CCS siting and regulation. Article VII of the PSL, which governs the siting of new electric and gas utility transmission facilities, and provides the PSC with exclusive authority to site such facilities, can be amended to expressly include CO2 pipelines. Article 23 of the Environmental Conservation Law authorizes the regulation by DEC of oil and gas wells and the underground storage of natural gas. The law governs the drilling of wells, the process by which developers must obtain permission from surface landowners, and the injection and storage of gas. Injection of CO2 into geologic formations is similar to the process for injecting natural gas for storage, except that CO2 will be stored permanently underground. In 2009, Governor Paterson submitted a bill to the legislature to provide the statutory framework for siting and regulating a CCS demonstration project that is modeled after Article 23 and amends PSL Article VII accordingly.
Recommendation Facilitate demonstration of CCS technology.
o Develop legislation that addresses CO2 pipeline siting and CO2 injection to facilitate the demonstration of CCS technology.
Nuclear Power Nuclear power plays a significant role in meeting New Yorks energy needs. Nuclear capacity - sited, built and operated appropriately - supports key State interests. The Plans modeling results demonstrate that increasing the States nuclear capacity will benefit the State by lowering both wholesale prices and GHG and other emissions, and it therefore may play an integral role in the States efforts to address climate change. Despite these benefits, there are concerns over the disposal of waste from nuclear facilities. Though a federal repository sited at Yucca Mountain in Nevada has been proposed to the Nuclear Regulatory Commission by DOE, until this site is approved and constructed, reactor sites must 103 Massachusetts Institute of Technology. The Future of Coal - Options for a Carbon Constrained World. 2007.
Invest in Energy and Transportation Infrastructure 64 hold their own spent fuel on site. Care must be taken to help ensure that this spent fuel is securely held and any potential for harm to public health or the environment is minimized.104 Going forward, nuclear power generation should be encouraged within New York where safety, security, and environmental conditions favor its deployment and operation, and retained where it can be demonstrated that the safety and security of its operation can be maintained and its adverse environmental impacts minimized.
At the same time, the State recognizes that there are safety, security and environmental impact concerns related to the two active reactors at Indian Point, located along the Hudson River in northern Westchester County. New York is opposing the license renewals of Indian Point Units 2 and 3, whose current 40-year license terms are set to expire in 2013 and 2015, respectively, due to significant safety and environmental impacts associated with their operation.105 These concerns include the adequacy of the evacuation plan in the event of a sudden, fast moving radiological event in an area of high population density; the risk of a terrorist attack on the spent fuel pools, which are located in buildings adjacent to the containment structures; the impact of earthquakes on the integrity of the facility, the possibility of which are better analyzed with more modern geological methods than existed when the plants were first licensed; and the impact on aquatic life from the use of 2.5 billion gallons of Hudson River water each day which is used to cool the facility and then discharged back into the Hudson River at higher temperatures. These issues must be fully evaluated and addressed in order to protect the health and safety of the communities surrounding the plant.
From a reliability perspective, Indian Point currently provides voltage support and system capacity to help ensure there is sufficient energy to supply demand in the downstate load pocket. With the issuance of this Plan, the State has begun to identify the potential impacts associated with the possible closure of Indian Point and the infrastructure needs that would be necessary to maintain system reliability standards in that event. As discussed in more detail in the Energy Infrastructure Issue Brief, modeling indicates that the retirement of the Indian Point units may present tradeoffs, including higher electricity prices and CO2 emissions, and that achieving the States 15 by 15 energy efficiency target reduces, but does not eliminate, the need for replacement infrastructure in the vicinity of Indian Point. As assumed in the modeling, if 15 by 15 is achieved, one possible replacement option under these circumstances would be a 700 MW combined cycle, gas-fired generating plant connected directly to the Buchanan 345 kilovolt substation. Under the Starting Point case (which assumes only 27 percent of the 15 by 15 energy efficiency target is achieved) modeling shows a need for 1,800 MW of replacement power in the vicinity of Indian Point to maintain reliability. It is unclear, however, whether new natural gas pipeline capacity would be needed for such a facility. In addition, further study may be necessary to quantify the potential impacts of closing Indian Point on: (1) the ability to transfer power to downstate load areas; (2) the transfer capability of the transmission system into the area; (3) reactive power resources in the lower Hudson Valley; and (4) overall system reliability.
Under the relicensing schedule for the Indian Point units, it is anticipated that the earliest a decision could be made is the Spring of 2010, although this time frame could be significantly extended. If Indian Point is not relicensed, then the NYISO, the PSC, and involved utilities will need to engage in a process to develop various scenarios for replacement generation as well as associated transmission and pipeline infrastructure needs.
104 The DOE Secretary of Energy, Dr. Chu, has noted that there may be alternatives to this national repository. However, at this time, DOS has not withdrawn its application from Nuclear Regulatory Commission.
105 On December 3, 2007, the New York State Department of Environmental Conservation and Attorney General Andrew Cuomo filed a petition with the Nuclear Regulatory Commission that opposed relicensing. The petition is available at http://www.oag.state.ny.us/media_center/2007/dec/brief.pdf.
Invest in Energy and Transportation Infrastructure 65 Repowering Repowering of existing power plants under the right circumstances can provide environmental and economic benefits. For example, NRG has proposed repowering of its Astoria facility in New York City and has estimated that the repowering would result in a reduction of annual on-site air emissions of over 75 percent for NOx and CO and over 50 percent for particulate matter, while simultaneously increasing power output by over 70 percent. In addition, NRG estimates that the repowering would displace 1 million tons of CO2 emissions annually. An effective siting law may help facilitate the construction of new or repowered generating units where they are economically warranted.
Recommendation Support the use of repowering and replacement of existing units with new facilities when such actions can be justified by their reliability, economic and environmental benefits.
o Encourage and facilitate the repowering and replacement of existing electric generation to increase efficiency and reduce overall actual emissions and environmental impacts, particularly in potential environmental justice communities.
4.2.2 Electricity Transmission and Distribution The States investor owned electric utilities currently have net investment plans of over $20 billion. The majority of this investment represents the transmission and distribution system. While the current investment is very large, longer run considerations indicate that much greater investments are needed in the future.
The Replacement and Expansion of Existing Transmission and Distribution Infrastructure Because New Yorks electric infrastructure is old, significant capital investments will need to be made in the utilities electric transmission and distribution systems to meet future electric demand and allow them to continue to provide reliable service. Replacement and improvement of existing aging infrastructure are critical, as system failures not only raise safety and reliability concerns but can also lead to increased system congestion and therefore higher emissions and costs. While these incremental investments will put upward pressure on rates, the PSC will also need to consider whether it is more effective and efficient in some cases to make investments in solar-PV or other customer-driven resources to address localized reliability issues. For New York City in particular, this should include an assessment of its uniquely designed distribution system to evaluate options for allowing the development of clean renewable, customer-driven resources in a manner that maintains reliability. The development of such clean energy in New York City is particularly beneficial given the size of its overall load and ongoing air quality issues.
In total, the investor-owned utilities project that infrastructure investment for the entire State could be over $13 billion for the next five years (2009 through 2013) as compared with about $8.5 billion over the prior five years (2004 through 2008). This level of capital expenditures over the next five years will put significant upward pressure on rates. There is, therefore, a strong need for the PSC to carefully scrutinize the capital expenditure plans of the investor-owned utilities and a strong need to balance the potential benefits of any new State policies and actions against their aggregate impact on the State and its ratepayers.
Major additions to the States transmission system, while not called for to meet reliability needs, may be driven by several factors, including the expected net economic benefits in the form of lower statewide
Invest in Energy and Transportation Infrastructure 66 production costs, or the need to eliminate or reduce transmission constraints on the existing system. For example, as more wind comes on line upstate, it may be beneficial to New York as a whole to invest in infrastructure that would facilitate delivery of that power to the areas of the State with higher demand.
The States clean energy policy goals, which will increase the contribution of renewable resources in meeting electricity requirements, may also require construction of new infrastructure, irrespective of near-term reliability or economic benefits. In such circumstances, the viability of those projects should account for all relevant considerations including costs and impacts of clean energy sources on system reliability.
Multiple planning efforts are underway in New York to assess the status and needs of the electricity infrastructure. Such efforts generally have used consistent assumptions, although further coordination may be appropriate. Interregional transmission planning and participation in the proposed Eastern Interconnection Planning Collaborative is an example of such coordination. Additionally, the New York Transmission Owners have initiated a long-term transmission study, the New York State Transmission Assessment and Reliability Study (STARS) to identify a long-term pathway to: meet the growing electric power needs of New York; encourage the addition of significant renewable energy sources in New York and the surrounding areas; and address an aging infrastructure. Early results of STARS are expected by the end of the fourth quarter of 2009. DPS is monitoring each study and will evaluate the results of each and recommend PSC actions as appropriate.
Recommendation Systematically examine and evaluate the State's transmission and distribution infrastructure and maintain its emphasis on appropriate replacement and upgrade of aging infrastructure to maintain safe and adequate service and also increase the efficient utilization of the electric system, while minimizing, where possible, upward pressure on rates.
o LIPA to implement a $500 million, 20-year program to reduce electrical transmission and distribution system exposure to severe storms.
o Complete a LIPA and National Grid assessment of the LIPA transmission and distribution assets system health review to formulate strategic goals to maintain infrastructure reliability.
o Complete the STARS to identify the long term transmission reliability needs of the New York Control Area.
o For needed transmission system upgrades or expansion, address cost allocation issues.
Transmission Siting Practical experience with the implementation of PSL Article VII has revealed the need for certain amendments. While PSL Article VII requires compliance with the substantive provisions of all applicable State laws and supplants the procedural requirements associated with those laws, in practice, it is difficult for the PSC to administer compliance with the New York State Uniform Fire Prevention and Building Code due to the lack of expertise required to do so. Therefore, an amendment to PSL Article VII should be pursued to specifically indicate that State or local approvals, consents, permits, certificates or other conditions for construction and operation of an Article VII facility shall apply in connection with application of the New York State Uniform Fire Prevention and Building Code. This amendment, which would provide for the limited application of the procedural requirements associated with this law, is
Invest in Energy and Transportation Infrastructure 67 appropriate since such approvals are ministerial in nature and are best left with State and local governmental entities that already administer the code and can best ensure compliance.106 One of the weaknesses in Article VII is that it is difficult for intervenors to meaningfully participate in the transmission facility siting process. This weakness was recently remedied through passage of legislation.107 PSL Article VII now requires that an application to construct such facilities shall be accompanied by a fee, which can be used to defray intervenor expenses associated with hiring expert witnesses and consultants. This approach is similar to the intervenor funding mechanism for applications to construct major electric generating facilities that existed under PSL Article X (expired January 2003).
Intervenor funding for Article VII means there will be more meaningful participation by intervenors, particularly those without resources to actively engage in the Article VII process, intervenor funding also benefits ratepayers by contributing toward a more informed decision as to the appropriateness of the route and the facility.
Recommendation Amend PSL Article VII for siting of transmission lines and pipelines to indicate that State or local approvals, consents, permits, certificates or other conditions for construction and operation shall apply in connection with the States Uniform Fire Prevention and Building Code.
Using Existing Rights-of-Way In order to construct new infrastructure facilities, a developer will often need to obtain property interests in a right-of-way across public or private lands. Absent the right of eminent domain, this need may present challenges for a developer in terms of the cost and time required to obtain such rights-of-way through negotiations with numerous property owners. However, the use of existing rights-of-way may reduce the time and costs to the developer, and obviate the need to acquire rights to private and/or public lands.
Moreover, the use of existing rights-of-way may present several environmental advantages from the States perspective. In evaluating the acceptability of a new transmission line, the State is required to look at various alternatives, which may include the use of linear property interests. These property interests may present viable alternatives that avoid and/or minimize environmental impacts.
The primary task in maximizing the use of rights-of-way is to identify where such rights exist.
Accordingly, a study is recommended to inventory existing rights-of-way, such as existing utility corridors used for electric, gas, water and telecommunications facilities that are underused, or can be expanded to accommodate new facilities, including Smart Grid technologies, along with highways, railroads, and waterways. This study should also evaluate and assess the risks and cost implications associated with utilizing such rights-of-way. The study may build off of existing efforts to evaluate rights-of-way, such as the STARS study, referenced earlier.
It is envisioned that a study of rights-of-way will assist in developing policy initiatives to achieve the maximum use of these rights-of-way, including whether to pursue an amendment to the States accommodation policy with the Federal Highway Administration (FHWA), which currently prohibits the linear co-location of utility facilities, other than telecommunications, within the highway right-of-way, 106 A similar provision should also be explored in connection with the reenactment of PSL Article X.
107 Chapter 349 of the Laws of 2009.
Invest in Energy and Transportation Infrastructure 68 unless an exception is granted. This amendment could provide for the linear co-location of underground utility facilities in highway rights-of-way.
Efforts should also focus on establishing and maintaining a comprehensive database of rights-of-way.
While various State agencies, such as DOT and the PSC, currently maintain databases of certain rights-of-way, these compilations are not comprehensive. Therefore, interested State agencies and property owners should cooperate in identifying these property interests, which will allow project developers and State regulators to ascertain the suitability of potential alternatives through a shared database.
Recommendation Investigate use of existing rights-of-way.
o Inventory existing transportation corridor rights-of-way that could be used for new energy infrastructure facilities and existing utility corridors that are underutilized or could be re-configured to accommodate new facilities. Improve and coordinate efforts to identify and promote the use of linear property interests for use of existing and siting new electric and gas transmission facilities.
4.3 Natural Gas New Yorks aggregate natural gas demand is expected to increase over the 10-year planning period, driven largely by growth in the residential and commercial sectors. Reliance of electric generation on natural gas coupled with the almost total dependence on interruptible delivery services for that supply raises reliability concerns, particularly during times of peak gas system demand. To assess the adequacy of the natural gas delivery system properly, the natural gas requirements of the electricity generation, residential, commercial, and industrial natural gas customers were considered together and compared to available pipeline delivery capacity at peak periods. Modeling of the natural gas system was performed to examine four market scenarios that stress the natural gas system (repowering of aging oil-fired units to gas combined cycle and retirement of the Indian Point facility). The modeling results show that the capacity of interstate pipelines to transport sufficient natural gas to meet peak day demand is a concern, particularly for the downstate area. Under each scenario, available pipeline capacity in the downstate area is essentially fully utilized during peak day demand periods throughout the forecast period. Additional pipeline capacity will be needed to continue to reliably meet demand.
Capacity constraints in the downstate market are of particular concern and the local distribution companies who provide service to the area have identified a need to add delivery capacity into their service territories. Planned pipeline additions for new delivery points into the downstate market, if built, would significantly relieve capacity constraints, increase reliability and reduce the volatility of spot market gas prices and the delivered price of natural gas into the market. The addition of such new delivery points would directly benefit not only natural gas ratepayers, but also downstate electric ratepayers. Methods to have all beneficiaries share the cost of the pipeline capacity additions should be explored. As noted earlier there is particular value to the electric system and its customers in the continued availability of dual fuel electric generation capability in the New York City and Long Island area.
The planning, regulatory approval, and construction processes for new pipeline and liquefied natural gas (LNG) projects can take many years. Delays can represent significant obstacles to constructing the needed natural gas infrastructure to meet growing natural gas market demand. The State can streamline the natural gas infrastructure permitting process by: (a) providing project developers rigorous, pre-
Invest in Energy and Transportation Infrastructure 69 application, all-agency evaluations of State and local project siting, environmental and safety concerns; and (b) maximizing agency coordination during permitting proceedings. By providing early indications of acceptable sites, projects that can help meet projected demand while satisfying environmental and safety concerns, can be encouraged.
Analyses have been conducted to assess the ability of the natural gas system to meet the future electric generation natural gas demand. Results indicate that some electric load may not be served due to the lack of natural gas delivery capacity. Further analysis will continue to assess the magnitude and the impacts to the electric system from this unserved load. Additionally, since the models assume that all elements of the gas system are operating as designed, the vulnerability of the State from pipeline or compressor failures should be examined as part of a separate contingency analysis.
Based on the natural gas modeling runs, the natural gas system appeared to be strained with conditions such as: (1) Indian Point being retired and replaced by a combined cycle natural gas plant; (2) a significant amount of repowering of downstate dual fuel units that use residual oil as a backup; (3) a much colder than normal winter; and (4) and a combination of the three. If any of these conditions occur, alone or in combination, various elements of the natural gas system and the electric system should be monitored and, if necessary, actions should be taken to mitigate the risks. Examples of the critical elements to monitor include: the natural gas storage drawdown rate; LNG imports into New England; both electric and natural gas imports from Canada; electric generation versus demand and the possible need to shed electric load; and electric generators ability to continue to use distillate oil backup beyond the limits of environmental permits.
Additionally, the analyses indicate that the electric system appears to be vulnerable on peak winter days due to the lack of natural gas delivery capacity.108 Policies may be needed to encourage new combined cycle units to be equipped with backup distillate fuel oil capability. New combined cycle units are significantly more efficient than existing steam units, thus lowering natural gas consumption per megawatt-hour generated. Pursuing a policy for back-up fuel capability provides the State the benefit of improved generation efficiency while mitigating risk by increasing fuel diversity.
4.4 Petroleum Fuels Petroleum fuels such as motor gasoline, home heating oil, diesel fuel, and residual fuel oil are vital to New Yorks economy and remain the single largest source of energy used in the State. New York is the fifth largest market for liquid fuels in the United States, and more than 90 percent of the States supply is imported. Dependence on petroleum fuels in certain sectors - for example, transportation - exposes consumers to price volatility and potential delivery disruptions. It is critical that the infrastructure required to store, handle, blend, and dispense the wide-range of petroleum and petroleum blended fuels be adequate to meet user demand. The petroleum infrastructure includes the delivery system of trucks, barges and pipelines as well as the retail refueling outlets and large primary and secondary bulk storage facilities. This will become increasingly important as liquid fuel composition evolves to include higher percentages of biofuels, such as biodiesel, bioheating oil, and ethanol for gasoline blending. The significant construction costs, space limitations, multiple fuel types, and potential local siting 108 The modeling process is based on economic dispatch and does not take into account the NYISO gas-electric coordination protocols between gas pipelines and generators that are designed to help identify possible winter and summertime natural gas curtailment conditions and establish a process for generators to seek emergency gas supplies if necessary.
Invest in Energy and Transportation Infrastructure 70 considerations make it imperative that New York flag potential issues related to the adequacy of storage capacity for evolving fuel blends.
For a number of years, petroleum product distribution companies throughout the State have expressed concern over the long-term decline in the number of storage terminals and associated storage capacity.
One consequence of the lower storage capacity volumes is that suppliers may not be able to respond quickly to spikes in demand that occur because of extreme cold temperatures and unexpected weather conditions. Petroleum storage terminal facilities face many of the same environmental, land use, and economic pressures that affect many other businesses. However, beginning in 2007, the amount of New York storage capacity dedicated to distillate fuels has increased. In certain parts of the State, including Long Island, the petroleum distribution industry has responded to market signals and added tank capacity to meet demand.
The Port of New York, with large petroleum storage terminals located on both the New York and New Jersey sides of the harbor, is an important component of the States petroleum infrastructure. These deep water terminals receive a steady flow of refined petroleum products and crude oil from domestic and foreign sources. New York also receives petroleum products from several pipeline systems that connect terminals located throughout the State to the major refining centers located along the Gulf and East Coasts. Additionally, crude oil is used by refineries located in the Mid-Atlantic region to produce refined products for the northeastern United States. Once refined fuels arrive at these facilities or are produced at the regional refineries, they are distributed by pipeline, barge, and truck transport to smaller coastal and inland terminals for further distribution to customers through retail distribution channels. The continued, uninterrupted operation of this complex distribution system, with its ability to receive, store, and distribute millions of gallons of the various fuels per day, is of critical importance to New York.
Long range solutions to reduce New Yorks exposure to price volatility and potential delivery disruptions of liquid fuels must include a variety of strategies to reduce significantly the States use of these fuels.
Since the transportation sector accounts for approximately 80 percent of this usage, energy efficiency and fuel-switching programs will be targeted to this sectors use of petroleum-based fuels over the planning horizon.
4.5 Transportation Keeping New Yorks diverse, multi-modal transportation system in good working order is vital to the State's economy and environment. The reliable flow of people and goods means less congestion, less pollution, less fuel use and improved quality of life. A transportation system in good working order also improves safety and reduces vehicle wear and tear, lost time, delivery costs and system user stress. The DOT System Performance and Asset Management Bureau has estimated that in 2007, congestion-related delays on State-owned highways cost New Yorkers $9.6 billion.
Despite the congestion, the States transportation infrastructure, in general, is functioning well. For example, of the 19,500 bridges in New York, only 100 are closed. This is a testament to the States ongoing focus of fix-it-first to preserve the investments that have been made in the States transportation system.
In 2006, New York received about $19.8 billion to maintain, operate and improve its transportation system; the majority of which was self generated or derived from local sources. Typically, only 15
Invest in Energy and Transportation Infrastructure 71 percent of New Yorks transportation funds come from federal sources.109 Of that funding, 58 percent supports public transportation, and another 29 percent is being spent on the highway system. Other modes receive a comparatively small amount of this funding. Currently, the vast majority of transportation funding is programmed to maintain and operate the system. This necessary level of commitment to maintenance of the system is expected to continue, if not increase. This reality makes any substantial expansion of the system in any of its varied modes difficult to achieve.
Energy efficiency in the transportation sector can be enhanced by actions at the federal level through legislation, regulation and policy. Federal legislation related to climate change and surface transportation re-authorization can further enhance New Yorks status as the most transportation energy-efficient state.
Infrastructure investments should include state-of-good repair of the existing system, which favors the maintenance of existing roads and highways instead of building new ones, and strategic new transportation investments to attain the States goals. Additional investments to support energy-efficient transportation include those that support public transportation and rail (including freight) facilities and provide effective linkages between different transportation modes. The State should also implement strategies to increase freight rail movement of goods, such as providing new intermodal facilities, rail sidings, and rail-truck transfer facilities and raising bridge clearances.
Recommendations Encourage federal investment in public transportation.
o Seek more federal funding for public transportation within the next Federal Surface Transportation funding bill.
Allow private individuals and businesses to provide direct public transportation infrastructure investments in return for State income tax credits. For example, an individual or business could sponsor the installation of a bus shelter on a transit line and a portion of the cost of that shelter could be offset by a tax credit.
Encourage federal financial support for more energy efficient transportation infrastructure and systems.
109 These figures do not include any additional infrastructure funding provided through the American Recovery and Reinvestment Act (ARRA), which is expected to be approximately $2.35 billion for transportation projects.
Invest in Energy and Transportation Infrastructure 72
73 5 Stimulate Innovation in the Clean Energy Economy The nation is in the midst of a major economic transformation, evolving from the factory economy launched in the late 19th century and the post-World War II mass-production economy to an Innovation Economy. There is a move toward a global, entrepreneurial and knowledge-based economy in which the keys to success lie in the extent to which knowledge, technology, and innovation drive the creation of new, enhanced products and services. The importance of innovation in the energy and transportation sectors is underscored by the challenge posed by climate change, a challenge which will push the State, nation, and world inexorably toward a low carbon, clean energy future. The Governor has addressed this subject in his recent presentation on the New Economy Jobs Plan, which asserted that increasing the States capacity for innovation would be a crucial factor in future economic growth.110 The State needs to be proactive in realizing the promise inherent in these changes. Using the New Economy Jobs Plan as a starting point, this Chapter addresses how New York government should respond to this fundamentally changing economy. More specifically, it addresses how the State can help create and maintain an environment which stimulates innovation and advances the emerging clean energy economy.
A reasonable first step is to assess New Yorks unique and preeminent strengths, coupled with specific initiatives to capitalize on them. In the case of the clean energy economy, there are at least two general strategies for the State to pursue. First, the State can support the emerging clean energy market by increasing demand for clean energy goods and services through its numerous clean energy programs, e.g.,
45 by 15, and through targeted workforce training. Second, the State can provide direct support in order to retain existing firms and to attract the most promising new technologies and businesses that will compete in a carbon-constrained global economy.
During the transition period, New York can ill-afford to neglect the current and future energy needs of the States existing commercial and industrial base. For commercial and industrial companies alike, energy costs influence decisions on locating or expanding a business in New York. The States economic development strategies must continue to address energy costs in order to stimulate expansion of existing businesses as well as investment in new sectors of innovation that create jobs for New Yorkers. Such strategies will need to balance the immediate pressures of energy costs on business with the long-term opportunities for energy efficiency and clean energy technologies. Ultimately, commitment to the latter will help shield businesses from energy price volatility as well as reduce medium-and long-term energy costs.
110 Governor David A. Paterson. Bold Steps to the New Economy: A Jobs Plan for the People of New York. 2009.
http://www.ny.gov/governor/press/pdf/press_0608091.pdf
Stimulate Innovation in the Clean Energy Economy 74 5.1 New Yorks Unique Strengths New York has two unique strengths from which to draw in the development of a clean energy economy.
First, New York is home to an enviable mix of higher education institutions - including two Ivy League institutions, seven members of the elite Association of American Universities (AAU) and over 20 major research institutions - and a number of firms in the private sector that are leaders in energy innovation.
Second, the State has established public institutions, in particular NYSERDA and NYSTAR, which directly facilitate collaboration between industry and innovators located on college campuses and at research laboratories located throughout the State. NYSERDA and NYSTAR, in conjunction with other government partners including Empire State Development Corporation (ESD), the PSC, NYPA and LIPA, are well positioned to structure an economic development framework that taps into the States academic and industrial resources and promotes commercial investment in clean energy enterprises that will serve markets in New York and around the world.
5.1.1 Our Academic/Industrial Base Every region of New York is home to a leading research or academic institution that has some role in developing the next generation of energy technology. There are emerging regional clusters of expertise in power systems and nanotechnology in the Capital District, solar-PV in the Hudson Valley, building technology in Troy, Syracuse and New York City, and substantial advanced transportation equipment manufacturing and development capability in several upstate regions. New York-based Fortune 500 companies and many small start-up companies are active in emerging clean energy markets.
Together, these assets constitute areas of concentrated energy technology expertise in New York, which are highlighted in Figure 9.111 These identified strengths stem from a review of the core competencies of New York-based universities, industries, and research institutions. That review of the States research infrastructure identified four areas in which New York has the opportunity to be preeminent: clean energy technologies, life sciences, information technologies (IT), and advanced materials.
These strategic strengths (shaded in green in Figure 9), provide a vehicle through which the State can more easily and more precisely focus on clean energy opportunities, including bioenergy, building efficiency, energy storage, fuel cells, solar-PV, and Smart Grid. Furthermore, to New Yorks benefit, these energy technologies are widely viewed as critical towards achieving a long-term sustainable energy system.
111 New York Academy of Sciences. Innovation and Clean Technology in New York State. 2009.
Stimulate Innovation in the Clean Energy Economy 75 Figure 9. Core Clean Energy Capabilities and Strengths in New York Source: New York Academy of Sciences Markets for these technologies have grown substantially in recent years and are projected to continue to grow, and to provide New York with significant economic development opportunities.
According to the 2008 Kauffman Foundation State New Economy Index, New York is well positioned to excel in the innovation economy. New York ranked ninth on the index, with very strong rankings in science and engineering capability, patent development, and alternative energy use. As shown in Figure 10, New York is among the top three states in the country in the development of clean energy technology patents, an indicator of innovative activity occurring within the State.112 This level of activity evidences a strong foundation of research and development capacity in New York. The challenge will be in harnessing this activity toward the optimal energy, environmental, and economic development outcome for the State.
112 Heslin Rothenberg Farley & Mesiti P.C. Clean Energy Patent Growth Index. 2009.
Stimulate Innovation in the Clean Energy Economy 76 Figure 10. Clean Energy Patents Source: Heslin Rothenberg Farley & Mesiti, P.C.
While New York claims a nation-leading position in terms of overall innovative activity, the proportion of academic research that is funded by industry is just 4.3 percent, which is below the national average of 4.9 percent. Industrial-based research and development from New York-based corporations is only 1.1 percent of industry output, also below the national average of 2.0 percent and behind peer industrial states like Michigan (5.0 percent), Massachusetts (4.6 percent), New Jersey (3.5 percent), and California (3.5 percent). Clearly, there exists significant opportunity to enhance both industrial R&D and university-industry collaboration in New York.
The State is currently examining opportunities to promote collaboration between New York-based academia and industry to foster the creation of new and better clean energy products and services for use in New York and for export throughout the country and the world.
As PHEVs will likely serve as a technology bridge to fully electrified vehicles and an electrified transportation sector, New York has recognized the economic opportunity associated with advancing this technology. NY BEST Consortium has been established to:
create in New York a nationally-recognized center for energy storage technology research and development; conduct world-class, industrially relevant, applied, and translational research and development; and support industrial activity in New York in the commercialization of advanced battery and energy storage technology. The goal is for the
Stimulate Innovation in the Clean Energy Economy 77 NY BEST Consortium to facilitate a cluster of advanced battery and energy storage research and manufacturing capabilities in New York.
Five research laboratories in New York have been awarded multimillion dollar Energy Frontier Research Centers grants by DOE. The effort will bring nearly $100 million into New York over five years to hasten the scientific breakthroughs needed to build a new 21st century clean energy economy. The Energy Frontier Research Centers will bring together groups of leading scientists to address fundamental issues in fields ranging from solar energy and energy storage to materials sciences and superconductors. New York facilities, among 46 chosen nationwide, include State University of New York (SUNY) Stony Brook, Brookhaven National Laboratory on Long Island, Columbia University, Cornell University, and General Electric Global Research in Schenectady. New York is providing supplementary funding to these Centers in order to accelerate commercialization of technologies that emerge there.
In the field of nanotechnology, and the applications of nanosciences in the energy arena, New York is well poised with the work at the College of Nanoscale Science and Engineering (CNSE) of the University at Albany and Cornell University to attract new business opportunities. CNSEs Albany complex itself is a renowned state-of-the-art research facility, and has already attracted over 250 corporate partners from around the world to New York for research and development opportunities. It is anticipated that as these capabilities grow, the impact on energy systems and energy business opportunities will emerge.
Established in 2001, the Saratoga Technology + Energy Park (STEP) was established to be a destination for clean energy and environmental technology companies. STEP was designed as a fully-integrated knowledge community that includes programs, services, partnerships, and amenities to support the success of companies and their employees. In addition, the park environment is designed to provide synergies and collaboration opportunities for related businesses, universities and research centers and business service providers. For example, Hudson Valley Community College is currently building a facility at STEP that will provide learning opportunities for the students on the campus, and train the workforce for the parks tenants. STEP is the home of several new companies, including Auterra, Inc., which is developing materials to reduce the environmental impact of oil refining and coatings to improve photovoltaic performance, and GlobalFoundries, a leading-edge semiconductor manufacturing company.
The New York Smart Grid Consortium was established as a not-for-profit corporation in July 2009 to promote statewide collaboration among key electric energy stakeholders including generators, utilities, market operators, industry, government, and universities. The goal of this collaborative effort is to implement Smart Grid technologies that improve system reliability, security, and efficiency, while concurrently facilitating increased levels of renewable resources and demand management opportunities. It is the only organization of its scale in the United States that is committed to representing all major contributors across the energy value chain.
To help foster this type of collaboration and promote further such collaborations, Governor Paterson has created the Task Force on Diversifying the New York State Economy through Industry-Higher Education Partnerships. The Task Force will examine opportunities in areas of strategic strength for New York, including energy technology. The Task Force is developing recommendations to accelerate the pace of commercialization, foster the incubation of new companies, promote growing companies, and enhance the collaborative university-industry environment in New York.
Stimulate Innovation in the Clean Energy Economy 78 These efforts are early results of what will be an ongoing State strategy of serving as a convener for industry, academia and the private sector to come together to pursue targets of interest for the States clean energy economy.
5.1.2 NYSERDA, NYSTAR and the Innovation Economy New York has a unique asset in NYSERDA, in that the State has a government agency specialized in the field of energy research, development and deployment. Organized by State statute in 1975, among NYSERDAs missions is to advance innovative energy solutions in ways that improve New Yorks economy and environment. NYSERDA has organized its activities along the clean energy continuum, which is a five-stage development cycle of energy products and services. The development cycle encompasses (1) initial stages of scientific research and market analysis, through (2) technology adoption and market expansion, (3) technology demonstration and business development, (4) technology development and commercial feasibility, and ultimately leading to the final stage of (5) standard practice and code enhancement. While NYSERDA itself does not participate directly in these R&D and deployment activities, NYSERDA provides critical support at each stage of the continuum to maintain the development of energy products and services through the continuum stages.
One example of a technology that has successfully navigated the clean energy continuum is a hybrid-electric vehicle powertrain technology now being manufactured by BAE Systems Controls of Johnson City. This technology, which is used on medium and heavy duty vehicles, was initiated by research work originally targeted for liquid fuels alternatives for transportation application. In the course of such research, this specific electric powertrain technology was conceived to help conserve fuel use when a vehicle stops or applies its brakes going down a hill. NYSERDA invested State funds to support development of this technology. Ultimately, the technology was applied on a 40-passenger bus that was built by Orion Bus Industries in Oriskany. The successful application has grown into orders for more than 2,300 buses and has generated over one billion dollars in revenue. These buses expect to show 25 percent in fuel savings from standard diesel buses, and emissions reductions of 90 percent for particulate matter, 40 percent for NOX and 25 percent for GHGs. These hybrid buses are now becoming standard in major mass transit markets in New York, San Francisco, Toronto, London, and other cities.
In addition, NYSERDAs deployment programs are structured to achieve public benefits beyond just energy savings. For example, SBC funded energy efficiency programs were designed to help foster the development of a nascent energy efficiency services industry in New York. A result of the successful response to these programs is the creation of a platform and infrastructure from which the more aggressive EEPS program can build a higher level of energy efficiency - bringing certain energy efficiency services along the continuum into standard practice. A similar creation of these business sectors has also been noted from the continuation of the RPS Program.
As energy policy develops, especially in tandem with emerging climate change policies, continued funding of new energy technologies and services along the clean energy continuum will be necessary to realize the successful achievement of policy and program goals.
Like NYSERDA, NYSTAR supports technology development, innovation and commercialization with the objective of creating economic growth in New York. A central tenet of NYSTARs mission is the recognition that New Yorks world class public and private research centers are powerful economic development engines that can create high quality, high technology jobs in New York. NYSTARs programs and initiatives provide a critical vehicle to translate cutting-edge research into economic development.
Stimulate Innovation in the Clean Energy Economy 79 NYSTAR provides support to research centers throughout the State, including in some cases providing the physical infrastructure and/or attracting the worlds best scientific talent to foster science and technology discoveries and advancements in New York. Among NYSTARs key programs are:
Strategically Targeted Academic Research Centers - which serve as academic research facilities and state-of-the-art facilities for cutting-edge technologies; Advanced Research Centers - which serve as vital research centers that will conduct research in concentrated subject areas; Centers for Advanced Technology - which support university-industry collaboration in research, education and technology transfer, with the goal of fostering New York businesses to gain a competitive technological edge; and Centers of Excellence - which focus on critical emerging technologies that are anticipated to become major high-tech growth areas. The Centers function as a network of high-tech research and economic development resources, in an effort to create a mutually-beneficial research and development environment.
Ultimately, NYSTARs and NYSERDAs programs and research facilities are expected to attract a critical mass of nationally recognized researchers, generate significant new research funding, spur the establishment of spin-off enterprises, and increase the development and transfer of technology from the research lab to the marketplace. The collective expertise of NYSTAR and NYSERDA offers a strong platform for the development of an Innovation Economy in the clean energy sector in New York. To realize this energy, economic development and environmental strategy, NYSTAR and NYSERDA will help focus the States efforts in energy innovation to achieve advances in:
Infrastructure - The State must invest in both near-term and long-term infrastructure needs, and identify opportunities to repurpose New Yorks existing manufacturing infrastructure to produce advanced energy technologies and their component parts for New York, regional and national use, as well as export to worldwide markets.
Intellectual Capital - The State must build on the existing intellectual and professional resources that reside in New Yorks universities and colleges, research and development organizations, and private industry, to create a clean energy innovation infrastructure that furthers the States capability to develop, commercialize and market advanced energy technologies.
International Perspective - The State must implement policies and programs that not only promote efficient energy use and foster demand for renewable energy products and services, but that also provide a platform for the export of New York efficiency and renewable products to meet growing global demand.
Investment - The State must address policies and programs to facilitate access to public and private capital across the entire spectrum of the clean energy economy: from seed-stage companies to manufacturing expansion to large-scale energy projects. Where necessary and appropriate, the State may make targeted investments in order to realize strategic policies and programs.
Innovation - The State must remain committed to continued advances in energy policies and programs in order to ensure that New York is able to capture emerging opportunities which provide energy, environmental and economic development benefits. Such enduring commitment
Stimulate Innovation in the Clean Energy Economy 80 should result in new opportunities for New Yorkers, from jobs in the clean energy workforce to opportunities for engineers and scientists of all disciplines. These policies must promote an environment in which New York's individuals and companies alike can easily tap into the technical and professional skills needed to be effective in a rapidly changing energy landscape.
Recommendations Strengthen and expand collaboration between the intellectual and professional resources in the State's public and private institutions to support the growth of the States clean energy sector.
o Expand the NY BEST Consortium.
o Foster the development of clean energy incubators and regional clean energy clusters of related industries and research entities, aiming to accelerate technology commercialization and entrepreneurship.
o Use emerging networking technology and methods to foster collaborations among clean energy business incubators, entrepreneurs, investors, and researchers.
Implement, where practicable, the recommendations of the Task Force on Diversifying the New York State Economy through Industry-Higher Education Partnerships, established by Executive Order 19. The Task Force will study and report on best practices and generate recommendations on fostering business incubation, growth and emerging technology commercialization.
o Create a forum for stimulating ideas on the future of New York States clean energy economy.
Support the growth of clean energy technology companies in New York.
o Increase focus of State incentives and economic development assistance on clean energy companies and component manufacturers and service businesses.
o Enhance entrepreneurial and commercialization assistance to early-stage companies developing clean energy technologies.
Support and enhance research and development of next-generation clean energy technologies in the energy and transportation sectors.
o Use State funding commitments to leverage large federal funding programs, such as Energy Innovation Hubs and Energy Frontier Research Centers.
o Ensure that any national carbon cap and trade program provides the states with flexibility to invest auction proceeds into accelerating the market introduction of next generation/emerging clean energy technology.
o Support the development, demonstration, and testing of new clean energy technologies to help New York State achieve its RPS, EEPS, and carbon mitigation goals and simultaneously provide opportunities to create and grow clean energy businesses in New York.
Stimulate Innovation in the Clean Energy Economy 81 o Continue the collaborative DOT and NYSERDA partnership to develop and test sustainable transportation technologies and systems.
o Expand marketing of made-in-New York clean energy products to strategic international markets.
o Demonstrate the feasibility of electrification of the transportation system across all modes of transportation by expanding the State fleet plug-in hybrid vehicle demonstration program to private sector fleets, by expanding the use of electric ground equipment, and by considering increased electrification of rail lines.
5.2 Support Clean Energy Markets The State supports emerging markets of the clean energy economy in three key ways: (1) generating demand for the goods and services to foster sufficient in-state demand to attract firms seeking to provide those goods and services to markets worldwide, and to capture the economic development benefits from installation and use of these new products and services; (2) identifying and addressing market barriers experienced by new technologies to help foster sustained growth; and (3) targeting workforce training resources to better match skills training to market needs.
5.2.1 Generate Demand for Clean Energy Technologies There is a growing global demand for energy efficiency technologies and services and the components and systems for renewable generation technologies. As the world economy becomes progressively more carbon-constrained, these markets will grow even more rapidly. Closer to home, New Yorks neighboring states with renewable targets, as well as efficiency goals, contribute to this demand. At home, the States aggressive 45 by 15 goal will increase in-state demand significantly as compared to even one year ago. Through the aggressive funding of energy efficiency programs, the RPS Program, and similar programs sponsored by State authorities, the State has generated demand for the investment of hundreds of millions of dollars annually in the goods and services required by the clean energy economy.
Fostering a robust in-state demand provides a potential base of business for firms seeking to export their goods and services.
The States energy and economic development programs are designed to lower energy costs and stimulate business development while advancing an emerging clean energy economy. Several State entities offer energy programs to assist energy users in all energy-consuming sectors, including NYPA, NYSERDA LIPA, the PSC (primarily through the States investor-owned utilities), ESD and NYSTAR. The portfolio of programs offered provides energy consumers with opportunities for low-cost energy supply; leverages new investments in infrastructure and project development; fosters renewable and energy efficiency programs and improvements to environmental quality; expands the skilled workforce; and helps stimulate the growth of the clean energy economy in the State through investments in research and development for technologies ultimately produced by New York-based businesses.
New York recognizes the importance of energy costs for businesses seeking to expand or locate in the State. For example, in 2008 ESD and NYPA provided financial assistance and low-cost power to Globe Specialty Metals, Inc. (Globe) for the companys development and operation of metallurgical and solar grade silicon production facilities in Niagara Falls, New York. Globes manufacturing facility will produce nearly 4,000 tons of silicon annually for the solar cell industry. ESDs agreement with Globe will provide 25 percent of the companys solar grade silicon production for attraction of new solar panel
Stimulate Innovation in the Clean Energy Economy 82 manufacturers to the State. In early 2009, ESD and NYSERDA partnered to provide financial assistance to SpectraWatt, a designer and manufacturer of silicon solar cells for the Companys $80 million investment in a new production/headquarters facility in Dutchess County, New York. As part of the assistance package, ESD offered SpectraWatt a supply of solar grade silicon under the agencys agreement with Globe.
While the States commitment to these initiatives has been robust, there is a concomitant obligation to periodically review these funding programs to assure that they are necessary to meet State policy objectives, to recalibrate the required level of support, and to assure that the funds are being well spent.
5.2.2 Workforce Development In order to meet the 45 by 15 goal, New Yorks clean energy economy programs will create an estimated 50,000 jobs. Workforce development investment to address skill shortages in both the conventional energy and clean energy labor markets will significantly contribute toward achieving the States energy policy objectives and minimize the inefficient use of public resources.
New Yorks clean energy economy will be characterized in part by high-tech, small-scale development and large-and small-scale manufacturing. It will also respond to the increased importance of energy efficiency, renewable resources and a cleaner environment by building on strong research and development facilities, advanced engineering and a highly-educated workforce. To some degree this changing economy will require a workforce with technology-specific knowledge and skills at all stages of the product value chain - from entry level skilled workers to highly skilled and credentialed workers. In addition, recent power industry literature highlights the difficulties utilities and other energy organizations face in obtaining and retaining the human resource skills needed to handle the increasing diversity and complexity of a modern electric grid. This includes serious shortages of personnel with expertise in all technical categories, including engineers, contractors, and line workers.113 In May 2009, the New York State Department of Labor (NYSDOL) released a report which addressed three key aspects of clean energy jobs in New York: (1) the characterization of the clean energy labor market; (2) the inventory of existing training programs that support the clean energy sector; and (3) the need for State level collaboration and where these efforts are already seeing success.114 A key finding of the report was that most clean energy jobs are not unique to that industry; they require similar education and job skills to those in other energy, construction, and manufacturing sectors. So while new occupational titles will emerge in the clean energy industry, the skills for the vast majority of these occupations will be similar to existing job titles, with incremental skill enhancements specific to the industry. This is an important result because it provides sufficient intelligence to immediately advance workforce strategies to support clean energy jobs in New York with public investment.
113 A recent report by Cambridge Energy Research Associates (CERA) predicts that 50 percent of todays engineers, who now on average exceed age 50, will retire by 2015 and that their loss will not be offset by a sufficient number of new entrants into the engineering field. A major New York utility has had an open senior planning position for over a year and cannot find an experienced engineer to fill the position. Also, technology changes in the power industry and the potential for green energy is exacerbating the need for skilled tradespersons. CERA. Engineering Talent Squeeze --People Deficit -- Likely to Cause Further Delay in Some Oil & Gas Production Projects through 2010. 2007.
http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDetails.aspx?CID=9006 114 NYSDOL. New York States Clean Energy Industry: Labor Market and Workforce Intelligence. 2009.
Stimulate Innovation in the Clean Energy Economy 83 State agencies, stakeholders and partners have worked closely over the past year to build a comprehensive New York workforce development system to meet the needs of the clean energy economy. The system is based on a strategy that includes: comprehensive training initiatives, e.g., incremental skills training, certification and accreditation; pathways out of poverty; infrastructure, such as curriculum development, school start-up and accreditation, worker certification and the cost to properly equip workers with the requisite tools for the job; and marketing and outreach. Building on this and to help connect job seekers with opportunities, the State has launched a new Website to assist those seeking to enter the green jobs sector. The Website, www.greencareersny.com, is designed to make it easier for individuals, businesses, and workforce professionals to find the States local training programs and green job opportunities.
Looking forward, the clean energy economy workforce issues the State needs to address are:
- 1. Program Coordination. The massive influx of federal dollars and the multitude of workforce training programs create the risk that funds will be spent inefficiently. Public funding is generally channeled through existing funding streams administered by different State agencies. Each funding stream has legislative and/or regulatory restrictions which preclude a single agency from providing the full-range of activities necessary to support these objectives. The State should develop a formal means to coordinate all agencies involved in workforce training, including unions, non-profits, and colleges. Under this scheme, State agencies, Local Workforce Investment Boards, and stakeholder groups will continue to collaborate, align, and leverage their resources to assure that job creation, workforce development, and pathways out of poverty initiatives are being addressed comprehensively, such that each agencys funding is being leveraged in the most effective and optimal manner.
- 2. Develop a Comprehensive Training Program Inventory. The clean energy economy requires a fresh look at the workforce training needs across all levels of the workforce and across all new technologies on the horizon including Smart Grid, renewable energy, transportation, and building efficiency. NYSERDA and the Workforce New York Training Inventory used by NYSDOLs One-Stop System to fund training are being better integrated to more easily provide a comprehensive listing of the States clean energy training programs. Such consolidated information and efforts are essential to successful implementation of an effective workforce development strategy.
- 3. Weatherization Assistance Program. This program services many of those most in need of energy efficiency measures in their homes. Assessment of the workforce needs of the States WAP determined that the program needed access to skilled entry-level workers. The strategy to address this workforce need incorporates a multi-agency initiative for entry-level technician training for jobs in weatherization. Specifically, DHCR, NYSERDA, NYSDOL, New York State Office of Temporary and Disability Assistance (OTDA), and DOS will collaborate to provide a continuum of training and job placement services which will give public assistance recipients and unemployed individuals direct access to these jobs.
- 4. Develop the Capacity to Respond to Rapid Changes in Workforce Needs. Markets are changing rapidly and so are their workforce requirements. The States labor force would be well-served by a resident capacity to identify emerging trends in the labor market. NYSERDA, ESD and NYSDOL have strong capacity to assess the clean energy industry, e.g., economic modeling and occupational analysis. This capability is of critical importance to project job growth and assess the workforce needs associated with those jobs. NYSERDA, ESD, and NYSDOL should collaborate to improve the States capacity to assess and forecast clean energy jobs and the workforce needs associated with these jobs. This includes tracking business trends in the clean
Stimulate Innovation in the Clean Energy Economy 84 energy industry and establishing direct communication with businesses to identify their labor profile.
Recommendations Coordinate all agencies involved in workforce training, and partner with unions, non-profits, colleges, and Board of Cooperative Educational Services (BOCES) and technical high schools to expand the existing network of 32 clean energy workforce training sites.
o Make clean energy training curricula standard for SUNY and City University of New York (CUNY) schools.
o Continue the planning efforts of the New York State Sector Strategy Advisory Group initiated under the National Governors Association.
Dedicate funding for pathways out of poverty programs to train unskilled workers for clean energy jobs. These programs should target residents of environmental justice communities.
o Expand NYSDOL's Workforce NY Training Inventory used by the One-Stop System.
Coordinate a statewide workforce strategy to address the workforce needs of the States clean energy industry and maximize the States ability to obtain federal workforce training funding.
o Develop a statewide comprehensive strategy to assure an adequate workforce to meet energy efficiency and renewable energy goals.
5.3 Retain Firms and Attract Firms that will Thrive in the Clean Energy Economy The State maintains a wide range of economic development programs that directly support firms that:
need to maintain a competitive position for their products in existing markets, firms intent on transitioning their businesses to producing the goods or providing the services that will likely be called for in the new economy, and start up or early stage development firms offering new products or services.
ESD, NYSERDA and NYPA are all authorized to provide such assistance.
5.3.1 Retaining New Yorks Existing Base in a Carbon-constrained Economy Manufacturing activity in New York continues to decline, with service sector businesses claiming a larger share of Gross State Product. Yet, the manufacturing base in the State is highly valued for the level of investment in plants and equipment, a supply of good paying jobs, and the ability to sell products in national and international markets. New York remains focused on maintaining and expanding its industrial sector through a variety of economic development assistance programs, including funding for reductions in energy costs and improvements in energy efficiency.
A portfolio of nine NYPA economic development power programs supply electricity to private sector employers in New York. Each program provides electricity at reduced cost to participants but has unique features, including the source of power and eligibility requirements. For example, some programs use hydropower from NYPA power projects, while others rely on power purchased from the competitive market. Some are limited to regions in the vicinity of the power project that supplies the electricity and
Stimulate Innovation in the Clean Energy Economy 85 others serve customers statewide. Currently, more than 400,000 jobs across the State are linked to NYPA power programs through contractual job commitments.115 NYPAs power programs provide benefits for over 700 participant firms across the State. Overall, more than 75 percent of the program participants are in the energy intensive manufacturing-based sector.
Approximately 90 percent of manufacturing companies participating in NYPA programs are provided with low-cost hydropower and some 80 percent of Power for Jobs customers are manufacturers. The program participants in the upstate region are concentrated in the manufacturing sector, and the downstate region has significant numbers of participants in the financial services and print and electronic media sectors.
The Power for Jobs program was created in 1997 as a three-year program intended to be a bridge to a competitive marketplace. The program was designed primarily to be a retention program. Now in its twelfth year, Power for Jobs has been extended on a year-by-year basis since 2004. Businesses have expressed frustration with the current program. Specifically, the short term extensions have limited their ability to reasonably predict their energy costs for planning purposes. Also, this has inhibited their ability to attract capital for on-going and new projects. The Governor and the legislature have acknowledged that Power for Jobs needs to be replaced with a longer term program that will provide price stability.
A reformed program is needed to stave-off further erosion of the States economy and to establish a foundation for a more rapid economic recovery in the future. The reformed program should have the ability to retain and expand existing businesses, which are vital to the local economies, as well as the ability to respond to a changing marketplace by attracting emerging industries, such as solar, wind and other clean energy technologies. Criteria for the new program should be flexible and allow for the attraction of targeted industries and must be aligned with the States economic development and energy efficiency strategies.
In addition to a new statewide program, an evaluation should be conducted on NYPAs current hydropower allocations. Hydropower is an enormously valuable resource and as current contracts expire, the process should be diligent in verifying that all businesses receiving allocations of the low-cost hydropower provide maximum benefits to the State.
To help participating customers in NYPAs low-cost power programs better manage energy costs, NYPAs authority has been expanded to finance, design, develop, construct, implement and administer energy-related projects, programs and services, including energy efficiency and renewable or other alternate energy technologies for any public entity or for any of NYPAs economic development customers, as was noted in Chapter 2. Smart investments in energy efficiency initiatives can be a significant economic development tool for New York businesses.
Recommendations Expand economic development programs to attract clean energy industries.
o Use NYPA economic development power programs to attract clean energy industries, as allowed by statute.
115 The one exception is NYPAs Power for Jobs Program that provides part power and part billing rebates, although the bill rebate option is only available to manufacturing companies.
Stimulate Innovation in the Clean Energy Economy 86 o Extend expiring NYPA economic development power programs, including Power for Jobs, for a longer period of time, beyond the current one-year cycle of extensions.
Opportunities for increasing the size of the programs should also be explored.
o Agencies and utilities will collaborate in the development and marketing of economic development programs.
Incentivize NYPA's economic development customers to invest in cost-effective energy efficiency measures.
o Reform NYPAs economic development power programs to condition receipt of benefits on implementation of feasible energy efficiency improvements.
5.3.2 Attracting Firms that will Thrive in Clean Energy Economy While it is critical to retain the States existing firms, the State must also seek to attract the high-tech businesses that will thrive in a new innovation economy. As the world becomes more carbon constrained, the demand for clean energy products such as solar-PV, batteries, and wind turbines is expected to grow.
In addition, given the States local demand for these products, these industries are poised for growth in New York. Such growth could result in a repurposing of existing manufacturing infrastructure to increase production of advanced energy technologies and their component parts for domestic use and export to worldwide markets. The State is using a number of strategies to attract clean energy businesses.
The States $100 million Innovation Economy Matching Grants Program is intended to help New York companies compete for federal technology development funding under ARRA. Many ARRA programs provide support for clean energy technology deployment and manufacturing. In addition, the Green Strategic Investment Program (GSIP) of the New York State Common Retirement Fund committed $500 million over three years to environmentally-focused investment strategies that produce attractive, risk-adjusted financial returns. Under the GSIP, the Fund will actively seek opportunities to invest in renewable energy and clean technologies.
NYSERDA has established four clean energy business incubator programs providing business support to accelerate the successful development of early-stage, clean energy technology companies. Programs have been established in Buffalo, Rochester, Syracuse, and Brooklyn. NYSERDA provides a broad array of direct assistance for companies seeking to enter or expand the clean energy industry through its product development, clean energy business growth and development, and manufacturing incentive programs.
For example, NYSERDA is working with Alternative Fuel Boilers of Dunkirk to develop residential and small commercial high-efficiency biomass combustion systems.
87 6 Engage Others in Achieving the States Policy Objectives Local governments, and the communities they serve, must play a critical role in the overall effort to meet the States energy policy objectives, as the success of many energy programs depends on sustained commitments by local governments. Energy-conscious local planning and land use policy decisions, locally sponsored efficiency initiatives, and locally developed renewables projects should be some of the building blocks in the States effort to build a clean energy economy. Moreover, siting new energy infrastructure projects will be strongly influenced by informed local participation in the regulatory process. The State has a responsibility to collaborate with and support local governments and local communities in these efforts.
Looking beyond its borders, the States ability to achieve those same policy objectives depends heavily on establishing mutually beneficial working relationships with our neighboring states and nearby Canadian provinces. Significant challenges need to be addressed to, among other things, maintain the States fuel diversity, maximize the development of economic renewable resources, minimize future power plant air emissions, and enhance interstate and international power transmission while protecting environmental resources.
Finally, State success obviously depends on federal policies, programs, and funding. The country and the State are at a critical juncture; it is essential looking forward that energy policy and environmental and climate change policy proceed in tandem at both the federal and State level. Fortunately, the Obama Administration has advanced policy goals consistent with the States own priorities. However, now more than ever, the States interests need to be forcefully represented in the national debate on policy implementation.
6.1 Local Governments and Communities As discussed below, the roles and responsibilities of local governments and their communities impact the demand for energy, as well as the supply of energy. As appropriate, State support is described and further State action is recommended.
6.1.1 Code Enforcement The most important local responsibility in realizing the States energy policy objectives is enforcement of the Energy Code. Enforcement, by and large, is a local task. The State is responsible for training and the provision of supporting technical resources. There is little doubt that these efforts will require more people and money. But just as important, State and local officials responsible for Energy Code matters need to develop a shared recognition of how critically important rigorous Energy Code enforcement and verification of compliance have become in the States quest to improve its economy and environment in the coming years.
Engage Others in Achieving the States Policy Objectives 88 6.1.2 Planning Municipalities are authorized to undertake comprehensive planning through New Yorks General City, Town and Village Laws. Similar provisions exist in the General Municipal Law, which grants counties and regional planning councils the authority to develop county and regional comprehensive plans. While the statutes suggest a wide range of topics to be included in a comprehensive plan, they do not specifically address those related to energy. Making energy an explicit issue area will raise its visibility as an element of a communitys or regions long range planning, serve as the basis for modifying local zoning and other land use regulations, and lay the foundation for increased understanding by local governments of the role they play in achieving the States energy objectives.
Integration of energy considerations into local and regional comprehensive plans will help ensure that such plans promote development patterns and initiatives that reduce energy demand and GHG emissions, lessen environmental impacts on overburdened communities, and encourage energy efficiency. Local planning initiatives may include enhanced building codes and aggressive code enforcement programs.
Through comprehensive planning that incorporates stakeholder input, adjoining communities and counties can establish regional approaches to energy-related issues, including strategies for public transportation and congestion mitigation in all overburdened communities.
Integration of clean energy goals at the local level fosters energy security through an assessment of a localitys energy assets, both in terms of natural resources and energy infrastructure. Such assessments often identify economic development opportunities, such as the development of local wind resources or achieving energy cost reduction goals through energy efficiency. These opportunities need not be centered only on meeting the localitys individual energy requirements, but also on the identification of opportunities for energy systems investments that can benefit the State as a whole. These types of projects, such as biomass facilities utilizing locally harvested fuels, may produce fuels or energy specifically for export to other regions of the State. Assessments of such potentials at the local level, along with stakeholder input, may help facilitate local community acceptance of such projects and identify potential solutions to State energy needs.
Comprehensive planning, at both the municipal and regional levels, serves as an effective mechanism to identify and initiate so-called Smart Growth reforms. Smart Growth can foster fundamental changes in the way New York approaches how and where we live, help to target the States economic development opportunities, and direct energy investments from federal, State, and local sources. The Governors Smart Growth Cabinet defines Smart Growth as sensible, planned, efficient growth that integrates economic development and job creation with community quality-of-life by preserving and enhancing the built and natural environments. Chief among the principles behind Smart Growth is that such planning responds to a communitys own sense of how and where it wants to grow. Consistent with the States energy policy objectives, a chief benefit of Smart Growth is the potential efficiency gains derived from communities that plan around compact, mixed-use centers that do not rely on automobile trips for all day-to-day needs.
Smart Growth encourages growth in developed areas with existing infrastructure to sustain it, particularly municipal centers, downtowns (Main Streets), urban cores, hamlets, historic districts, and older first-tier suburbs. Smart Growth integrates land use planning and transportation on both the local and regional level to create communities that use less energy: that is, compact, mixed-use, walkable/bikable, transit-friendly communities that rely less on automobile travel. For instance, food travels on average between 1,500 to 2,500 miles to be delivered to the consumer; this is over 25 percent farther today than it was in 1980. By buying locally grown food, so called food miles can be reduced, along with the release of GHG from this agriculture transportation. Considering how Smart Growth strategies could be implemented downstate, the greater New York Metro Area has infrastructure that can foster expansion of
Engage Others in Achieving the States Policy Objectives 89 Transit Oriented Development (TOD), providing an energy efficient development design that allows for the mixed-use community while also providing a less energy intensive local transportation system. The Tappan Zee Bridge project has explicitly incorporated a municipal outreach program supporting TOD planning by communities in the corridor in anticipation of the significant transit service enhancements that will be introduced as an integrated element of the Bridge project. The Tappan Zee Bridge project TOD outreach modules are being developed as a resource to support TOD training and outreach throughout the State. Specific to foster Smart Growth upstate, additional investments in rapid transit bus service and associated improvements are needed in transit intensive corridors.
As an indicator of State support, DOS recently announced its Lower Hudson Valley Smart Growth grant program which includes $250,000 for a regional plan that integrates land use planning, State transportation infrastructure projects, and VMT, with the goal of reducing automobile dependence and transportation based GHG emissions.
In certain instances, the results of local energy planning initiatives inform State policy and planning efforts. As an example, in June 2009, the City of New York issued a Master Electric Transmission Plan for New York City, a comprehensive and extremely informative investigation of the Citys electricity transmission and generation options over the next 10 years. In late 2009, the New York City Energy Planning Board will present the results of its more general regional energy planning process, which addresses challenges and issues specific to the downstate region. The Citys energy planning effort is an outgrowth of PlaNYC, an ambitious and comprehensive sustainability plan for New York City.
Finally, on occasion, State and local agencies, as well as private parties, enter into joint studies and ongoing collaboration on energy projects of major regional interest. LIPA and Con Edison have completed a technical interconnection study to identify the resources and investment necessary to connect wind resources off Long Island that could serve both Long Island and New York Citys electricity needs.
This collaborative has expanded to include NYPA, NYSERDA, the MTA, and the Port Authority of New York and New Jersey under the name of the Long Island-New York City Wind Collaborative. A Request for Expressions of Interest to site and build wind resources off the coast of Long Island was released in June 2009 to begin the next phase of the development process.
Recommendation Facilitate consistency among multiple levels of government.
o Revise the City, Town, Village, and General Municipal Laws to incorporate energy considerations in Comprehensive Plans. Revisions should be made to explicitly identify energy components that would engage communities in helping to meet the States energy goals.
o Develop Tax Increment Financing reform legislation to encourage the redevelopment of distressed communities and revitalize downtown areas as recommended by the Governors Smart Growth Cabinet.
o Promote land use patterns that reduce reliance on vehicle trips and establish consistency between transportation planning and land use planning.
o Provide technical assistance and funding opportunities via State grant programs for local and regional energy planning and implementation activities that help meet State energy goals.
Engage Others in Achieving the States Policy Objectives 90 o Promote land use and zoning tools that support Smart Growth.
o Pursue TOD strategies and expand the DOSs current initiative working with MTA to encourage development in the Hudson Valley and Long Island along MTA transportation routes. Specifically, the State should expand the inter-agency TOD incentive package beyond the MTAs rail service area to include upstate TOD opportunities around rail and bus. Sustainable transportation features such as TOD should be incorporated into major transportation projects and TOD outreach modules should be incorporated into DOS municipal land use training.
6.1.3 Local Initiatives Throughout New York, communities are integrating the States energy policy objectives into municipal and regional initiatives. Recent efforts include:
Westchester County recently completed an Action Plan for Climate Change and Sustainable Development that provides strategies to reduce GHG emissions associated with energy, transportation, land use, recycling and waste management, and water resources management. The county-wide action plan provides guidance on actions to be taken by various sectors within the county, including county government, municipalities, business, education, and households.
On Long Island, the Town of Babylon has been at the forefront of innovative energy efficiency programs. In late 2008, the Town unveiled a new program, the Long Island Green Homes Program, which provides financing to homeowners for energy efficiency improvements. Prior to this program, Babylon became the first town on Long Island to adopt ENERGY STAR standards for new homes, and subsequently established a requirement that all new commercial and industrial buildings over 4,000 sq. ft. meet the U.S. Green Building Councils LEED (Leadership in Energy and Environmental Design) certification standards. Eight other Long Island towns have followed suit by adopting ENERGY STAR standards as a mandated minimum for residential construction.116 In upstate New York, the Central New York Green Team, which consists of over 50 partners within government, industry and the academic community, is actively engaged in green sector development. One such recent green initiative is the partnership between the City of Syracuse, Onondaga County and the SUNY College of Environmental Science and Forestry to develop a willow biomass-to-energy plant that initially is expected to provide power to all public facilities within the county.
The State is supporting - and will continue to support - these and similar initiatives through the promotion of the DECs and NYSERDAs Climate Smart Communities program. To this end, the State is developing a comprehensive Climate Smart Communities guide that will provide detailed information to help communities develop and implement climate smart practices. This guide will include step-by-step guidance for planning and implementing climate smart practices, information on resources and funding, examples of successful implementation, and considerations for measuring and monitoring success.
Climate Smart Communities begin by adopting a model resolution that includes a pledge to combat climate change, appointing a taskforce with designated leaders, inventorying the community's GHG 116 Of New York State towns reporting, the towns of Greenburg, Hempstead, Babylon, Yorktown, Southampton, Brookhaven, Riverhead, Smithtown, and Clarkstown have adopted ENERGY STAR as a mandated minimum for residential construction.
Engage Others in Achieving the States Policy Objectives 91 emissions, and developing a climate action plan (a strategy to put new practices in place). The program emphasizes the importance of community awareness of their contributions to GHG emissions and action in reducing GHG emissions and adapting to climate change. The comprehensive planning process can help communities integrate their climate goals in a way that aligns with their land use goals.
Programs to improve energy efficiency, such as the federal ARRAs energy efficiency programs and other existing and proposed programs, are intended to help municipalities take on a level of responsibility for achieving energy policy and climate policy goals together. A number of recent initiatives are meant to foster greater municipal participation in the programs. First, to make it easier for local governments and schools to access energy efficiency programs, Governor Paterson called for the creation of a clearinghouse to serve as a single point of access for information on all energy efficiency programs, which is now available at http://www.nyserda.org/clearinghouse/. Second, legislation proposed by the Governor was enacted that will expand NYPAs energy services program.117 The expansion will allow any municipality in the State to access NYPAs program which provides upfront capital for local governments to retrofit public buildings, install clean DG, or make other green building upgrades. Lastly, the ARRA provided $123 million to New York through the State Energy Program and $175 million through the Energy Efficiency and Conservation Block Grant Program, both of which will provide grant opportunities for local governments to pursue clean energy projects.118 Combined, these new State and federal resources enable local governments to implement shared energy priorities.
Recommendation Promote Climate Smart Communities.
o Increase the number of communities participating in Climate Smart Communities.
6.1.4 Community and Citizen Participation New Yorks geographic diversity, and the substantial differences in population density from one area of the State to another, present unique challenges and opportunities for energy infrastructure planning and development. Major energy projects that are designed to advance the States clean energy economy, such as wind farms or transmission lines, may provide benefits to one community while saddling another with new burdens. The challenges extend beyond issues that pit upstate areas against downstate areas. For example, complex challenges arise when energy projects are proposed to be located in communities within New York City that are already overburdened by ongoing construction projects and traffic pollution.
One way to address - if not resolve - these problems is to assure early, meaningful local and public participation in major energy project siting proceedings. Community and citizen participation has been a part of energy policy decision-making in New York for decades; however, public outreach and meaningful participation in energy decision-making could be improved. Collaboration with local communities and stakeholders can further energy policy goals by facilitating the development of needed projects. Early consultation and communication with communities could prevent unnecessary delays by addressing community concerns and promoting transparency in energy development. Community and 117 Chapter 477 of the Laws of 2009.
118 For more information on the State Energy Program and Energy Efficiency Conservation Block Grant Program, visit NYSERDA. Economic Recovery and Energy. 2009. http://www.nyserda.org/economicrecovery/default.asp
Engage Others in Achieving the States Policy Objectives 92 stakeholder collaboration can also lead to creative, efficient resolution of issues regarding energy related development.
Enhancing public participation in the siting processes, for both generation and transmission facilities, has particular importance because it can advance principles of environmental justice. Environmental justice policies must account for both the substantive impact of energy decision-making - such as the location of a new power plant or oil storage tank - as well as the regulatory decision making process that is used by the government. Ensuring that adequate outreach and robust community participation provisions are incorporated into such processes is essential.
In particular, community collaboration should be a factor in energy infrastructure siting. Energy infrastructure decisions often raise environmental justice concerns, particularly with respect to electric power plant siting decisions and transmission projects. Some processes, including the expired PSL Article X siting law, incorporated some review of environmental justice issues, provided for enhanced public participation, and focused on specific potential impacts to neighborhoods such as air pollution emissions and construction impacts. Since the expiration of Article X, the SEQRA energy infrastructure approval proceeding does not adequately provide for community participation or take into account the impact of new facilities on already burdened communities. As discussed in Chapter 4, creating a siting law similar to Article X with a comprehensive assessment of the environmental and health impacts of a proposed project, along with funding for community participation in the regulatory process, will advance environmental justice.
Most essential to the collaboration with communities is the impact of energy policies and programs on public health, the environment, and a communitys way of life. For example, mapping of environmental justice communities and asthma rates provides data that may better inform government and community programs. Community impact issues may be qualitative in nature, but may nonetheless support the identification of alternatives or mitigation efforts that can meet broad energy policy goals, or meet the health and environmental needs of the community. Opposition to wind energy development has identified some instances where both quantitative and qualitative analysis may be helpful to provide clarity to government decision makers, resolve public concerns, and result in a more informed process and identification of potential alternatives. Supporting and promoting these mapping and informational analyses will continue to enhance community collaboration.
Recommendation Address the energy-related public health and safety needs of communities.
o Enhance mechanisms for early, fair, and meaningful public involvement in energy-related decisions (through such measures as improved public outreach and notice, alternative times and locations for public meetings, and language translation of notices and key documents).
o Develop energy facility siting and permitting procedures to assess and consider disproportionate environmental burdens in potential environmental justice areas.
o Incorporate procedures in the Report of the Health Outcome Data Work Group into facility siting and permitting processes.
Engage Others in Achieving the States Policy Objectives 93 6.2 Other States and Provinces Increased cooperation and coordination among states in the region, and more intense efforts to resolve issues and identify opportunities with nearby Canadian provinces, are needed now more than ever.
Success in these initiatives will dramatically improve the States chances of fully satisfying its energy policy objectives, support economic growth, and help bring to fruition a clean energy economy.
At least three important circumstances justify the importance of aggressively pursuing the States objectives by looking beyond our borders:
Offshore Energy Development. New Yorks open coastal waters off Long Island Sound, the Atlantic Ocean, and the Great Lakes are attracting increased interest for development of traditional pipeline and cable infrastructure, LNG transshipment and storage facilities, and renewable energy generation from wind, currents and tides. Meeting New Yorks energy policy goals will depend on adequate access to these State waters and areas further offshore. Moreover, the competing needs of multiple stakeholders, including fishing, recreation, as well as neighboring states and provinces, will have to be considered in New Yorks decision-making, particularly in offshore areas. New York has traditionally accessed offshore areas for energy infrastructure, mostly for fuel pipelines or electricity transmission lines, and future access to these areas for siting commercial-scale energy generation or storage projects will require considerable regional collaboration.
Increasing Reliance on Renewables. The State has deepened its commitment to rely on renewable resources to meet its electricity needs. The States decades-long dealings with Hydro Quebec and Ontario, Canada provide an excellent platform for expanding the States purchases of hydropower. However, there are issues that must be resolved before this opportunity can be realized. The economics of any proposed transactions must make sense to both parties, and there is a need to resolve interstate and intrastate questions of cost recovery and cost allocation for any capital expenditure for related new transmission capacity.
Avoiding Risks and Recognizing the Nature of the Challenges. As discussed below, the wisdom of proceeding on a regional basis for abating GHG emissions from the electric sector is being confirmed every day. A sustained regional approach to solving similar problems provides comfort that the State is not causing further deterioration in its relative economic position and is a recognition that the nature and scope of certain environmental challenges go far beyond the borders of any single state.
These issues have provided a great deal of the impetus for the following initiatives, in many instances led by New York.
6.2.1 Regional Greenhouse Gas Initiative RGGI is a market-based cap-and-trade program established to reduce GHG emissions from electric power generation. With 10 participating Northeast and Mid-Atlantic States, including New York, RGGI is the first program of its kind in the nation serving as a model not only for a future national program to reduce CO2 emissions, but for other regional energy initiatives. New York has participated in the successful RGGI CO2 auction program along with neighboring RGGI states. The auction of allowances has generated additional funding for direct State investment and support to leverage private investments in the clean energy economy across all sectors, including energy efficiency in buildings, renewable energy generation, research and development, and transportation efficiency initiatives.
Engage Others in Achieving the States Policy Objectives 94 The success of RGGI not only demonstrates how regional cooperation can advance broad policy objectives and provide leadership on issues, but also demonstrates how markets will respond to regional actions. Such regional efforts also provide a working example of how federal policies might be developed to pursue similar national objectives.
RGGI is already serving as a transformational model. The program resolved multi-jurisdictional issues -
multi-state and multi-discipline (energy and environment) - to craft a unified program to address critical energy, economic, and environmental issues. The success of RGGI has led the participating states to consider other possible areas of cooperation in advancing climate policy. The low carbon fuel standard, summarized below, is just such an initiative.
6.2.2 Northeast and Mid-Atlantic States Governors Meeting The Northeast and Mid-Atlantic States Governors (NEMAG) meeting on clean energy cooperation was convened in New York City in September 2008 to identify activities related to clean energy projects, polices, programs, and market development that are ripe for regional governmental collaboration. The goal of the forum, hosted by Governors Paterson of New York and Patrick of Massachusetts, was to initiate an ongoing process for regional collaboration on clean energy issues identified by the states. The NEMAG proposition is that by acting as a region, the Northeast can find a means to better position the region and the individual states within the region, and to realize the energy, economic development, and environmental opportunities of clean energy policy and program implementation. The forum was reconvened in October 2009 and plans for continued discussions have been made and are anticipated to continue.
6.2.3 Mid-Atlantic Regional Council on the Ocean Recognizing that renewable offshore energy can foster a more efficient and sustainable regional economy, improve energy security and independence in the region, and improve the quality of life for citizens, the Governors of New York, New Jersey, Delaware, Maryland, and Virginia have created a structure -
MARCO - for the states to collaborate on shared challenges facing ocean ecosystems. One of four initial priority areas for collaboration is the promotion of sustainable development of the regions renewable offshore energy resources, including wind energy, through a more predictable regulatory regime that accommodates other ocean uses. In June 2009, Governor Paterson and New Jersey Governor Corzine convened a summit on ocean issues in the Mid-Atlantic region to launch this formal partnership among the states, as recommended by New Yorks Ocean and Great Lakes Ecosystem Conservation Council.
Council activities are expected to focus initially on coordination of information and data-gathering across the region, in part to identify shared challenges in the siting of new energy development.
6.2.4 Great Lakes Wind Collaborative The Great Lakes Wind Collaborative is a forum in which information on sustainable wind power development in the region is analyzed and shared, with a focus on offshore development in the Great Lakes. The Great Lakes region has the potential to generate $80 billion in economic activity and 300,000 jobs for the region from wind.119 Furthermore, it is estimated that there is the potential for 3,000 MW in wind capacity off the shore of Lake Erie alone. In December 2009, NYPA released a Request for 119 Great Lakes Wind Collaborative. Quarterly Update. 2008. http://www.glc.org/energy/wind/quarterly/july08.html
Engage Others in Achieving the States Policy Objectives 95 Proposals to develop wind resources in Lakes Erie and Ontario to help meet the Governors 45 by 15 clean energy program goal, consistent with the development plans of the Collaborative.
6.2.5 I-95 Coalition New York is a member of the I-95 Coalition, a group of states through which the I-95 highway runs. The Coalition efforts include promoting and using ITS and other energy efficient transportation technologies on the highway.
6.2.6 Coalition of Northeast Governors Governor Paterson is currently chair of the Coalition of Northeast Governors (CONEG), an association of the Governors of the eight Northeastern states, formed in 1976 to encourage intergovernmental cooperation on issues relating to the economic, environmental, and social well-being of the Northeast states. CONEG provides a forum for the governors to identify shared priorities and to develop agreements and take action on regional, state, and federal issues. Priorities include renewable energy, transportation, increasing energy efficiency of new and existing buildings, and promotion of the National Biomass Partnership. For example, CONEG is working with Congress to support energy efficient high speed rail as part of the ARRA. CONEG provides New York the opportunity to help create new intergovernmental relationships and guide regional/state/federal collaborations - of which energy will be a key policy area in the near term.
6.2.7 Other Regional Initiatives Other less formal, but equally important, regional initiatives are underway, such as:
New York has been engaged in discussions with Ontario and Quebec to identify feasible opportunities for importing more renewable electricity into New York. The focus to date has been on identifying technical expansions of existing transmission rights-of-way for moving more power from Canada and upstate New York to the downstate region, where supplies are tighter and prices are higher. New York is also working with Ontario and Quebec to improve energy efficient rail services.
Based on the success of RGGI, the Northeast and Mid-Atlantic States have committed to an effort to analyze low carbon fuel supply options and develop a framework for a regional low carbon fuel standard to help ensure sustainable use of renewable fuels in the region. Development of the standard as a regional effort, rather than traditional state-by-state adoption of such environmental standards, will help to advance policy more expeditiously, and allow the region to develop a larger voice at the national level than would otherwise be experienced by state-by-state action.
This effort is in collaboration with the Northeast States for Coordinated Air Use Management (NESCAUM), which is conducting a study of low carbon fuel standards for the region.
The State participates in the Eastern Regional Interconnect Collaborative, tasked with transmission planning for the Eastern Interconnect.
Through these and other collaborative efforts, the State is well positioned to take maximum advantage of shared regional interests in pursuing its own energy priorities. Greater collaboration and planning of all the involved jurisdictions and agencies is necessary to help maximize use of the resources. New York should continue to play an integral role in this planning effort to help ensure that the States needs are incorporated into any such planning efforts, and to assist in the process to analyze and allocate the
Engage Others in Achieving the States Policy Objectives 96 specific uses, combinations of uses, or areas requiring protections. Such collaboration and planning will reduce conflicts among users, provide greater certainty for private investment, and reduce conflicts between natural resource conservation and economic development.
Recommendation Collaborate regionally to advance the State's clean energy goals.
o Develop a New York offshore ocean plan to identify appropriate areas for renewable energy development and transmission, in coordination with neighboring states and federal agencies.
o Ensure continued progress in addressing regional clean energy issues through the leadership of NEMAG.
o Advance multi-state actions through the interstate Mid-Atlantic Governors Agreement on Ocean Conservation that will improve the region's competitiveness for offshore renewable energy projects.
6.3 Participating in the National Debate and Coordinating with Federal Agencies 6.3.1 National Policy The Obama Administration has moved aggressively on adopting new energy policies to improve the nations energy security and help create a clean energy economy and has prompted Congress to advance energy policies that build on New Yorks policies and those of other leading states. Climate change legislation is advancing in Congress in recognition of the impacts of the nations energy use on climate.
Renewable energy and energy efficiency programs are being funded at unprecedented levels by the federal government, with a partnership role for the states defined in the administration of such programs.
Governor Patersons Washington D.C. office is fully engaged in the development of new federal programs with the Obama Administration and with Congress to develop national programs that coincide with and bolster New Yorks energy, environment, and economic development policies. New Yorks Congressional Delegation - in both the Senate and the House of Representatives - serve as key advocates in federal energy policy and program development, and they have been influential in advancing national policies from which New York will be able to realize significant benefit. The process to develop a national CO2 cap-and-trade program, a combined renewable energy and energy efficiency portfolio standard program, electric transmission line siting procedures, and other essential policy initiatives, has already benefitted from the expertise of DEC, NYSERDA, DPS, and other New York State agencies.
These efforts must be continued to ensure that the most effective national programs can be implemented and that they provide New York a platform upon which the States clean energy agenda can be fully realized.
In emerging transportation policy, new CAFE standards for light duty vehicles have been adopted for the first time in decades and DOE and National Academy of Sciences are studying the potential for adopting CAFE standards for medium and heavy duty vehicles. While the new CAFE standards are a historic step in the right direction, there is room for greater achievement with fuel economy standards. Achieving a CAFE standard of 43.3 mpg for cars and 34.7 mpg for light trucks is technologically and economically feasible with existing technology.
Engage Others in Achieving the States Policy Objectives 97 The State is also working with other states and interested groups in the reauthorization of the Federal Safe, Accountable, Flexible, and Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), which provides funding for highways and public transportation. SAFETEA-LU expires on September 30, 2009. Because this legislation establishes funding and priorities for surface transportation in the nation, the reauthorized SAFETEA-LU is an opportunity to help New Yorkers conserve energy, improve safety, and reduce pollution while enhancing the mobility of goods and people. In the new legislation, New York will seek to preserve and maintain essential infrastructure, increase funding for public transportation, preserve the Congestion Mitigation and Air Quality program, increase funding for system efficiency and energy efficient modes, dedicate funding for rail, and change federal funding formulae to recognize energy efficient transportation. New York will also seek extension of the federal legislation that authorizes the popular Clean Pass program on the Long Island Expressway.
These and other federal policies will likely require the State to make investments in energy systems or to match federal funding provided for energy projects. It is critical, at this juncture in time, that the federal government assume more leadership and establish national energy policies which the states have been pursuing very aggressively on their own. However, collaboration with the federal government, as these policies are developed, will need to focus on retention of state sovereignty in making energy policy and program decisions that meet federal standards. Such sovereignty issues have been an issue in the development of requirements in proposed renewable energy and energy efficiency portfolio standard programs, and decision-making authority and processes with respect to electric transmission lines.
Federal policies and programs must recognize New Yorks unique energy infrastructure and needs, as well as the States institutional structures and processes that continue to serve the State well. Imposition of federally-designed, one-size-fits-all energy programs might not be the most advantageous or cost-effective means to achieve federal or state goals.
Specifically, collaboration with the federal government must focus on the need for the federal government to establish national programs and standards to provide guidance to the states, energy market participants, and energy policy stakeholders to achieve national standards. The federal government must recognize, however, the essential role of the states to craft specific policies and programs to achieve federal goals and meet individual states needs. This is particularly pertinent in light of recent proposals for building transmission infrastructure to transport low-cost Midwestern power to the east coast. Regional and in-state transmission projects should take precedence over a one-size-fits-all federal solution. The regional and in-state solutions would likely also be significantly cheaper and much easier to site. In either case, states should be given the opportunity to site their own energy projects as needs arise rather than having a federal solution imposed upon them.
6.3.2 Agency Coordination In addition to the impact of federal action to create a clean energy economy and address climate change and fuel efficiency, the federal government has significant regulatory authority that impacts energy planning and development.
Standards and protocols for Smart Grid investments are being developed at the State and federal levels.
While the State has jurisdiction over the standards and protocols applicable to distribution and end-user Smart Grid technologies, the Federal Energy Regulatory Commission (FERC) has responsibility for the standards and protocols for transmission Smart Grid technologies. The PSC has worked through the National Association of Regulatory Utility Commissioners (NARUC) in a collaborative effort with FERC to provide guidelines to DOE for its Smart Grid Demonstration Project Grant Program. These guidelines address issues including interoperability, cyber security, and stranded costs - issues which apply to
Engage Others in Achieving the States Policy Objectives 98 transmission and distribution systems and end-user Smart Grid investments alike. This collaborative effort may help avoid possible future uncertainty regarding applicable standards and protocols.
The offshore regulatory environment is complex, with federal and state jurisdictions and responsibilities that influence the siting and development of energy projects. For example, the Energy Policy Act of 2005 granted the Secretary of Interior the primary permitting authority for renewable energy development, e.g.,
wind, wave, and tidal in the Outer Continental Shelf. The FERC currently has guidance in place that allows for wave energy conversion facilities to be permitted in a stepped licensing procedure. Under the Deep Water Port Act of 1974 (33 U.S.C. 1501-1524), the U.S. Secretary of Transportation licenses the construction and operation of all oil and natural gas deep water ports, including LNG facilities, located beyond the U.S. territorial seas and off the U.S. coast.
Various other federal agencies have roles in offshore federal permitting processes that may be applicable to energy development, such as: the Army Corps of Engineers (structures in navigable waters), the Federal Aviation Administration (hazard to aviation), the Fish and Wildlife Service (Migratory Bird Treaty Act), the National Oceanic and Atmospheric Administration (Endangered Species Act, Marine Mammal Protection Act, Magnuson-Stevens Fishery Conservation and Management Act, National Marine Sanctuaries Act), the Environmental Protection Agency, the Maritime Administration, the U.S.
Coast Guard, the Department of Transportation, and the Department of Energy (funding, technical assistance) and FERC (transmission).
These evolving federal initiatives and the large number of agencies and authorities involved point to the need for coordination between New York and the responsible federal agencies to make appropriately sited, economically viable offshore energy projects a reality along the Mid-Atlantic coast and the Great Lakes. There is a growing recognition of this need. For example, as a follow-up to the Northeast and Mid-Atlantic States Meeting on Clean Energy Cooperation, the U.S. Department of the Interiors Minerals Management Service (MMS) has tentatively agreed to establish a New England-Mid-Atlantic States Joint Planning Agreement. Among the goals of the Joint Planning Agreement would be the development of a consistent, efficient approach to integrating state-federal activities, including resource assessment and data collection. The U.S. Offshore Wind Collaborative has drafted a letter to formally request this partnership between the states and MMS.
Recommendation Optimize coordination and collaboration with the federal government to ensure that New York's energy policy objectives and strategies will be advanced at the national level.
o Work more closely with FERC to address issues of common concern for Smart Grid investments.
o Provide regular briefings to New York Congressional Delegation on the State's energy programs and policies.
99 7 Implementation Plan The Energy Plan contains many recommendations, some of which are already underway in some form and which will be continued and strengthened; some which require new action by agencies and considerations for action by the Legislature, independent authorities, boards and commissions; and some which require the initiation of new processes, procedures, or studies to inform future decisions. The following implementation plan identifies actions that will be taken over the planning horizon to advance the recommendations laid out in this Plan. The Planning Board will track the progress of these activities and report on that progress annually via the Energy Planning Website, www.nysenergyplan.com.
Acronyms Used in the Implementation Plan AASHTO: American Association of State Highway and Transportation Officials Ag&Mkts: NYS Department of Agriculture and Markets ASHRAE: American Society of Heating, Refrigerating, and Air-Conditioning Engineers BOMA: Building Owners and Managers Association CAFE: Corporate Average Fuel Economy CPB: NYS Consumer Protection Board CUNY: City University of New York DASNY: Dormitory Authority of the State of NY DEC: NYS Department of Environmental Conservation DHCR: NYS Division of Housing and Community Renewal DOB: NYS Division of Budget DOE: U.S. Department of Energy DOH: NYS Department of Health DOS: NYS Department of State DOT: NYS Department of Transportation DPS: NYS Department of Public Service EEPS: Energy Efficiency Portfolio Standard EPA: U.S. Environmental Protection Agency ESCO: Energy Service Company ESD: Empire State Development Corporation FERC: Federal Energy Regulatory Commission FHWA: Federal Highway Administration GHG: Greenhouse Gas ICC: International Code Council IECC: International Energy Conservation Code LIPA: Long Island Power Authority MMS: Minerals Management Service MPO: Metropolitan Planning Organization MTA: Metropolitan Transportation Authority NACAA: National Association of Clean Air Agencies NARUC: National Association of Regulatory Utility Commissioners NY BEST: NY Battery and Energy Storage Technology Consortium NYC EDC: NYC Economic Development Corporation NYISO: NY Independent System Operator NYPA: NY Power Authority NYSDOL: NYS Department of Labor NYSERDA: NYS Energy Research and Development Authority NYSTAR: NYS Foundation for Science, Technology and Innovation OGS: Office of General Services ORPS: NYS Office of Real Property Services OTDA: NYS Office of Temporary and Disability Assistance PANYNJ: Port Authority of NY and NJ PSC: Public Service Commission PSL: Public Service Law REBNY: Real Estate Board of NY RFP: Request for Proposals RGGI: Regional Greenhouse Gas Initiative RPS: Renewable Portfolio Standard SEQRA: State Environmental Quality Review Act SUNY: State University of NY T&F: NYS Tax & Finance TWY: NYS Thruway Authority USDOT: U.S. Department of Transportation
Implementation Plan 100 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Chapter 2: Produce, Deliver, and Use Energy More Efficiently Produce, Deliver, and Use Energy More Efficiently IMPROVE ENERGY EFFICIENCY PROGRAM COORDINATION 1 Consistently measure and report results of State administered efficiency programs Expand the existing statewide Evaluation Advisory Group to include additional State agencies involved in energy efficiency programs DPS Current Evaluation Advisory Group members NYC and Municipalities' participation DHCR, DOS, and DASNY added to Evaluation Advisory Group; engage NYC Develop standard measurement and reporting for statewide energy efficiency achievements DPS Current Evaluation Advisory Group members NYC and Municipalities' participation Standard evaluation, monitoring, and verification requirements finalized by the Evaluation Advisory Group Release specific energy program achievement data including detailed evaluation reports on an on-going basis DPS LIPA, NYPA, and NYSERDA Annual report Annual report Annual report 2 Mitigate short-term impacts of rising energy costs on New York's low income populations Expand and enhance low-income efficiency programs.
Programs should include both implementation of energy efficiency measures and education on how to use energy more efficiently
- DHCR, DPS, LIPA, and NYSERDA Backlog of interested program participants eliminated Annual report Annual report IMPROVE ENERGY CODES AND STANDARDS 3 Improve the Energy Code Eliminate pay-back requirement of measures and the 50% renovation loophole in the Energy Law Executive Chamber DOS and NYSERDA State legislation Amendments proposed by DOS in 2008 and 2009; Energy Law amendments to be in place to comply with American Recovery and Reinvestment Act Update the Energy Code every three years DOS NYSERDA 2009 IECC for residential buildings and 2007 ASHRAE 90.1 for commercial buildings adopted 2012 Code adopted; process to adopt 2015 Code commenced 2015 Code adopted; process to adopt 2018 Code commenced
Implementation Plan 101 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Produce, Deliver, and Use Energy More Efficiently Implement the Code compliance plan required by the American Recovery and Reinvestment Act DOS NYSERDA Compliance plan formulated with NYSERDA Baseline energy compliance levels for municipalities established; train code officials and design community; provide follow-up "circuit rider" training Implement "Stretch Code" for municipalities wishing to implement "beyond code" programs DOS NYSERDA ICC 700-2008 or ENERGY STAR reviewed for new residential construction International Green Construction Code reviewed for Commercial Construction 4 Enact energy efficiency standards for products Collaborate with other states to influence federal enactment of national standards DOS Executive Chamber and NYSERDA Coordination of RGGI/Northeast Mid-Atlantic Governors Clean Energy Forum States Contact made and on-going dialogue established with other states Multiple appliances reviewed for regulation to maximize appliance efficiency Continued review of DOE and California initiatives Promulgate regulations to implement standards from 2005 legislation DOS Executive Chamber and NYSERDA Coordination of Northeast Energy Efficiency Partnership and Appliance Efficiency Awareness Project Small Consumer Product standards implemented Adopt standards for other products not covered by national standards DOS Executive Chamber and NYSERDA State legislation; Coordination of Northeast Energy Efficiency Partnership, the Appliance Efficiency Awareness Project Legislation changes submitted, including funding for regulation tasks Regulations to implement law promulgated IMPROVE DELIVERY OF ENERGY EFFICIENCY PROGRAM INFORMATION 5 Assure that efficiency outreach, educational, and marketing efforts reflect best practices in design and delivery Identify best practices nationwide and implement statewide DPS and NYSERDA Evaluation Advisory Group members Best practices identified and implementation plan developed; plan shared with other program administrators Program success measured against stated objectives; successes and failures incorporated into program reform
Implementation Plan 102 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Produce, Deliver, and Use Energy More Efficiently Utilize the Evaluation Advisory Group to integrate efficiency program activity and streamline communication to consumers DPS DHCR, LIPA, NYPA, and NYSERDA Coordination with NYS investor owned utilities Integrated
- outreach, education and marketing plan developed; single web portal for programs designed Web portal implemented; marketing plan effectiveness evaluated 6 Use targeted outreach to deliver energy efficiency programs and services Identify and partner with community-based organizations to reach diverse groups with tailored messages DPS and NYSERDA DEC Coordination with NYS investor owned utilities Community organizations identified and programs tailored to local group needs Effectiveness of tailored programs and marketing evaluated and updated as necessary Effectiveness of tailored programs and marketing evaluated and updated as necessary Target industry marketing programs to support NY's Clean Energy Business Growth and high priority segments DPS and NYSERDA ESD Target plan completed and implementation initiated Effectiveness of targeted marketing evaluated and plan adjusted accordingly Target underserved markets NYSERDA DEC, DHCR, and DPS Coordination with the Environmental Justice Interagency Task Force Complete development of Green Jobs -
Green NY Rules; increase number of energy workshops and select workshop contractor; coordinate with Environmental Justice Task Force and communities Full implementa-tion of Environmental Justice plan promulgated Maintain the Energy Efficiency Clearinghouse Website and expand as appropriate NYSERDA DPS Website traffic evaluated for audience targeting; list of aggregation opportunities and agency partnerships developed Website effectiveness evaluated and adjusted accordingly 7 Supplement the Truth in Heating law to provide energy efficiency information of buildings to prospective purchasers Supplement Truth in Heating Law requirements DPS CPB State legislation Legislation submitted Regulations to implement law promulgated
Implementation Plan 103 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Produce, Deliver, and Use Energy More Efficiently 8 Explore energy-use benchmarking programs for buildings which includes public disclosure Explore statewide public disclosure of building energy use NYSERDA DPS, OGS, and other agencies that own buildings Participation of EPA, NYC EDC, NYC Mayors Office, REBNY, BOMA, local governments, utilities, large municipalities, private building owners, and ESCOs Evaluation of benchmarking policy options for New York State completed Phased plan for moving forward developed; initial disclosure requirement established Initial disclosure mechanisms implemented; evaluate and assess energy savings, costs of achieving savings, and impacts on property values and local tax base completed REDUCE FINANCIAL BARRIERS TO ENERGY EFFICIENCY INVESTMENTS 9 Identify and implement alternative financing programs to fund energy efficiency projects Implement revolving loan fund from Green Jobs -
Green NY Program NYSERDA Program launched Evaluate the need for, value and feasibility of on-bill financing or recovery and implement as appropriate DPS Conclude investigation of the barriers to on-bill financing and comparison with other sources of funding If warranted, develop implementation strategies to address barriers; expand or modify pilot programs based on ongoing evaluation Continue to implement strategies to address barriers IMPROVE ENERGY EFFICIENCY OF STATE GOVERNMENT BUILDINGS 10 Reduce energy use in State buildings Amend Executive Order 111 to improve process, scope, and metrics to help ensure progress toward consumption reduction goals Executive Chamber NYSERDA Executive Order 111 amended; improved agency data collection developed
Implementation Plan 104 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Produce, Deliver, and Use Energy More Efficiently Encourage State agencies and local governments to work with NYPA to take advantage of its efficiency financing programs NYPA Executive Chamber Program materials for NYPA's program developed and distributed to agencies Annual reporting of cost savings based on program participation initiated SUPPORT ENERGY EFFICIENCY POLICIES 11 Implement Energy Efficiency programs to reduce State electricity demand from projected levels Continue implementation of efficiency programs to meet '15 by 15' goal Executive Chamber DPS, LIPA, NYPA, and NYSERDA Coordination with NYS investor-owned utilities PSC actions on all proposed EEPS programs completed Report released on progress toward proposed goals; programs adjusted to ensure achievement of goals; efficiency programs evaluated for continuation beyond 2015 Ensure appropriate contribution of NYPA and LIPA to State efficiency goals LIPA and NYPA NYPA and LIPA report on efficiency programs and projected impact; programs adjusted to achieve statewide goals NYPA and LIPA contributions to efficiency goals measured; programs adjusted accordingly 12 Expand green transportation choices and use across the State Identify available green transportation choices and promote them DOT DEC, MTA, and NYSERDA Coordination with transit operators, local transportation agencies, and USDOT DOT programming principles realigned; advocate at the federal level; outreach efforts to MPOs and other transportation organizations developed; Clean Air NY and "511" utilized to promote alternative options for commuters Commuter choice and Travel Demand Management programs expanded statewide
Implementation Plan 105 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Produce, Deliver, and Use Energy More Efficiently Identify opportunities to expand green transportation choices DOT DEC, MTA, and NYSERDA Coordination with NY Congressional Delegation, USDOT, AASHTO, and American Public Transportation Association Changes in Federal guidance and Federal financial support in Surface Transportation Bill advocated for by NYS Federal Surface Transporta-tion bill established that supports commuter choice programs Enhanced version of Federal surface transporta-tion legislation developed State agencies include systematic consideration of transportation choices, energy use, energy conservation, and climate change as part of their State Environmental Quality Review Act reviews DEC DOT DEC provides training on SEQRA GHG guidance to other agencies and authorities; outreach to MPOs and other transportation agencies; Updated DOT guidance Review and update, as necessary Review and update, as necessary Endorse Smart Growth and GHG emission reductions as key principles in Transportation Plans and Transportation Improvement Programs DOT DEC and DOS Coordination with Smart Growth Cabinet and MPOs GHG benefits of Transportation Improvement Programs and Long Range Plans continue to be quantified; DOT's ability to quantify GHG emissions for rural areas and statewide plans is enhanced Updated DOT planning guidance that includes emission reduction and Smart Growth considerations 13 Support federal action to encourage energy efficiency and GHG reductions from the transportation sector Work with NY Congressional Delegation and transportation organizations to develop new funding formulas within the next Surface Transportation funding bill that provide incentives to states to reduce energy use DOT DEC Coordination with NY Congressional Delegation, AASHTO, and USDOT Federal Surface Transporta-tion bill established with new funding formulas that enable and encourage energy efficiency and emission reductions Funding enhanced in Federal surface transporta-tion legislation
Implementation Plan 106 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Produce, Deliver, and Use Energy More Efficiently Work with the federal government to strengthen the recently proposed CAFE standards Executive Chamber DOT, DEC, and NYSERDA Coordination with AASHTO, NY Congressional Delegation, and NACAA More aggressive standards and timetable for new CAFE Standards advocated and developed More aggressive CAFE standards for light duty cars and trucks established IMPROVE ELECTRIC SYSTEM EFFICIENCY 14 Encourage demand response As appropriate, direct implementation of cost-effective approaches and technologies that facilitate demand response to achieve reliability and other public policy objectives PSC NYSERDA Coordination of the NYISO Con Edison implements programs per PSC Order in C.09-E-0115; collaboration continued on improvements to the NYISO demand response programs Enhanced individual utility and the NYISO demand response programs initiated Evaluate and develop individual utility and the NYISO demand response programs as appropriate 15 Support investments in Smart Grid Work with the Smart Grid Consortium to develop action plans DPS, LIPA,
- NYPA, NYSERDA, and NYSTAR Coordination with DOE Continued participation in Consortium Meetings; Smart Grid Action Plan drafted Opportunities identified to advance Smart Grid technologies and viable options are implemented Smart Grid technologies and programs continuously evaluated The PSC should consider approving Smart Grid investments where they are shown to benefit ratepayers PSC Coordination with investor-owned utilities Utility proposals for Smart Grid investments considered Approved Smart Grid investments are deployed 16 Use electricity price signals to help level load and reduce generation requirements Study potential requirement that electricity be priced on a time of use basis for all customers DPS NYSERDA State legislation to require residential time of use pricing Time of use electricity pricing analyzed Upon a finding that it is in the public interest to do so, legislation submitted to allow residential requirement for time of use pricing Implement rate structures and metering requirements for non-residential customers that encourage shifting use of electricity to off-peak hours PSC Demand thresholds reduced as deemed appropriate by the PSC Continue to reduce demand thresholds as deemed appropriate by the PSC Continue to reduce demand thresholds as deemed appropriate by the PSC
Implementation Plan 107 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 17 Encourage energy storage deployments Define energy storage technologies under PSL, Section 2(2-b) as a means to facilitate permitting Executive Chamber DPS State legislation Submit legislation defining energy storage technologies Support Development of In-State Energy Supplies Chapter 3: Support Development of In-State Energy Supplies EXPAND AND IMPROVE RPS GOAL TO MEET '30 BY 15' GOAL 1 Encourage in-state renewable energy development through the Renewable Portfolio Standard Expand the RPS Program to meet the Governor's goal to meet 30 percent of the State's electricity needs with renewable resources by 2015 PSC NYSERDA Addressed by the PSC as part of Mid-Course Review Milestones developed based upon outcome of the PSC review Enhance certainty in the renewable energy market by scheduling regular solicitations for Main Tier procurements NYSERDA and PSC PSC order on RPS solicitation schedule Milestones developed based upon outcome of the PSC review Create a tracking and trading system for Renewable Energy Credits NYSERDA and PSC Coordination with the NYISO PSC addresses track and trade system as part of RPS mid-course review Milestones developed based upon outcome of the PSC review Continue to provide RPS incentives for environmentally beneficial, renewable distributed generation resources NYSERDA and PSC PSC addresses distributed generation systems as part of RPS mid-course review Milestones developed based upon outcome of the PSC review Examine the transmission system to identify and evaluate bulk transmission system upgrades or expansions needed for reliability NYPA and PSC Coordination with FERC and the NYISO DPS submits review of ongoing planning studies; appropriate actions and recommenda-tions developed based on review Recommenda-tions implemented based on continued review process and reassessments
Implementation Plan 108 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Support Development of In-State Energy Supplies COMPLEMENT THE RPS PROGRAM WITH BILATERAL CONTRACTS 2 Encourage the State's power authorities to procure diverse renewable electricity resource development NYPA and LIPA will report on the status of renewable energy projects in progress LIPA and NYPA Annual reports Annual reports Annual reports NYPA and LIPA will report on the total energy production capacity provided by renewable energy initiative projects including the electric capacity installed using renewable energy and purchased attributes by NYPA or on behalf of customers NYPA and LIPA Reports released annually from 2010 to 2015 Reports released annually from 2010 to 2015 Reports released annually from 2010 to 2015 Investigate options for cost recovery mechanisms for renewable energy projects to minimize ratepayer impact LIPA and NYPA Report released in 2010 LIPA and NYPA will pursue development of large scale solar projects LIPA and NYPA Initial projects from LIPA's first 50 MW Solar RFP operational; contractors selected for implementation of NYPA's 100 MW solar initiative All projects from LIPA's first 50 MW Solar RFP operational; second RFP opened depending on success of initial project; NYPAs 100 MW initiative becomes operational Projects from a potential 3rd solar RFP reviewed or will be operational LIPA will develop Renewable Resource Center as part of Smart Grid Corridor with smart meters installed on residential, commercial and industrial customers LIPA SUNY Farmingdale and SUNY Stony Brook Receipt of stimulus fund to help support project Software development completed; technology installations and construction initiated 3 Encourage LIPA and NYPA to proceed with issuing an RFP for the private development of offshore wind resources Report on status of offshore wind projects LIPA and NYPA Report issued Annual reports developed on viable projects Provide financial and technical support through other available State and federal resources LIPA and NYPA DPS, DOT, DOS, DEC,
Implementation Plan 109 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Support Development of In-State Energy Supplies NYPA to continue the RFP process for offshore wind in the Great Lakes NYPA RFP issued and creation of a short list of potential developers constructed If appropriate, project development begun and permit approvals obtained Licensing, construc-tion, and intercon-nection of offshore wind farm completed; offshore wind farm fully operational by end of 2015 The Long Island-New York City Offshore Wind Collaborative will issue a RFP for development of offshore wind facility off the Rockaway Peninsula LIPA and NYPA
- PANYNJ, MTA, and NYSERDA Support from other members of the Long Island-New York City Offshore Wind Collaborative RFP issued for development of the offshore Wind Farm and a short list of potential developers selected If viable, project development begun and permit approvals obtained If viable, licensing, construc-tion, and intercon-nection of offshore wind farm completed and operational FACILITATE THE DEPLOYMENT OF DISTRIBUTED RENEWABLES 4 Facilitate the interconnection of distributed generation resources to the electric grid Amend the net metering law for non-residential customers Executive Chamber State legislation Legislation submitted Examine the protocols used by the NYISO and utilities for connecting distributed generation sources to the grid DPS DEC and NYSERDA Coordination with the NYISO Advocacy initiated through stakeholder process at the NYISO for changes that encourage distributed generation, where appropriate, advocacy is taken to FERC Process improvements implemented as appropriate 5 Assess the potential for siting renewable energy projects on State-owned lands and waterways Inventory and analyze opportunities for renewable energy development on State-owned lands and waterways Executive Chamber State agencies and authorities owning land in NY Scope of work developed to implement resource characterization Geographic Information System database including exclusions and affected lands developed Process for installing renewable energy technologies on State facilities established Develop a process for installing renewable energy technologies on State facilities Executive Chamber
- DASNY, NYPA,
Implementation Plan 110 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Support Development of In-State Energy Supplies TARGET THE DEPLOYMENT OF NON-ELECTRIC GENERATING RESOURCES 6 Increase use of alternative fuels Determine the optimal fuel(s) for a substantial replacement of petroleum, considering environmental, economic and energy benefits DOT and NYSERDA DEC and OGS Coordination with transit operators, fleet owners, and Northeast Regional Transportation groups Analysis needs identified after completion of Biofuels Roadmap; contractor and sponsors identified for analysis; State institutions continue to use their fleets and facilities as test beds of alternative fuel technology Life-cycle analysis completed; utilization of petroleum alternative(s) increased; interstate coalition developed to foster alternative fuel technology development Based on analytical results and market conditions, continue transition to electricity and other optimal petroleum alternative(s) in the transporta-tion sector Provide financial incentives for alternative fuel infrastructure development DOT and NYSERDA Coordination with Municipalities Federal and State funds directed to support alternative fuel and electrification projects Alternative fuel support continued; 300 biodiesel and ethanol stations and 50 new compressed natural gas stations constructed selling fuel to the public; 200 new electric charging stations deployed Demonstra-tion of vehicle to grid technologies in 100 sites around New York implemented Encourage public and private fleets to purchase alternative fuel vehicles through incentives and mandates
- DOT, Executive
- Chamber, and NYSERDA OGS and state fleets Coordination with Municipalities New Executive Order signed for purchase of alternative fuel and vehicles by state fleets with assistance from the Clean Fuel Vehicle Council Purchase of 500 new private fleet alternative vehicles; demonstration of plug-in hybrid technologies for state fleet vehicles completed 1,000 plug-in hybrid and electric vehicles deployed in New York Educate end users on the economic and environmental benefits of alternative fuels DOT and NYSERDA DEC Host conferences to inform fleet managers and the public about the economic and environmental benefits of alternative fuels
Implementation Plan 111 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Support Development of In-State Energy Supplies Work with NY Congressional Delegation and transportation organizations to support federal and State tax incentives for fleet and private individual alternative fuel vehicle purchases, including infrastructure development DOT and NYSERDA DEC Federal and State legislation; engagement of transit operators Federal Heavy Duty Hybrid Vehicle tax credit extended past 2009; federal alternative fuel vehicle tax credit extended past 2010; NYS tax credits for alternative fuel infrastructure extended past 2010 Federal and State tax incentives aligned with conclusions of life-cycle analysis to encourage the use of optimal alternative fuels Adopt where practicable a regional low carbon fuel standard DEC and NYSERDA Ag&Mkts Coordinate with Northeast and Mid-Atlantic states Northeast &
Mid-Atlantic states Memorandum of Understanding complete; framework analysis for a regional low carbon fuel standard conducted; low carbon fuel options analyzed as part of the Climate Action Plan Pending outcome of
- analysis, regulatory framework pursuant to Memorandum of Understanding promulgated Pending outcome of analysis, low carbon fuel standard implement-ed 7 Support bioenergy production from sustainably managed feedstocks Complete Biofuels Roadmap NYSERDA Ag&Mkts and DEC Based on the
- Roadmap, develop market transformation strategies and commercializa-tion pathways for new technologies Update Biofuels Roadmap; continue appropriate actions to encourage biofuels production Analyze bioenergy options and identify strategies for promoting most sustainable/highest value use of biomass as part of the Climate Action Plan DEC Ag&Mkts and NYSERDA Climate Action Plan's analysis of bioenergy options completed Plan's recommenda-tions implemented; actions to promote viable bioenergy projects in NYS initiated Biomass use and sustainability monitored; activities for promoting biomass continued as appropriate Establish a wood boiler change out program to remove the high emitting and poor performing systems from the marketplace DEC and NYSERDA Potential funding opportunities identified; program commenced consistent with funding
Implementation Plan 112 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Support Development of In-State Energy Supplies Develop regional performance standards to accelerate the market introduction of new high performance bioheating systems DEC NYSERDA Coordinate with Northeast and Mid-Atlantic states and Northeast States for Coordinated Air Use Management The viability of a region-wide performance standard for bioheating systems investigated; model rules developed Regulation promulgated Work with EPA and DOE to develop ENERGY STAR standards for the top-tier of high-performance bioheating systems for residential and commercial applications NYSERDA EPA and DOE in coordination with Northeast and Mid-Atlantic states ENERGY STAR Standards established for bioheating systems Standards incorporated into NYSERDA incentive programs Provide financial and technical support to accelerate the market introduction of the top tier of bioheating systems -
consistent with ENERGY STAR standards developed with EPA and DOE NYSERDA Potential funding opportunities for the top tier of bioheating systems explored; bioheat technical and financial assistance programs launched Programs extended and assessment of progress of market transformation performed Work with NYS manufacturers to develop their capacity to deliver high performance bioheating systems NYSERDA ESD Incentives provided for expansion of manufacturing capacity; strategic partnerships with equipment providers facilitated NYS partners launch products to market Provide training to ensure that NYS has a skilled workforce to deliver services and products NYSERDA NYSDOL High-performance bioheating system curriculum integrated into NYSERDA's existing network of workforce training institutions 8 Extend the tax credit for bioheat Extend bioheat tax credit law beyond 2011 Executive Chamber State legislation Effect of scope and level of tax credit analyzed and screened against Biofuels Roadmap Legislation submitted
Implementation Plan 113 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Support Development of In-State Energy Supplies 9 Expand funding and implementation support for environmentally beneficial distributed energy resources Evaluate and provide appropriate funding mechanisms for existing renewable technologies
- LIPA, NYSERDA and PSC Effectiveness of current funding mechanisms evaluated Implement new or change existing funding mechanisms based upon evaluation Ensure funding of next generation technology development and infrastructure NYSERDA Effectiveness of current funding mechanisms evaluated Implement new or change existing funding mechanisms based upon evaluation ENCOURAGE DEVELOPMENT OF NATURAL GAS RESOURCES IN A RESPONSIBLE MANNER 10 Support private interest and investment in drilling in the Marcellus Shale natural gas reserves in an environmentally acceptable manner Establish final DEC regulatory requirements for drilling and pipeline construction DEC DOH DEC regulatory requirements for drilling in Marcellus Shale completed Regulatory framework implemented Program amendments implemented as deemed necessary Coordinate regulatory requirements for drilling and pipeline expansions DEC and DPS Report issued on number of applications in queue, number of permits issued and average length of processing Study the potential for private investment in extracting natural gas in the Marcellus Shale on State-owned lands OGS State agencies that own land with resource potential Report on State-owned lands eligible for leasing in the Marcellus Shale formation released Environmental assessments of tracts sought for leasing conducted Environmen-tal assessments continued Chapter 4: Invest in Energy and Transportation Infrastructure TAKE STEPS TO ADDRESS CLIMATE CHANGE 1 Identify steps to mitigate and adapt to the impacts of climate change Develop a Climate Action Plan in accordance with Executive Order 24 Executive Chamber Ag&Mkts, DASNY, DEC, DHCR, DOB, DOS, DOT, ESD, LIPA, MTA, NYPA,
- NYSERDA, and PSC Stakeholder participation Draft Climate Action Plan completed Implementa-tion of Climate Action Plan initiated Plan implementa-tion continued with adjustments as appropriate
Implementation Plan 114 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Invest in Energy and Transportation Infrastructure ENCOURAGE CLEANER GENERATION INVESTMENTS 2 Improve the siting process for generators Develop a fuel neutral power plant siting law that provides greater market certainty to developers and investors and enhances public participation with sufficient intervenor funding Executive Chamber DPS State legislation Legislation submitted 3 Facilitate demonstration of Carbon Capture and Sequestration technology Develop legislation that addresses CO2 pipeline siting and CO2 injection to facilitate the demonstration of Carbon Capture and Sequestration technology Executive Chamber State legislation Legislation submitted 4 Support repowering Encourage and facilitate the repowering and replacement of existing electric generation to increase energy efficiency and reduce overall actual emissions and environmental impacts DEC, DPS and NYPA DEC reasonable available control technology regulatory revisions completed with incentives to promote re-powering; feasibility of power purchase agreement for repowering projects considered Facilities move forward with commitment for re-powering Repowered facilities on-line INVEST IN TRANSMISSION AND DISTRIBUTION INFRASTRUCTURE 5 Systematically examine and evaluate the State's transmission and distribution infrastructure LIPA to implement a $500 million, 20 year program to reduce electrical transmission and distribution system exposure to severe storms LIPA
$20 million per year for storm hardening program and $5 million per year for rights-of -
way maintenance committed Complete a LIPA and National Grid assessment of the LIPA transmission and distribution assets system health review to formulate strategic goals to maintain infrastructure reliability LIPA Final report complete Implementation plan of strategic goals is developed; annual updates are released Annual reports updated with new strategic goals and plans when necessary
Implementation Plan 115 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Invest in Energy and Transportation Infrastructure Complete the New York State Transmission Assessment and Reliability Study to identify the long term transmission reliability needs of the New York Control Area DPS, LIPA and NYPA Coordination with NYS investor-owned utilities and the NYISO Technical analysis and cost benefit assessment completed Implementa-tion plan for long term needs completed Implementa-tion plan initiated For needed transmission system upgrades or expansion, address cost allocation issues PSC Coordination with FERC Upgrades and expansions identified; PSC proceeding initiated; PSC decision on cost allocation 6 Amend Article VII for siting of transmission lines and pipeline Amend PSL Article VII to indicate State or local approvals shall apply in connection with the Uniform Fire Prevention and Building Code Executive Chamber DPS State legislation Legislation submitted 7 Investigate use of existing rights-of-way Inventory existing transportation corridor rights-of-way that could be used for new energy infrastructure facilities and existing utility corridors that are underutilized or could be re-configured to accommodate new facilities Executive Chamber DOT, DPS, MTA and TWY FHWA, PANYNJ engaged in right of way discussions; coordination begun with Broadband Council; major utilities engaged in discussion and data gathering; owners of transportation rights-of-way included in coordination Inventory and analysis of existing rights-of-ways completed; meetings with Highway Administra-tion proceed to discuss amendment of co-location policy for limited access highways If appropriated, FHWA and DOT accommoda-tion policy revised; development of a
comprehensive state agency database of all existing utility and transportation rights-of-way completed SUPPORT TRANSPORTATION INFRASTRUCTURE INVESTMENTS 8 Encourage federal investment in public transportation Seek more federal funding for public transportation within the next Federal Surface Transportation funding bill DOT and MTA Coordination with NY Congressional Delegation, AASHTO and USDOT Federal funding increased to double public transportation ridership nationwide; separate intercity passenger rail funding mechanism created by Congress
Implementation Plan 116 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Invest in Energy and Transportation Infrastructure 9 Allow for more private investment in public transportation Allow private individuals and businesses to provide direct public transportation infrastructure investments in return for State income tax credits Executive Chamber DOT and MTA State legislation Budget implications identified and, if appropriate, legislation submitted Pending negligible budget
- impact, legislation passed and enacted, tax forms developed, and guidance and policy by Taxation and Finance implemented 10 Encourage federal investment to improve the efficiency of the transportation system Encourage federal financial support for more energy efficient transportation infrastructure and systems DOT MTA Coordination with NY Congressional Delegation, AASHTO and USDOT Federal Surface Transportation bill that supports maintenance of system, electrification of the system and retains Congestion Mitigation and Air Quality program and creates a similar program for GHG reduction Enhance energy efficiency transporta-tion infrastructure funding in subsequent transporta-tion legislation Chapter 5: Stimulate Innovation in the Clean Energy Economy Stimulate Innovation in the Clean Energy Economy SUPPORT CLEAN ENERGY TECHNOLOGY DEVELOPMENT 1 Strengthen and expand collaboration between the intellectual and professional resources in the State's public and private institutions Expand the New York Battery and Energy Storage Technology (NY BEST)
Consortium NYSERDA Federal and industry co-funding Initial research projects started; testing facilities identified and made available; Consortium Coordinator selected; strategy developed to successfully compete for a federally funded Innovation Hub Initial round of projects completed; new projects started based on available funding; 1-2 commercial products launched by NY BEST partners Additional commercial products launched by NY BEST partners; NY BEST established as an independent, self-sustaining organization
Implementation Plan 117 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Stimulate Innovation in the Clean Energy Economy Foster the development of clean energy incubators and regional clean energy clusters of related industries and research entities, aiming to accelerate technology commercialization and entrepreneurship NYSERDA ESD and NYSTAR Six clean energy incubators launched in NY focusing on unique regional strengths; support for regional clusters is expanded The first round of companies "graduate" from the clean energy incubators with a commercial product launch; additional private capital is leveraged Additional companies "graduate" from the clean energy incubators; additional private capital is leveraged Use emerging networking technology and methods to foster collaborations among clean energy business incubators, entrepreneurs, investors, and researchers NYSERDA NYSTAR A clean energy business networking platform is developed and deployed; inventory of clean energy research and technology development assets in-state is developed Global clean energy resources are incorporated onto the network platform 2 Implement where practicable, the recommendations of the Task Force on Diversifying the New York State Economy through Industry-Higher Education Partnerships Create a forum for stimulating ideas on the future of New York States clean energy economy Executive Chamber
- ESD, NYSERDA and NYSTAR Coordination with institutions of higher education, research laboratories, and companies Forum established to
- identify, analyze, and implement best practices on fostering business incubation, growth, and emerging technology commerciali-zation 3 Support the growth of clean energy technology companies in New York Increase focus of State incentives and economic development assistance on clean energy companies and component manufacturers and service businesses ESD and NYPA
- NYSERDA, NYSTAR and PSC Coordination with Investor-owned utilities ESD's Strategic Plan revised; coordination on use of grants, loans, tax incentives, and power allocations within existing legislative authority developed
Implementation Plan 118 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Stimulate Innovation in the Clean Energy Economy Enhance entrepreneurial and commercialization assistance to early-stage companies developing clean energy technologies NYSERDA ESD, LIPA, NYPA, and NYSTAR New funding structures that meet the needs of early-stage companies and sources of capital are developed; feasibility of launching a Clean Energy Seed fund to better leverage private capital is explored Assistance provided to support clean energy business growth; track and monitor progress Assistance provided to support clean energy business growth; track and monitor progress 4 Support and enhance research and development of next-generation clean energy technologies in the energy and transportation sectors Use state funding commitments to leverage large federal funding programs, such as Energy Innovation Hubs and Energy Frontier Research Centers NYSERDA NYSTAR DOE funding opportunities Federal funding programs identified, programs and protocols for organizing and supporting multi-party proposals developed Tracking and monitoring of federal cofunding into NY for energy technology development initiated Ensure that any national carbon cap and trade program provides the states with flexibility to invest auction proceeds into accelerating the market introduction of next generation/emerging clean energy technology Executive Chamber DEC and NYSERDA Coordination with NY Congressional Delegation to advance federal legislation Provide recommended language to the NY Congressional Delegation Provide recom-mended language to the NY Congressional Delegation Support the development, demonstration, and testing of new clean energy technologies to help NYS achieve its RPS, EEPS, and carbon mitigation goals and simultaneously provide opportunities to create and grow clean energy businesses in NYS NYSERDA DPS Coordination with Investor-owned utilities An emerging technology and pre-deployment demonstration program is developed to accelerate the adoption of tested but new or improved technologies Programs executed and new technologies introduced in the market Programs executed and new technologies introduced in the market Continue the collaborative DOT and NYSERDA partnership to develop and test sustainable transportation technologies and systems DOT and NYSERDA Extend the existing interagency Memorandum of Understanding; next round of project demonstrations launched Project demonstra-tions continued; expanded sustainable technology introductions in the field introduced Project demonstra-tions continued; expanded sustainable technology introductions in the field introduced
Implementation Plan 119 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Stimulate Innovation in the Clean Energy Economy Expand marketing of made-in-New York clean energy products to strategic international markets ESD NYSERDA Trade shows with optimum prospects located; comprehensive international marketing materials created and distributed to target markets Access into key international markets targeted; attraction of international investment that supports the States clean energy manufacturers and service companies expanded Marketing materials and distribution reviewed and revised as international markets shift Demonstrate the feasibility of electrification of the transportation system across all modes of transportation
- DOT, NYSERDA, and OGS DEC Coordination with port operators, airport operators, rail lines, airlines, USDOT, DOE, Transportation Research Board and National Academy of Sciences; federal funding legislation Federal support encouraged for R&D in electrification of transportation system for all modes; studies completed to identify sites and technology needed for plug-in locations; research and funding opportunities identified Demonstration projects started; feasibility assessed; State agencies use of plug-in hybrids in light duty fleets increased Infrastructure changes mandated to make vehicle-to-grid application a possibility; electrification encouraged by tying funding to electrifying transportation projects DEVELOP THE CLEAN ENERGY WORKFORCE 5 Coordinate all agencies involved in workforce training, and partner with citizen groups to expand the existing network of clean energy workforce training sites Make clean energy training curricula standard for SUNY and CUNY schools.
NYSDOL and NYSERDA SUNY Collaboration with CUNY Pilot curricula and program established Pilot program evaluated and expansion to other schools initiated Continue planning efforts of the NYS Sector Strategy Advisory Group initiated under the National Governors Association NYSDOL DHCR, ESD, and NYSERDA Coordination with Workforce Development Institute, Long Island Forum for Technology and U.S. Department of Labor Proposal submitted to U.S. DOL to address the clean energy shortage in skilled workers and training capacity; upon proposal
- approval, implement initial sector strategy Evaluate and update sector strategy
Implementation Plan 120 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Stimulate Innovation in the Clean Energy Economy 6 Dedicate funding for pathways out of poverty programs to train unskilled workers for clean energy jobs Expand NYSDOL'S Workforce NY Training Inventory used by the One Stop System NYSDOL DHCR, DOS,
- NYSERDA, and OTDA Implement Career Pathway initiatives funded under EEPS Workforce Program; programs target Community Benefit Organizations and Environmental Justice Communities Training Inventory updated and expanded as necessary 7 Coordinate a statewide workforce strategy to address the workforce needs of the State's clean energy industry Develop a statewide comprehensive strategy to assure an adequate workforce to meet energy efficiency and renewable energy goals NYSDOL DHCR, ESD,
- NYSERDA, and OTDA Develop a Draft Statewide Strategy Document and implement strategy across agencies to assure that all sectors and workforce development needs are addressed Complete Implementa-tion of Statewide Strategy ATTRACT NEW FIRMS AND TRANSITION EXISTING FIRMS THAT WILL THRIVE IN A CARBON CONSTRAINED ECONOMY 8 Expand economic development programs to attract clean energy industries Use NYPA economic development power programs to attract clean energy industries, as allowed by statute Executive Chamber ESD and NYPA Marketing plan with measurable objectives is developed Plan implementa-tion commenced Extend expiring NYPA economic development power programs, including Power for Jobs Executive Chamber NYPA State legislation Submit legislation Agencies and utilities will collaborate in the development and marketing of economic development programs ESD DPS, NYPA and NYSERDA Investor-owned utilities Agency collaborative completed to review and align economic development marketing programs for attraction and retention of clean energy companies
Implementation Plan 121 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 9 Incentivize NYPA's economic development customers to invest in cost-effective energy efficiency measures Reform NYPAs economic development power programs to condition receipt of benefits on implementation of feasible energy efficiency improvements Executive Chamber NYPA State legislation Submit legislation Chapter 6: Engage Others in Achieving the States Policy Objectives Engage Others in Achieving the States Policy Objectives IMPROVE PLANNING 1 Facilitate consistency among multiple levels of government Revise the City, Town, Village, and General Municipal Laws to incorporate energy considerations in Comprehensive Plans Executive Chamber DOS State legislation Legislation drafted and general outreach to municipalities conducted Legislation submitted; ongoing outreach continues to engage municipalities in energy and comprehen-sive planning Develop Tax Increment Financing reform legislation to encourage the redevelopment of distressed communities and revitalize downtown areas Executive Chamber State legislation and collaboration with the Smart Growth Cabinet Submit legislation Promote land use patterns that reduce reliance on vehicle trips DOS and DOT Collaboration with the Smart Growth Cabinet, MPOs, regional planning councils, and county, town, and city governments Increased Smart Growth and other planning grants devoted to regional collaboration on transportation and land use; DOT developed project development criteria favors projects with energy efficient land use and transportation components Emphasis on prioritizing projects that promote Smart Growth and collaborative planning included in the DOT and MPO programming; regional Smart Growth cabinets established State assistance geared toward funding for projects that integrate land use and transportation planning with the goal of Smart Growth development outcomes and patterns
Implementation Plan 122 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Engage Others in Achieving the States Policy Objectives Provide technical assistance and funding opportunities via State grant programs for local and regional energy planning and implementation activities that help meet State energy goals.
- DOT, NYSERDA and other agencies as applicable Municipal action needed to prepare and adopt local plans Realignment of existing programs initiated Appropriate modifications to existing State programs are completed; collaborative strategy for outreach and technical assistance is initiated Majority of adopted comprehen-sive plans include energy components; local implementa-tion of projects under way Promote land use and zoning tools that support Smart Growth DOS Municipalities would need to adopt and use these measures Municipalities adopt and use planning and zoning tools; State planning grants and assistance promote these tools These tools become the norm in municipal comprehen-sive plans and zoning ordinances Majority of adopted comprehen-sive plans and zoning include one or more of these measures Pursue transit oriented development strategies DOS, DOT and MTA Coordination with transit operators and local governments Outreach to operators and localities initiated; pilot effort in Hudson Valley developed; changes made to local zoning Ongoing technical assistance and education provided to municipalities through existing training programs; transit oriented training extended to upstate areas following pilot effort Major urban areas have adopted transit oriented development through comprehen-sive local plans ENCOURAGE LOCAL ENERGY INITIATIVES 2 Promote Climate Smart Communities Increase the number of communities participating in Climate Smart Communities DEC, DOS,
- NYSERDA, and PSC Municipal action needed to prepare and adopt local plans and implement projects 5% of NY local governments have adopted the pledge, set up climate programs, and begun at least one climate-related project; progress report prepared and released 20% of NY local governments have adopted the pledge, set up climate programs, and completed projects; progress report prepared and released 40% of NY local governments have adopted the pledge, set up climate
- programs, and completed projects; progress report prepared and released
Implementation Plan 123 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Engage Others in Achieving the States Policy Objectives ENCOURAGE COMMUNITY AND CITIZEN PARTICIPATION IN ENERGY DECISIONS 3 Address the energy-related public health and safety needs of communities Enhance mechanisms for early, fair and meaningful public involvement Agencies responsible for energy permitting Agencies have examined their permitting and guidance protocols to enhance the opportunity for public involvement Implementa-tion of enhanced protocols completed Implementa-tion reviewed for improvement to reflect additional opportunities for public involvement Develop energy facility siting and permitting procedures to assess and consider disproportionate environmental burdens in potential environmental justice areas DEC DOH Procedure for disproportion-ate environmental burden determination incorporated in permitting processes and SEQRA Guidance and regulations for cumulative impact analysis proposed Guidance and regulations implemented Incorporate procedures in the Report of the Health Outcome Data Work Group into facility siting and permitting processes DEC and DOH Procedures incorporated into permitting processes and SEQRA Further data provided to permitting processes and SEQRA proceedings COLLABORATE REGIONALLY 4 Collaborate regionally to advance the State's clean energy goals Develop a New York offshore ocean plan to identify appropriate areas for renewable energy development and transmission, in coordination with neighboring states and federal agencies DOS DEC, LIPA,
- NYPA, NYSERDA, and PSC Collaboration on plan development with neighboring states, federal agencies, local governments and non-governmental organizations Offshore ocean use plan initiated; use analysis, plan options and alternative scenarios assessment developed; necessary state-focused work groups initiated NY Coastal Management Program amended to implement offshore ocean plan and initiate implementa-tion; Great Lakes plan initiated NY Coastal Management Program amended for Great Lakes offshore plan; plan implementa-tion begun Ensure continued progress in addressing regional clean energy issues through the leadership of the Northeast Mid-Atlantic Governors Clean Energy Forum DOS DEC, LIPA,
- NYPA, NYSERDA, and PSC Collaboration among forum participants Federal financial incentives, investment opportunities and regulatory actions to spur clean energy development in the Northeast and Mid-Atlantic states identified &
promoted Federal legislative and policy changes integrated into regional energy planning First offshore project constructed in the region
Implementation Plan 124 RECOMMENDATIONS LEAD AGENCIES SUPPORTING AGENCIES COLLABORATION AND OTHER ACTION NEEDED FOR PROGRESS MILESTONES FOR COMPLETION ACTION ITEMS 2009 - 2010 2011 - 2013 2014 - 2018 Engage Others in Achieving the States Policy Objectives Advance multi-state actions through the interstate Mid-Atlantic Governors Agreement on Ocean Conservation that will improve the region's competitiveness for offshore renewable energy projects DOS DEC Collaboration among states, federal agencies and other stakeholders Multi-state work groups developed with MMS and FERC to address offshore renewable energy permitting and project siting issues; State and federal offshore planning mechanism initiated Integrated state and federal offshore renewable energy planning regime under way; regional regulatory and permitting framework institutiona-lized Next phase of regional planning effort and identification of regional regulatory obstacles and data needs initiated INFLUENCE NATIONAL POLICY 5 Optimize coordination and collaboration with the federal government to ensure that New York's energy policy objectives and strategies will be advanced at the national level Work more closely with FERC to address issues of common concern for Smart Grid investments PSC LIPA and NYPA Coordination with Investor-owned utilities, the NYISO and Smart Grid Consortium Participation in FERC NARUC Collaborative initiated Provide regular briefings to NY Congressional Delegation on the State's energy programs and policies Executive Chamber LIPA, NYPA,
- NYSERDA, and PSC Periodic Delegation meetings proceed with appropriate energy planning board agencies Periodic Delegation meetings proceed with appropriate energy planning board agencies Periodic Delegation meetings proceed with appropriate energy planning board agencies
Stakeholder Input 125 A1 Stakeholder Input The following individuals and organizations have provided input to this Energy Planning Process.
Stakeholders Submitting Comments on the Draft State Energy Plan 100 Precinct Community Council Abel, Sharon Acosta, Marge Adirondack Council Aird, A. Douglas Allen, Michael Alliance for Clean Energy New York (ACE NY)
Alternative Energy for Your Car and Home (AEYCH)
Amberge, Sarah Anaren, Inc.
Anbaric Holding, LLC Apfel, Sarah Applebum, Daniel Arnold Lake Owners Association Arnold, Matthew Ashmead, John Assemblymember Kevin A. Cahill Atlantic Sea Island Group, LLC Audubon New York Ault, Brian Ballou, Joseph Bamberger, Dr. Michelle Baran, Jayne Barbell, Sharon Barber Abel, Judith Baron, Esq., Charles Bryan Bartoc, Cristian Bauman, Allen Bisson, Robert F.
Blayer, Cynthia Bobis, Daniel Bochenek, James Bohan, III, Joseph P.
Boilermakers Local Lodge No. 5, Zone 175 Boilermakers Zone 197 Bradham, Michael Bradley, David Breen, Richard Brownlie Design Buckley, Peter Building and Construction Trades Council of Nassau and Suffolk Counties Bushwick Food Coop Butler, Dr. Edward Buxbum, Diane Cafarelli, Dr. Cenie Caldwell, Brian Castelluccio, Louise Cavagnaro, Roberta Chapman Aird, Geri Chichura, Dr. Diane Citizens Campaign for the Environment Citizens Environmental Coalition City of Long Beach City of New York Clean Energy Clean Ocean Action and the American Littoral Society Columbia University Consolidated Edison Company of New York, Inc. (Con Edison) and Orange and Rockland Utilities, Inc. (O&R)
Constellation Energy Coronel, Linda Couch, Debra Cox, Pamela Crago, Marcelle Croton Watershed Clean Water Coalition Cusworth, William Cycle Planet
Stakeholder Input 126 Stakeholders Submitting Comments on the Draft State Energy Plan (continued)
Dalton, Julia Dammen, Darrell Danby Land Bank Cooperative Danis, Steven D'Arco, Lawrence de Aragon, Fernando Delanoy, Dennis DeMare, Luanne Dent, Michael DeVine, Cheryl Dillmann, George Dobson, Carol Douglas, Mary Dowling College (Townsend School of Business)
Doyle, Eugene Drake, J.
Draper, NYU, SCPS, Dr. Susan Droz, John Durgin, Christina E Cubed Company, LLC on behalf of Joint Supporters EcoEnergy Solutions, LLC Ehrman, Rhonda Ellis, Cathy Empire State Petroleum Association EMPOWERTY!
Energy Saving Solution, LLC Energy Vision EnerNOC, Inc.
Entergy Corporation Environmental Advocates of New York Epstein, Susan Evans, A.S.
Evans, Julia C.
EverPower Ewanco, James Falco, Bonnie Fast, Ingo Feldschuh, Jeremy Fetty, Karen E.
Fischer-Harbage, Laura Fitzgerald, Judy Flashner, B.
Fortuna Energy, Inc.
Fowle, William Frame, Ph.D., George W.
Frogel, Arnold M.
Full Plate Farm Collective CSA Funk, Ilse Garcia-Macri, Saveria Genen, Ruth Genesee Regional Biofuels Gill, David R.
Giordano, John Giordano, Vincent Go Express Gold, Marilyn Goldberg, Robert Goldsmith, Patricia Gonzalez-Stewart, Andres Gordon, Hayley GRACE Great River Craniosacral Therapy Institute Greater Long Island Clean Cities Coalition Greco, Claudia GreenLogic Grimm, Susan Gunter, Karlene Gunther, Robert Haber, Arnold Hajinlian, Arlene Hand, David L.
Handler, Elizabeth Harrington, Kathleen Heckler, Wilma Heid, Denise Herbers, Jill Hersh, Charles A.
Herskovits, Kathryn Heying Beilby, Ph.D., Mary Hiller, Catherine Hiller, Marty Hodes, Harold T.
Hofner, Diane Hofstra University Hopkins, Steve Horn, Andrew Hudson Valley Gateway Chamber of Commerce in Peekskill Hunter-Durante, Debra Hynes, Matt IdaTech, LLC
Stakeholder Input 127 Stakeholders Submitting Comments on the Draft State Energy Plan (continued)
Independent Power Producers of New York (IPPNY)
Institute for Policy Integrity, New York University of Law International Assoc. of Heat & Frost Insulators
& Allied Workers International Brotherhood of Electrical Workers Invidiata, BJ Jamaica Bay Ecowatchers Jereski, Robert John Hopkins Bloomberg School of Public Health Joyce, Alice Jutt, David Kaler, Bill Katz, Ira & Ellyn Kaufman, Craig Kayz, Tanya Keiser, John L.
Kelly, Ronald Kennedy, Brian Keramaty, Valery Klossner, J. Scott Kohn, MD, Joseph Kohut, Matthew Korth, Audrey Kramer, Doug Krupp, Laurie Ksenich, Roger A.
Landau, Dr. John Lapin, Kevin Latella, Gail Legislator Dave Denenberg, Nassau County Lepore, Thomas Lessard, Louise Liebowitz, Terri Lighting Research Center at RPI Linde North America Livsey, Richard Loeb, Rema LoFurno, Susan Loughran, Mark Lynne, Susan Lyons, Vicki MacInnes, Diane Mack, Rhoda MACNY, The Manufacturers Association Mader, Deborah Maisel, MD, Barry Manas, Mark Mania, Sharon Marcellus Accountability Project Marist College Martinson, Casey Massena Electric Department Mendez, Nelson Millennium Pipeline Company, LLC Millwright and Machinery Erectors, Local Union No. 740 Mirsakov, Alexander Montefiore Medical Group Moriarty, Lawrence Morin, Tatiana Moros, Rebecca Moros, Sarah Multiple Intervenors Muratore, Dr. Joseph F.
Nakai, Yugo Natale, Chris National Academy of Sciences National Federation of Independent Business (NFIB)
National Fuel Gas Distribution Corp.
National Grid National Photovoltaic Construction Partnership, LLC Natural Resources Defense Council Nature Conservancy Nelson, Kurt New Fuels Alliance New Leaders for New Schools New York Affordable Reliable Electricity Alliance (NY AREA)
New York Biomass Energy Alliance New York Building Congress New York Energy Consumers Council New York Independent System Operator (NYISO)
New York Interfaith Power & Light New York Solar Energy Industries Association (NYSEIA)
Stakeholder Input 128 Stakeholders Submitting Comments on the Draft State Energy Plan (continued)
New York Solar Energy Society New York State Electric and Gas (NYSEG) and Rochester Gas & Electric (RG&E)
New York State Office of Parks, Recreation, and Historic Preservation (OPRHP)
New York State Reliability Council Nicholls, Alison Northeast Gas Association Novak, Melinda NRG Energy, Inc.
NRG Insulated Block Nuclear Age Peace Foundation, NY NYC Chapter of the Surfrider Foundation NYH20 NYS Adirondack Park Agency NYS Metropolitan Planning Organizations Omega Institute for Holistic Studies Oswego Revitalization and Betterment Corporation (ORBC)
Ouderkirk, James Overton, Ned Pace Energy and Climate Center (PACE)
Paone, Michael Papa, Lisa Parker, Deborah Parks, Natalie Parsons, Jeremy Partnership for New York City Paul Gold Real Estate Pearl, Amanda Perkins, Beth Peters, Amy Peterson, Cameron Phillips, Dr. Steve Piccolo, Dr. Daniel Plug Power Point Lobster and Fish Popow, Dimitry Porter Jr., Charles J.
Power for Economic Prosperity Power, Nancy Preiss, Eleanor Price, John Rannacher, Jan Raubuck, Andrew Reese, Douglas Rendinaro, Allison Renewable Energy Long Island Rhodes, Don Ribbs, Bette A.
Rice, Mary Riverkeeper, Inc.
Rockaway Park Homeowners & Residents Rockaway Waterfront Alliance (RWA)
Rockwood, Leona Romer, Evan Roraima Consulting, Inc.
Rosen, Terry Rulon, Gilbert Ruth, Aptacker Rutledge, Marcia Ryczak, Sandra Saak, Jason Safe Water Movement Saltzman, Dolores Sanders, Mallory Savoia, Maria T.
Scarola, Thomas Scenic Hudson Schongalla, M.D., Ann Schongalla, Nils Schur, Michael Scullard, Mary Ellen Seltz, Laura Senator Darrel J. Aubertine Senator Joseph A. Griffo Seneca One Realty LLC Service Employees International Union 32BJ (SEIU 32BJ)
Shaw, Carole Shideler, Stephanie Shuler, RN, Eudora F.
Siegel, Steven Sierra Club Atlantic Chapter Sierra Club Long Island Group Sixdegreen, Inc.
Slote, Karen Slutsky, MD, Jordan Soleil, Katheryn South Shore Audubon Society South Yaphank Civic Spatz, David
Stakeholder Input 129 Stakeholders Submitting Comments on the Draft State Energy Plan (continued)
Spectra Energy St. Regis Mohawk Tribe Staten Island Taxpayers' Association Staten Island Tuna Club Stauffer, Elenna Stivers, Frank Stoher, Joel Stone Quarry House Superior Software Logic, Inc.
Sustainability Institute at Molloy College Sustainable Otsego, Action Otsego Sweeney, Mary Talbott, Kyle Temple, Michele Tennessee Gas Pipeline Thacker, Cheryl The Solar Alliance Three Parks Independent Democrats Thurber, Caitlin Thurmond, Judy Tobier, Elizabeth Tomkins, D.
Triano, Elizabeth Trotta, Kevin Truscinski, John Turn Home Green U.S. Environmental Protection Agency Uashaunnuat, the Innu of Uashat mak Mani-Utenam Upper Green Side Valentine, Jennifer Van Hooreweghe, Kristen Vestal Coalition Viridian Energy and Enviromental LLC Vote Solar Members Vote Solar Initiative Waldo Tribune Wasserman, Max Watts Architecture and Engineering Wechter, Dorothy West, Laura Westchester County Board of Legislators Wieder, Robin Williams WNY Sustainable Energy Association &
Climate Action Coalition Wright, Lisa Yale University Yes We Can! Long Island Yost, Wendy Yusuf, Moe Zack, Jake Zerbe, Faith
Stakeholder Input 130 Stakeholders Providing Oral Testimony at the Energy Plan Hearings August 18, 2009, SUNY Canton Borderlands Energy CAMP/Clarkson University Clarkson University Coakley Carpet One Ace Hardware Community Energy Services Local 1 Massena BDC Massena Electric Department McClellan, Robin National Grid Ogensburg Bridge & Port Authority Senator Darrel J. Aubertine SUNY Canton UniStar Nuclear Energy August 21, 2009, Hunter College, Manhattan Business Council of Westchester Center for Working Families Citizens Campaign for the Environment Columbia University Con Edison Croton Watershed Clean Water Coalition E Cubed Company, LLC Emacy Systems, Inc.
Just Bulbs - The Light Bulb Store Laborers Union National Grid New York Presbyterian Hospital NYU Medical Center Pace Energy Sierra ClubNYC Group Triplepoint Energy August 24, 2009, SUNY Buffalo Adirondack Mountain Club/Buffalo Audubon Assemblymember Sam Hoyt Beahan, Toby Boilermakers Local 7 Buffalo Niagara Partnership Buffalo Wind Action Group Casell, Mark Champ, Douglas Citizens Campaign for the Environment City of Niagara Falls Gibson, Ellen Hufnagel, James August 24, 2009, SUNY Buffalo (continued)
Hughesco of Buffalo, Inc.
Joya, Christopher Kurasz, Janet Phillips Lytie LLP RS Energy Solutions Sierra Club - Adirondack Sierra Club University at Buffalo, Outdoor Pursuits August 25, 2009, Broome County Forum Theatre, Binghamton Aures, Rosemary Bates Troy, Inc.
Broome Community College Catskill Citizens for Safe Energy Cayuga Onondaga BOCES Citizens Campaign for the Environment City of Binghamton Earthkind Energy ETM Solar Works Farm Catskills Olum's Tioga Peace & Justice Unshackle Upstate September 9, 2009, SUNY Farmingdale, Long Island American Lung Association in New York Assemblymember Marc S. Alessi Atlantic Sea Island Group, LLC Barlowe, Warren C.W. Post Citizens Campaign for the Environment City of Long Beach Clean Ocean Action Coalition of Labor for Energy & Jobs Concerned Citizens of Montauk Dann, Wendy Dowling College Townsend School of Business Empire Clean Energy Supply Environ Energy Green Logic Hersh, Charles Legislator Dave Denenberg, Nassau County Lindroth, William LNG Island Task Force Long Island Solar Energy Industries Association
Stakeholder Input 131 September 9, 2009, SUNY Farmingdale, Long Island (continued)
National Grid New York Solar Energy Industries Association North Merrick Civic Association NY AREA Quinn, Peter Renewable Energy Long Island Sunation Solar Systems, LI and NY Solar Energy Industry Associations Sustainability Institute at Malloy College Water Film Energy, Inc.
September 10, 2009, Brooklyn College, Brooklyn 100 Precinct Community Council American Institute of Architects, New York Chapter Clean Ocean Action Fisherman's Conservation Association/NY Sportfishing Federation Hartigan, Joe Insulators Local 12 Island Insulation Services IUPAT DC 9 Millwrights Local 740 National Grid New York Academy of Sciences Natural Resources Defense Council New York Solar Energy Industries Pratt Center for Community Development Rockaway Park Homeowners & Residents Association Safe, Healthy, Affordable and Reliable Energy (SHARE)
Sierra Club Atlantic Chapter Sierra Club New York City Group Signorelli, John Simansky, Victor Stubbin, Peter Surfrider Foundation, NYC Chapter Sustainable South Bronx Teamsters 456 The City University of New York Williams Energy September 15, 2009, Legislative Office Building, Albany ACT Bioenergy Action Otsego and Sustainable Otsego Adirondack Mountain Club Alliance for Clean Energy NY Boilermakers Local 5 Zone 197 Business Council of NYS Center for Working Families Clough Harbor & Associates Community Power Network of NYS Conservation Services Group Davis, Stephen Earl B. Feiden, Inc.
Ener-G-Rotors Environmental Advocates Hudson Valley Community College Independent Oil and Gas Association Independent Power Producers of New York International Paper MACNY, The Manufacturers Association Mesa Reduction Engineering & Processing Multiple Intervenors National Grid NEEP New England Wood Pellet & New York Biomass Council NYAREA New York Biomass Energy Alliance New York Independent System Operator New York Laborers NYPIRG NYSEG & Rochester Gas and Electric New York Solar Energy Industry Association Olsen, James Pataki Cahill Group Plug Power RPI Lighting Research Center Shaleshock Citizens Action Alliance Sustainable Otsego and Arnold Lake Owners Association The Solar Alliance U.S. Energy Independence Consortium Vote Solar Warren, Barbara Zero Pint Clean Tech, Inc.
Stakeholders Providing Oral Testimony at the Energy Plan Hearings
Stakeholder Input 132 September 24, 2009, SUNY New Paltz, Kingston Assemblymember Kevin A. Cahill Boilermakers Local 5 Catalyst Renewables Central Hudson Gas & Electric Earthkind Energy Empire Advocates/Deepwater Wind Empire State Regional Council of Carpenters Entergy EverPower Wind Holdings Greenspirit Hess Corporation/Retail Energy Supply Assoc.
Hudson Valley Clean Energy, Inc.
Millwright Local 740 New York Solar Energy Society Rockland Business Association SunEdison and The Solar Alliance The West Law Firm September 26, 2009, SUNY IT, Utica Abbene, Angelamae Abbene, Michael JAY-K Independent Lumber Malcolm Pirnie National Grid New England Wood Pellet & NY Biomass Council Pataki Cahill Group/Brookfield Power Rome Area Chamber of Commerce Unitrac Energy Management Stakeholders Providing Oral Testimony at the Energy Plan Hearings
Stakeholder Input 133 Stakeholders Submitting Comments on the Draft Scope A. Page & Associates LLC Adirondack Council Air Products and Chemicals, Inc.
Alliance for Clean Energy New York, Inc.
American Wind Power & Hydrogen LLC Audubon, New York Bay Area Economics Business Council Capital District Transportation Authority (CDTA)
Capital Region Energy Forum Central Hudson Gas & Electric Corporation Citizens Campaign for the Environment Communities Against Regional Interconnect Consolidated Edison of New York, Inc./Orange
& Rockland Utilities ConsumerPowerline, Inc.
Multiple Intervenors CPV Valley, LLC Dave Bencic Dormitory Authority of the State of New York Energy Council for Citizens Power Alliance Elizabeth Thorndike, Ph.D.
Empire Advocates Energy $mart Park Initiative Energy Association EnerNOC, Inc.
Environmental Advocates of New York Fuel Cell Energy Healthy Planet, Inc.
Horizon Wind Energy LLC Independent Power Producers of New York, Inc.
Innovative Energy Systems, Inc.
John Droz, Jr.
Liberty Power Holdings, LLC National Energy Marketers Association National Grid National Hydrogen Association National Wind Watch, Inc.
Neighborhood Network Network for New Energy Choices New York Association of Public Power New York Aviation Management Association New York City Economic Development Corporation New York Energy Consumers Council, Inc.
New York Energy Marketers Coalition New York Interfaith Power and Light New York Lawyers for the Public Interest New York State Apollo Alliance New York State Office of Temporary and Disability Assistance New York State Reliability Council Northeast Gas Association NYSEG/RG&E Onondaga County Resource Recovery Agency Oppenheim & MacGregor Pace Law School Energy and Climate Center Plug Power Power for Economic Prosperity Riverkeeper, Inc.
Sierra Club Small Customer Marketer Coalition Solar Alliance and New York Solar Industry Association Stamford Village Planning Board SUNY College of Technology The Solar Alliance The West Firm TransCanada Corporation Workforce Development Institute
Stakeholder Input 134 Stakeholders Submitting Comments on the Interim Report Aaron Breidenbaugh, EnerNOC, Inc Adirondack Council Allan R. Page, The Hudson Renewable Energy Institute, Inc.
Alliance for Clean Energy New York, Inc.
Atlantic Sea Island Group, LLC Boilermakers Local 5 Business Council of New York State Business Council of Westchester Capital Region Energy Forum Central Hudson Gas & Electric Corporation Citizens Campaign for the Environment Consolidated Edison and Orange and Rockland Utilities, Inc.
David Bradley, Lake Effect Energy, LLC Deepwater Wind LLC Dewey & LeBoeuf EarthKind Energy, Inc.
EcoPerspectives Empire State Petroleum Association, Inc.
FuelCell Energy Green Map System Iberdrola Renewables, Inc.
Independent Power Producers of New York, Inc.
Institute for Policy Integrity Joint Comments of Pace and Environmental Advocates Michael Abbene Michael Jung, Silver Spring Networks Millwright and Machinery Multiple Intervenors Multiple Intervenors Supplemental Comments National Grid New York Independent System Operator New York Sierra Club Atlantic Chapter New York State Rural Electric Cooperative Association, Inc.
Northeast Energy Efficiency Partnerships, Inc.
Northeast Gas Association and its New York Planning Committee North Wind & Power NYC Economic Development Corporation New York State Metropolitan Planning Organizations New York Retail Energy Supply Association Partnership for New York City Power for Economic Prosperity Rockland Business Association Roraima Consulting, Inc.
Spectra Energy Corp The Energy Association of New York State The Solar Alliance
Stakeholder Input 135 Stakeholders Submitting General Comments Alice Sokolow, Citizens Power Alliance Andy McEvoy Anne Harris, Town of Lyme Archimandrite George Schaefer, Holy Trinity Monastery Barry K. Miller, PE, Concerned Citizens of Cataraugus County Boyce Sherwin, Regional Solutions Capital Region Energy Forum Central Hudson Gas & Electric Corporation Citizens Campaign for the Environment Citizens Environmental Coalition Cohocton Wind Watch Cole Peterson Colleen Green Consolidated Edison Cynthia Blair, Citizens Power Alliance Dan Wing, Cohocton Wind Watch Debra Burns, Naples Valley Bristol Hills Association Diane Rutigliano Doreen Marturano Elizabeth M. Mosher FuelCell Energy, Inc Glenn R. Schleede Guarracina Family Hall, Matilsky, and Sokolow, Cohocton Wind Watch and Advocates for Prattsburgh Hans Mueller Harold Hambrose, Cape Vincent Hilarion, ArchBishop of Sydney, Australia and New Zealand Independent Power Producers of New York, Inc.
J. Taranola James M. Brbour James White Janet Haskins Jennifer Anderson Jim Sawicki Joan Simmons, Citizens Power Alliance Joe Visalli John Cowley John Malizia, Fishermen's Conservation Association Justine M. Meccio Karen Anderson Karl Burmeisters Katie Hay Kevin Connor Laura-Li Loffredo Le Moyne College Biology Linda E. Chiofolo Mary V. Connor Maryann Mueller Mary Beth Yadanza Mass Dispensation Engine Concept Maura Gregory Mellany T. Hale Michael G. Saccullo Michael S. Carrington N. Taranola National Grid New York City Energy Planning Board P. Santiago Ortega Pace Energy and Climate Center, Environmental Advocated of New York, Inc. /Alliance for Clean Energy New York, Inc.
Peter Leonard Phil Bariteau, Naples Valley Bristol Hills Association Ronald D. Morrison Ronald Gulmi Ronald Iocono Ruby Garzon Schleede Critical Evaluation Shane Nickel Shelley Taranola Timothy Doyle Wayne Miller
Stakeholder Input 136 Stakeholders Attending ECWG Stakeholder Meetings Adirondack Council Adirondack Energy $mart Park Coalition Alliance for Clean Energy New York American Lung Association Apollo Alliance Association for a Better Long Island Association for Energy Affordability Association of Towns of New York State Babylon, Town of Buffalo Niagara Partnership Business Council of New York State Citizens Campaign for the Environment Clean Energy for Jamestown Community Energy Services, Inc.
Consolidated Edison Company of New York Empire State Petroleum Association Energy Association of New York State Environmental Advocates of New York Hauppauge Industrial Association Healthy Planet IBEW Local 236 Independent Power Producers of New York Innovative Energy Systems Jamestown Board of Public Utilities Long Island MidSuffolk Business Action Long Island Oil Heat Institute Multiple Intervenors National Grid Nature Conservancy Neighborhood Network Network for New Energy Choices New York Association of Public Power New York Aviation Management Association New York Bicycling Coalition New York City EDC New York Energy Consumers Council New York Farm Bureau New York Independent System Operator New York Lawyers for Public Interest New York League of Conservation Voters New York Motor Truck Association New York Propane Gas Association New York Public Transit Association New York State Association of Counties New York State Association of Service Stations
& Repair Shops New York State Association of Town Highway Superintendents New York State Conference of Mayors New York State Reliability Council New York State Rural Electric Association New York Thruway Authority Niagara Frontier Transportation Authority Northeast Gas Association Oneida-Madison Electric Cooperative Pace Energy Port Authority of New York & New Jersey Preservation League of New York State Regional Plan Association Renewable Energy of Long Island Retail Energy Supply Association Riverkeeper, Inc.
Rockville Center, Village of Scenic Hudson Shell Gas & Power Sierra Club Small Customer Marketer Coalition Suffolk County SUNY - Stony Brook Advanced Energy Research & Technology Center Taylor Biomass Energy UPROSE Vote Solar Initiative Workforce Development Institute
ATTACHMENT 19
Page 1 Copyright 2012 The New York Times Company The New York Times March 21, 2012 Wednesday Late Edition - Final SECTION: Section A; Column 0; National Desk; Pg. 11 LENGTH: 1273 words HEADLINE: As Reactors Age, the Money to Close Them Lags BYLINE: By MATTHEW L. WALD BODY:
WASHINGTON -- The operators of 20 of the nation's aging nuclear reactors, including some whose licenses expire soon, have not saved nearly enough money for prompt and proper dismantling. If it turns out that they must close, the owners intend to let them sit like industrial relics for 20 to 60 years or even longer while interest accrues in the reactors' retirement accounts.
Decommissioning a reactor is a painstaking and expensive process that involves taking down huge structures and transporting the radioactive materials to the few sites around the country that can bury them. The cost is projected at
$400 million to $1 billion per reactor, which in some cases is more than what it cost to build the plants in the 1960s and
'70s.
Mothballing the plants makes hundreds of acres of prime industrial land unavailable for decades and leaves open the possibility that radioactive contamination in the structures could spread. While the radioactivity levels decline over time, many communities worry about safe oversight.
Bills that once seemed far into the future may be coming due. The license for Vermont Yankee in Vernon, Vt., at 40 the nation's oldest reactor, expires on Wednesday, for example. And while the Nuclear Regulatory Commission has granted its owner, Entergy, a new 20-year permit, the State of Vermont is trying to close the plant.
In New York, Gov. Andrew M. Cuomo has vowed to force the two operating reactors at another Entergy plant, In-dian Point, 35 miles north of Midtown Manhattan, to shut down when their licenses expire in 2013 and 2015 by denying them state environmental permits.
Entergy is at least $90 million short of the projected $560 million cost of dismantling Vermont Yankee; the com-pany is at least $500 million short of the $1.5 billion estimated cost of dismantling Indian Point 2 and 3.
The shortfall raises the possibility that Vermont could tend one sleeping reactor for decades while New York over-sees three; Unit 1, another reactor at Indian Point, shut down in 1974 and has yet to be dismantled.
Even the Nuclear Regulatory Commission's chairman is uneasy about the prospect of a 60-year wait.
These facilities should be cleaned up, and their footprints reduced as much as possible so that these areas can be returned to other productive uses within the community, the chairman, Gregory B. Jaczko, said recently.
Gil C. Quiniones, the president and chief executive of the New York Power Authority, a state utility that sold In-dian Point 3 to Entergy in 2000, called Entergy's failure to plan for or finance the decommissioning of Indian Point in real time stunningly irresponsible.
Page 2 As Reactors Age, the Money to Close Them Lags The New York Times March 21, 2012 Wednesday
Delaying action for 60 years -- when Entergy might no longer even exist -- is offensive to the communities of Westchester County and the people of New York, he said. James Steets, a spokesman for Entergy, said that financing would not be a problem because the company still expects to obtain new 20-year licenses for Units 2 and 3, which would allow time for savings to grow, and to prevail on the state permit issue.
Assuming that the plants remain open for two more decades, the company has promised Westchester County that it will decommission Indian Point in a reasonable period of time after the reactors close, probably in the 2030s.
Of the 20 reactors that lack the money for swift deconstruction, the owners hope that license renewals from the Nu-clear Regulatory Commission will make the problem go away. For the plants that are fighting with their host states, Indian Point and Vermont Yankee, the federal courts may have the final say on whether and how long they keep operat-ing. (A large demonstration in favor of closing the plant is planned for Wednesday at Vermont Yankee.)
The remaining 84 active reactors have enough savings on hand to satisfy the commission's minimum financing re-quirements for eventual dismantling, some of them because they won license extensions.
The nuclear industry had been counting on steady returns on the funds and did not anticipate the 2008 market crash.
Altogether the nation's 104 power reactors have about $40 billion on hand. A lot of decommissioning funds did take a hit at the nadir of the economic crisis, said Scott Burnell, a spokesman for the regulatory commission.
One plant, Palisades in western Michigan, had $597.6 million saved up at the end of 2006, but the account was down to $218.8 million two years later and was only $279.2 million by the end of 2010, the most recent figures show.
Bruce Biewald, an economist who specializes in electricity economics at Synapse Energy, a Boston consulting firm, said the mothball strategy carries risks that could outweigh benefits. Proponents say it's like magic -- compound interest on the one hand and radioactive decay on the other, he said. (Because radioactivity levels decline over time, deconstruction workers would ultimately be exposed to less contamination.) But future investment returns could prove bleak, Mr. Biewald warns, and anticipated deconstruction costs could easily rise.
Responding to a petition from Sherwood Martinelli, an antinuclear activist who lives near Indian Point, Dr. Jaczko, the regulatory commission chairman, sought a shorter period between closing and dismantling.
But in October, Dr. Jaczko (pronounced YAZZ-koh) was outvoted 4 to 1 by his fellow commissioners. And the commission's staff said that even 60 years was not a hard-and-fast outer time limit for suspending a reactor's operations.
In the industry, this status is known as Safstor and it usually involves putting the spent nuclear fuel into storage casks on site, draining many of the plant's fluids, making security arrangements and maintaining the reactor so it looks like a decent neighbor.
Environmental experts say the plants can be dangerous when they are not running. In a letter, the three members of Vermont's Congressional delegation pointed out that 55,000 gallons of contaminated water spilled out of a mothballed plant in Illinois after a pipe froze. An attentive night watchman was credited with catching the spill in time to contain it.
Indian Point 1 has leaked a variety of radioactive materials into the soil on the banks of the Hudson in the 38 years since it closed, a point acknowledged by Entergy, which responded by emptying a spent fuel pool that was the source of the problem. The environmental group Riverkeeper argues that this is a harbinger of further trouble if Units 2 and 3 enter Safstor.
Compounding the worries about radioactive materials, the nation still lacks a permanent repository for spent nu-clear fuel after decades of jockeying by politicians who sought to bar it from their backyards. So the fuel at the sleeping reactors will remain on site.
Twelve reactors across the country have been retired in the last three decades, all on short notice, because of a de-sign or safety flaw that the economics did not justify fixing. The low price of natural gas, a competing fuel, makes the economic lifetime of existing reactors uncertain.
Some have been decommissioned in a few years, like Connecticut Yankee, whose owners, a group of New England utilities, footed the cost. Decommissioning started two years after its 1996 shutdown and was completed in 2005 at a cost of $871 million.
In Haddam, Conn., officials are still advertising for a new industrial tenant for its former site on the east bank of the Connecticut River.
Page 3 As Reactors Age, the Money to Close Them Lags The New York Times March 21, 2012 Wednesday Asked if tearing it down had been the right call, Paul J. DeStefano, the town's first selectman and top official, said,
I'm a little hesitant, from a layman's standpoint, of having something sitting around for 60 years. It just doesn't sound right.
URL: http://www.nytimes.com GRAPHIC: PHOTOS: The license for the Vermont Yankee nuclear power plant, on the Connecticut River, expires Wednesday. Federal regulators plan to renew the license, but the State of Vermont is opposed. (PHOTOGRAPH BY JASON R. HENSKE/ASSOCIATED PRESS)
Rusted valves at the closed Indian Point 1 reactor in New York, which was shut in 1974. The one on the left, in a con-tainment spraying system, was photographed in 2006 the other one in 2007. (PHOTOGRAPHS BY THE NUCLEAR REGULATORY COMMISSION, VIA ASSOCIATED PRESS) MAP: Facing Suspended Animation: Twenty operating nuclear power reactors across the nation lack sufficient funds for their decommissioning. Their owners have signaled that if those reactors close in the next few years, they will remain standing for decades in a condition known as Safstor while companies try to accumulate enough money to safely dismantle them. (Sources: Nuclear Regulatory Commission U.S. Dept. of Energy)
LOAD-DATE: March 21, 2012
ATTACHMENT 20
NOAA Office of Ocean and Coastal Resource Management : Energy and...
http://coastalmanagement.noaa.gov/ene_gov.html 1 of 2 7/27/2012 4:32 PM Coastal Issues I Energy and Government Energy and Government Facility Siting Meeting energy needs and increasing the United States' energy independence are two of the highest priority national issues of the Coastal Zone Management Act (CZMA). The CZMA recognizes the importance of energy and government facilities in coastal zones.
and directs states to have a facility siting process that considers the national interest in energy production and protecting coastal resources.
Facilities that explore, develop, produce, transmit or transport energy or energy resources in coastal and ocean areas provide significant benefits to coastal states and the nation -- energy, jobs, and energy self-sufficiency. However, energy facilities also can affect natural, historical, cultural, and/or aesthetic resources in the coastal zone. Energy facility siting, like other coastal-dependent uses, should be given priority consideration when managing coastal uses pursuant to the CZMA. Energy facility siting needs to be compatible with other coastal-dependent uses such as navigation, fishing and mariculture, coastal tourism, and recreation.
Recent increases in the price of oil and gas have resulted in a number of renewable energy sources becoming economically viable options. A greater number of proposals for developing wind, tidal, and Under the CZMA, coastal-dependent uses, including these energy facilities along Mississippi's Gulf Coast, should be given preference over other land uses within the coastal zone.
other renewable energy sources are appearing in the nation's coastal zone.
Through coastal management policies and planning processes, coastal managers can address energy and government facility siting within the coastal zone to protect coastal resources and preserve national energy interests.
In Depth: Examples of energy facilities that have been, or are planned to be, sited in the coastal zone.
To address energy needs, reduce coastal use conflicts and preserve coastal resources, state coastal management programs must have policies and planning processes to address energy and government facility siting that could affect the coastal zone. Planning for energy facilities can be challengi ng.
Coastal managers must coordinate with a variety of authorities at federal and state levels. Plans should be proactive and not reactive to individual energy facility proposals. Even when sited in suitable areas, there can be "not in my backyard" opposition. In addition, for many of the newer renewable energy facilities, there is often limited information available on the coastal impacts from siting or operating these facilities For additional information, contact David Kaiser.
Resources NOAA Resources
- NOAA Energy Overview
- NMFS Office of Habitat Conservation, Renewable Ocean Energy
- National Climatic Data Center (NCDC), Renewable Energy Data Sources (solar and wind) (collaboration with DOE's National Renewable Energy Laboratory)
- National Sea Grant Law Center, Offshore Renewable Energy Regulatory Primer
- Multipurpose Marine Cadastre (in cooperation with MMS)
NOAA Office of Ocean and Coastal Resource Management : Energy and...
http://coastalmanagement.noaa.gov/ene_gov.html 2 of 2 7/27/2012 4:32 PM Other Federal Agency Resources Minerals Management Service (MMS)
- Offshore Oil and Gas Leasing
- Offshore Renewable Energy Federal Energy Regulatory Commission (FERC)
- Liquefied Natural Gas (LNG)
- Hydropower MMS/FERC Guidance on Regulation of Hydrokinetic Energy Projects on the OCS Department of Transportation (DOT), Maritime Administration (MARAD)
- Deepwater Port Licensing Program Department of Energy (DOE)
- Office of Fossi I Energy
- Office of Energy Efficiency and Renewable Energy o Wind and Hydropower Technologies Program o National Renewable Energy Lab
- Energy Information Administration
- Database of State Incentives for Renewables and Efficiency (project funded by DOE and led by the N.C. Solar Center and the Interstate Renewable Energy Council)
U.S. Fish and Wildlife Service (USFWS)
- Wind Energy
- Interim Guidelines to Avoid and Minimize Wildlife Impacts from Wind Turbines Environmental Protection Agency (EPA)
- Clean Energy Program
- Prevention of Significant Deterioration (PSD) permit
- National Pollutant Discharge Elimination System (NPDES) permits (tQQ)
Revised July 07, 2011 I Acronyms Used I Questions? Contact Us I Report Errors I Disclaimer I Privacy Policy NOAA's National Ocean Service I National Oceanic and Atmospheric Administration I U.S. Department of Commerce http://coastalmanagement.noaa.gov I Website Owner: Office of Ocean and Coastal Resource Management I USA.gov About the Site I Site Map I Freedom of Information Act (ForA) I Information Ouality
ATTACHMENT 21
STATE OF NEW YORK PUBLIC SERVICE COMMISSION SEP 0 4 2I1iri At a session of the Public Service Commission held in the City of Albany on August 29, 2001 COMMISSIONERS PRESENT:
Maureen O. Helmer, Chairman Thomas J. Dunleavy James D. Bennett Leonard A. Weiss Neal N. Galvin CASE 01-E-0040 - Joint Petition of Consolidated Edison Company of New York, Inc. and Entergy Nuclear Indian Point 2, LLC, for Authority to Transfer Certain Generating and Related Assets and for Related Relief.
ORDER AUTHORIZING ASSET TRANSFER (Issued and Effective August 31, 2001)
BY THE COMMISSION:
INTRODUCTION On January 11, 2001, Consolidated Edison Company of New York, Inc. (Con Edison) and Entergy Nuclear Indian Point 2, LLC (Entergy) submitted, pursuant to Public Service Law §70, a joint petition seeking authority to transfer Con Edison's nuclear generating facilities and related assets to Entergy.
The Administrative Law Judge assigned to this matter conducted a procedural conference on February 9, 2001.
Subsequently, on March 16, the active parties submitted written statements of their positions and concerns about the proposed transfer.
Initial comments were filed by Department of Public Service Staff (Staff), the State Attorney General's Office, Westchester County, the City of New York, the Town of Cortlandt,
.~ f CASE Ol-E-0040 the Hendrick Hudson School District, Pace Energy Project, Environmental Advocates, Utility Workers Union of America (AFL-CIa Local 1-2) and Mr. John J. Mavretich.
Thereafter, on April 5, 2001, Con Edison and Entergy initiated settlement negotiations pursuant to 16 NYCRR 3.9.
The petitioners met with interested persons in an effort to address their concerns.
Following the settlement discussions, on August 8, Con Edison, Entergy and Staff filed a Joint Proposal.
The Joint Proposal recommends that we approve the transfer of the nuclear generation facilities on certain terms and conditions, and that we find that it is in the pubic interest.
By notice issued on August 8, 2001, interested persons were invited to comment on the Joint Proposal.
Comments were received on August 17 from the Attorney General's Office and jointly from the Town of Cortlandt and the Hendrick Hudson School District.
Also, on August 20, the Administrative Law Judge conducted an on-the-record conference with the active parties to discuss the Joint Proposal and the comments concerning it.
While Cortlandt and the School District submitted comments on August 17, by letter dated August 28, 2001 they notified the Commission of their agreement in principle with Entergy concerning local property tax matters.
As part of the Town's and the School District's agreement with Entergy, they immediately withdrew, without limitation, their intervention, appearance and opposition in this proceeding.
Accordingly, Cortlandt's and the School District's withdrawn comments are not addressed in this order.
THE JOIN~ PETITION Con Edison proposes to sell to Entergy its retired Indian Point 1 unit, its operating Indian Point 2 generating facility, three gas turbines, various ancillary facilities, the real estate in Buchanan where the facilities are located and the Toddville Training Center in Cortlandt.
The real, p2rsonal and intangible property included in the sale are specified in the petitioners' November 9, 2000 Asset Purchase and Sale Agreement
,r CASE Ol-E-0040 (APSA).
Con Edison will receive $502 million (subject to various adjustments and prorations) plus the book value of its nuclear fuel and fuel oil inventories. 1 Con Edison will also transfer to Entergy $430 million held in decommissioning funds.
Entergy will assume full responsibility for decommissioning the Indian Point units and restoring the site.
Entergy will also take title to and be responsible for the ultimate disposal of the spent nuclear fuel used at the Indian Point facilities.
In addition to the APSA, Con Edison and Entergy have executed various other agreements, including a Power Purchase Agreement (PPA), an Indian Point Continuing Site Agreement,2 a Guarantee Agreement,3 a Declaration of Easements Agreement,' and a Site Ground Lease. s The PPA requires Entergy to sell to Con Edison (through 2004).all the energy that Indian Point 2 generates, except for the auxiliary power the facility consumes and 45 MW of station use energy.
On average, Con Edison will pay $39/MWh 1
2 3
4 S
In January 2001, the inventories had a book value of.$107 million.
The Continuing Site Agreement addresses Con Edison's and Entergy's on-going relationship.
It covers the services each provides the other, information reporting systems, communication protocols, interconnection matters, access to each other's property, and the testing, operation and maintenance of various systems and equipment.
The Guarantee Agreement executed by Entergy's parent, and certain subsidiaries, secures the performance of Entergy's obligations up to the time of the closing.
Thereafter, certain post-closing financial assurances will be provided to Con Edison.
The Declaration of Easements Agreement specifies the access, operations, and maintenance easements that are being granted and retained by the parties.
The Site Ground Lease Agreement provides Entergy a SOO-year lease for a parcel of land adjacent to the Buchanan Substation where two gas turbines are located.
The lease permits Entergy to purchase the land if subdivision approval is obtained.
CASE 01-E-0040 for this electric energy.6 Entergy is not obligated to provide Con Edison any energy when Indian Point 2 does not operate; however, Entergy is committed to use commercially reasonable efforts to schedule plant maintenance and outages outside the summer period.
The petitioners have also asked us to determine that the assets being transferred are "eligible facilities" pursuant to the Public Utilities Holding Company Act.
This determination would permit the Federal Energy Regulatory Commission (FERC) to treat Entergy as an exempt wholesale generator.
THE JOINT PROPOSAL Terms and Provisions The Joint Proposal contains the regulatory terms and conditions Staff recommends, and the Petitioners would accept, to transfer *the nuclear generation assets to a new owner.
For the most part, it addresses market power concerns, accounting requirements, and ratemaking matters.
The Joint Proposal addresses market power concerns related to Entergy adding 990 MW of net summer capability to the other facilities it owns and operates in New York.
Con Edison not only would purchase the energy produced at Indian Point 2 pursuant to the PPA, it would also purchase the plant's installed capacity by entering into a Capacity Purchase Transaction Agreement (CPTA).
Con Edison would purchase the plant's capacity through April 2005 and be able to exercise options to purchase the capacity for up to another six years if Energy does not commit it to a third party.
Con Edison would be entitled to recover from ratepayers all reasonable payments it makes pursuant to the PPA and the CPTA.?
6
?
The price for energy in August) is $46.80/MWh.
$36.40/MWh.
the summer period (June through In other months the price is If, by the.?ummer of 2005, the CPTA's capacity prices differ by more than 25% from the then current market prices, the agreement can be reopened.
CASE Ol-E-0040 Any gain or stranded costs resulting from the sale of these facilities would be governed by the Commission's outstanding rate orders. a In sum, Con Edison and Staff have identified the types of costs that can be included in the calculation of the gain or loss, and they have agreed to a Staff audit of the costs Con Edison claims for their accuracy and reasonableness.
The gain or loss would be deferred pending a final disposition. 9 The Joint Proposal also addresses:
capital costs Con Edison incurred to reinforce the electric system for the Buchanan gas turbines; pre-paid nuclear refueling expenses; injury and damages; investment tax credits; Department of Energy charges; nuclear insurance matters; and, any proceeds available from claims and litigation.
Con Edison will stop collecting nuclear asset costs in the Monthly Adjustment Clause (MAC) with the first MAC charge filed sqbsequent to the sale.
Absent a Commission order to the contrary, the company will flow through to customers all payments made pursuant to the PPA and the CPTA. lO Supporting Statements Con Edison and Entergy urge us to adopt the Joint Proposal's terms that resolve Staff's issues and address the relevant matters other parties raised.
According to them, the proposed terms for the sale protect consumers and provide ratepayer enhancements.
a 9
10 Case 96-E-0897, Consolidated Edison Company of New York, Inc. - Electric Rates, Opinion No. 97-16 (issued November 3, 1977); Opinion No. 00-14 (issued November 30, 2000).
The Joint Proposal acknowledges that the costs Con Edison incurred to replace the Indian Point 2 steam generators are being examined in Case 00-E-0612.
It recognizes that the company's right to recover its capital costs is subject to audit and any costs found to be unreasonable or imprudent will not be included in the computation of its regulatory
'assets or its credits from the sale.
To accommodate Westchester County, Con Edison has fully withdrawn its request to share in the savings that are expected from the PPA's electric price provisions.
CASE 01-E-0040 The petitioners assert th2t the sale of the nuclear assets is consistent with the competitive electric market we have fostered.
They state that the divestiture of these assets conforms to the guidance given to public utilities when electric industry restructuring began. 11 They also point out that Con Edison conducted an auction to establish the assets' market value and to obtain the maximum amount for them.
According to Con Edison and Entergy, the sale terms are advantageous because they minimize the risks to ratepayers that Indian Point 2 could be rendered uneconomic.
In particular, they point out that Entergy will assume the financial, operating, decommissioning, environmental and market risks for the nuclear facilities.
By virtue of the PPA and the CPTA, customers will obtain electricity price savings and hedges against high energy and capacity prices.
Con Edison estimates that the PPA savings (based on current market prices) are between $60 and $100 million over the life of the agreement, all of which inures to customers.
In support of the Joint Proposal, Staff states that the sale of the nuclear assets is structured to preserve electric service reliability.
Staff evaluated the auction process Con Edison used and determined that it was conducted in a fair and reasonable manner.
Staff also reviewed Entergy's winning bid and concluded that it is favorable.
Staff has confirmed that Entergy has secured financing to acquire the assets and that it has the experience needed to operate the nuclear facilities in a competitive environment.
Staff has also examined the petitioners' underlying transactions and agreements and considers them to be reasonable.
Staff also notes that Entergy will provide continued employment for all Indian Point personnel except certain high-level managers.
With respect to any horizontal market power Entergy may be able to exercise from owning other generation facilities acquired from the New York Power Authority and Indian Point 2, Staff is satisfied that the PPA precludes Entergy from obtaining 11 Case 94~E-0952, Competitive Opportunities in Electric Service, Opinion No. 96-12 (issued May 20, 1996).
CASE 01-E-0040 monopoly profits in the near term.
Moreover, as additional generation facilities are constructed and begin to operate, Staff expects Entergy's relative market share to decrease.
To guard against Entergy exercising power in the ICAP market that the New York Independent Operator operates, the CPTA provides a means of mitigating the potential for Entergy to profitably exert market power in this market for the next eleven years.
COMMENTS CONCERNING THE JOINT PROPOSAL The Office of the Attorney General (OAG) is opposed to ratepayers paying stranded costs if the sale of the nuclear generation facilities fails to produce sufficient proceeds to cover book costs.
It is also concerned about having access to the Indian Point facilities, records and personnel for the ongoing investigation of the steam generator replacements in Case 00-E-0612.
According to Staff, the sale of the nuclear assets to Entergy is not expected to cover all of Con Edison's costs.
Staff estimates that Con Edison will incur a $154 million 10SS.12 OAG contends that any such stranded costs should not be recovered from customers.
It believes that customers should only pay market-based prices for Indian Point.
OAG urges that Con Edison's shareholders be assigned the risks and the cost of management's actions and the uneconomic investment in these facilities.
In the circumstances presented here, OAG believes the Commission should adopt a rate adjustment disallowing otherwise prudently incurred costs.
It urges us not to wait for any upcoming proceeding to rule on the proper treatment of these costs.
With respect to the steam generator replacement investigation in Case 00-E-0612, OAG points out that the parties to the proceeding require continued access to pertinent Indian 12 The purchase price for the generation facilities is about
$90 million less than their book value.
Con Edison also expects to incur about $7 million of divestiture-related costs on the transaction and must provide $15 million for the decommissioning trust funds.
Federal income taxes amount to about $21 million.
CASE Ol-E-0040 Point information to submit testimony that is scheduled for April 2002.
OAG believes Entergy should be required to preserve the plant documents and information it acquires as a result of the transfer and to make it available for use in Case 00-E-0612.
DISCUSSION AND CONCLUSION The proposed sale of Con Edison's nuclear generation plants, and the associated facilities, generally comports with the policies the Commission announced in 1996 to open the electric system to competition and allow companies to compete to sell their power.
Commission adopted a Con Edison rate plan electric generation In 1997, the and settlement proposal that substantially opened the competitive market for generation services in New York City and Westchester.
Subsequently, in 2000, the Commission adopted a second rate plan that remains in effect until March 2005 and addresses Con Edison's opportunity to recover stranded and strandab1e costs remaining as of March 31, 2005.
To its credit, the Joint Proposal elicited substantially less opposition than did Con Edison's previous rate proposals and restructuring plans.
In this instance, the record provides substantial support for us to authorize the proposed transfer of the nuclear generation assets.
Con Edison ran a fair and competitive auction process that produced an acceptable bid from Entergy.
With respect to Staff's valid concerns about Entergy exercising horizontal market power, we are satisfied that the Joint Proposal provisions Staff obtained will adequately restrict any such opportunities and promote the operation of a competitive marketplace.
With respect to the comments OAG submitted, we reject its proposal to address the ultimate recovery of Con Edison's nuclear stranded costs at this time.
To do so would be contrary to the rate and restructuring plan in place that addresses Con Edison's opportunity to recover such costs.
Instead, we are adopting the Joint Proposal's accounting provisions and ratemaking_requirements that permit the issue of stranded cost recovery to be considered in due course.
CASE Ol-E-0040 Also, with respect to Entergy's acquisition of the Indian Point facilities prior to the completion of Case OO-E-612, OAG is correct that the transfer of the facilities should in no way hinder the parties' pending investigations.
For purposes of that proceeding, parties should have the same access to the Indian Point records, personnel, and facilities as they would have had there not been a transfer.
As to decommissioning matters, the Commission finds that the proposed sharing mechanism set for in the ASPA is acceptable.
It provides that if Entergy does not immediately decommission the Indian Point generating facilities via dismantlement and removal at the end of the Indian Point 2 operating license (i.e., should Entergy place the plants into Safstor or decommission by entombment), 50% of the funds remaining in the decommissioning trust funds upon completion of the alternate or delayed decommissioning will be returned to ratepayers.
This is a reasonable and fair allocation of the potential benefits and risks being transferred by Con Edison and being assumed by Entergy.
In summary, we have considered the joint petition and the agreements Consolidated Edison and Entergy have executed to transfer the Indian Point facilities.
We have also considered the Joint Proposal and its provisions addressing market power concerns, regulatory accounting and ratemaking matters, and various other concerns raised by Staff and other parties to the proceeding.
Further, as discussed above, we have evaluated the comments provided by OAG that pertain to the Joint Petition and the Joint Proposal.
All of this leads us to find that the proposed sale of the Indian Point nuclear assets is in the public interest and the transfer should be authorized pursuant to PSL §70.
State Environmental Quality Review Act Findings On May 3, 1996, the Commission issued a Final Generic Environmental Impact Statement (FGEIS) in Case 94-E-0952, the Competitive Opportunities Proceeding, that addressed the statewide environmental, social and economic impacts of a policy CASE 01-E-0040 opening New York's electric markets to competition.
The FGEIS acknowledged that localized impacts could arise as a result of specific proposals for the divestiture of generating facilities presented by public utility companies.
The approval of the sale and transfer of Con Edison's Indian Point 1, Indian Point 2 and related assets to Entergy constitutes a subsequent action to the Commission's policy determinations in Opinion No. 96-12 in Case 94-E-0952, and to the Commission's rate and restructuring decisions in Opinion No. 97-16.
Therefore, under the State Environmental Quality Review Act (SEQRA), the Commission must determine whether the impacts associated with the proposed sale and transfer are within the conditions and thresholds of the FGEIS.
The Commission issued a Final Supplemental Environmental Impact Statement (SEIS) on August 17, 2001 which analyzed the detailed site-specific. information provided in the draft SEIS submitted by Con Edison and Entergy as part of their PSL §70 filing.
It also analyzed other factual information and considered the public comments received concerning the draft SEIS.
The Final SEIS identifies and addresses the potential significant adverse impacts associated with Con Edison's divestiture of Indian Point 1 and Indian Point 2 and proposes mitigation to the maximum extent practicable.
Determinations were made in the Final SEIS as to whether the impacts identified are within the conditions and thresholds of the FGEIS.
Additionally, a comparison was made to the no action alternative to gauge the extent to which the impacts actually arose as a result of divestiture.
One impact already addressed in the FGEIS that could warrant additional mitigation concerns the effect of the sale on local property tax revenues.
The FSEIS identified additional mitigation for this impact that included encouragement for Entergy and the host community to negotiate a gradual change in the site's assessment and a voluntary mediation program to be facilitated by Staff.
When the localized impacts identified are balanced against the overall benefits to be derived from the sale, it is CASE 01-E-0040 clear that Con Edison's ratepayers, and the State as a whole, will be better off by the Commission approving this transaction.
The separation of generation facilities from electric transmission and distribution facilities should lead to a competitive marketplace and reduced rates.
Lower electric rates should in turn lead to economic growth and development in the State.
Given the likelihood that Entergy will improve the performance and reliability of* Indian Point 2, this transaction should contribute to the safe and continued operation of the plant and to system reliability.
These goals greatly outweigh any potential localized impacts resulting from the sale.
Accordingly, the Commission renders the findings contained in this section of its order regarding the environmental impacts associated with the sale of the Indian Point and related facilities.
Pursuant to 6 NYCRR 617.11, the Commission certifies that, consistent with environmental, social and economic considerations from among the reasonable alternatives available and with the mitigation measures set forth in the Final SEIS, the approval of the sale and transfer of Indian Point and related assets avoids or minimizes adverse impacts to the maximum extent practicable and satisfies the requirements of SEQRA.
The Commission's action is consistent with the applicable policies set forth in Article 42 of the Executive Law, as implemented by 19 NYCRR 600.5, and will achieve a balance between the protection of the environment and the need to accommodate social and economic considerations.
Federal and State Regulation Con Edison and Entergy interpret the Public Utility Holding Company Act (PUHCA) as requiring a finding that new ownership of a generating facility will benefit customers, is in the public interest, and does not violate state law, before Entergy can be afforded exempt wholesale generator (EWG) status for the Indian Point generating facilities.
Entergy seeks this status so it may operate the facilities free of federal regulation intended for monopoly utilities.
Entergy sees the requisite benefit for the public in its participation in the CASE 01-E-0040 wholesale competitive market, which should result in increased competition.
Therefore, Con Edison and Entergy request that findings be made that the Indian Point generating facilities be determined to be "eligible facilities" as that term is defined by PUHCA §32, thereby allowing FERC to issue a decision qualifying Entergy for EWG status under federal law.
In conformance with PUHCA and FERC's regulations,'3 the Commission finds that allowing the Indian Point facilities to become eligible facilities, with Entergy owning the plants (either directly or indirectly through one or more affiliates as defined under federal law)" will benefit New York consumers, is in the public interest, and does not violate New York law.
These findings are made on the same basis that we have found that the transaction is in the public interest pursuant to PSL §70.
The Commission determined in Opinion No. 96-12 that a competitive marketplace for the provision of electricity supply would benefit New York consumers and this transaction further that goal.
Moreover, there is no violation of New York law in transferring the plants to Entergy.
While Entergy will become an electric corporation under New York law when it assumes ownership of the Indian Point facilities, it is being accor~ed lightened regulation. IS This approach to regulation has been previously approved for generators that intend to participate entirely or primarily in the wholesale market. '6 Entergy, however, will still be subject to state regulation with respect to such matters such as enforcement, investigation, safety (subject to the NRC's 13 14 15 16 15 U.S.C.A. §79z-51; 18 C.F.R. §365.
15 U.S.C.A. §79b(a) (ii); 18 C.F.R. §365 (a) (1) (i)
Case 01-E-0113, Entergy Nuclear, Order Providing for Lightened Regulation of Nuclear Generating Facilities (issued August 31, 2001).
See, ~, Case 98-E-1670, Carr Street Generating Station, Order Providing for Lightened Regulation (issued April 23, 1999).
CASE 01-E-0040 jurisdiction over radiological matters), reliability and system improvements.
The Commission Orders:
- 1.
The terms and conditions of the Joint Proposal, dated August 8, 2001, are adopted and incorporated as part of this order.
- 2.
Consolidated Edison Company of New York, Inc. and Entergy Nuclear Indian Point 2, LLC are authorized, subject to the requirements of this order, to consummate the transactions set forth in the January 11, 2001 Joint Petition.
- 3.
The Asset Purchase and Sales Agreement, the Indian Point Continuing Site Agreement, the Guarantee Agreement, the Declaration of Easements Agreement, and the Site Ground Lease are approved, subject to the requirements of this order.
- 4.
The Purchase Power Agreement and the Capacity Purchase Transaction Agreement are approved, subject to the requirements of this order.
- 5.
No later than 90 days following the closing the sale and transfer of the nuclear assets, Consolidated Edison Company of New York, Inc. shall file with the Commission a
.statement of the amount of proceeds it received, the costs it incurred, and the company's proposed accounting and ratemaking treatment for the net proceeds, in conformance with the requirements of this order.
- 6.
The findings on exempt wholesale generator status under the Public Utility Holding Company Act described in the body of this order are made.
- 7.
The findings related to the Final Supplemental Environmental Impact Statement required under the State Environmental Quality Review Act described in the body of this order are made.
- 8.
Entergy Nuclear Indian Point 2, LLC shall cooperate with the parties participating in Case 00-E-0612 and provide them access to Indian Point facilities, records, and personnel as is necessary and proper for them to effectively participate in that proceeding.
CASE 01-E-0040
- 9.
This proceeding is cOLtinued.
(SIGNED) By the Commission, JANET HAND DEIXLER Secretary