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Legislative Memo

Darren Suarez
Director of Government Affairs
T 518.465.7511
www.bcnys.org

BILL:

A. 2710 (Paulin) / S.3917 Griffo

Support

SUBJECT:

Fuel Cell Subsidy

 

DATE:

February 23, 2016

 

The Business Council of New York State opposes legislation as it represents a significant potential liability for consumer of energy. This legislation amends the public service law to include micro-combined heat and power and fuel cell customer-generators to receive the same rate per kilowatt hour payment as renewable net metered technologies currently receive.

The Business Council supports efforts to develop and deploy more distributed generation and specifically micro-combined heat and power and fuel cell customer-generators. The Business Council supports many of the goals of the Public Service Commission proceeding 14-M-0101: Reforming the Energy Vision (REV) which will facilitate greater deployment of strategically located heat and power and fuel cell customer-generators.

The Business Council is strongly opposed to expanding the current net-metering law to include micro-combined heat and power and fuel cell customer-generators, because expanding net metering to include none intermittent forms of generation will significantly increase the retail rates for non-participating customers. Retail electricity rates include not only the wholesale cost of electricity but also the costs of taxes, planning, building, and maintaining the complex electrical grid.

When net metered customers receive the full retail price for generation electricity, they are not paying the utility for the use of the power lines, poles, meters and the complex technologies and services necessary to provide them with reliable, around-the-clock electricity. Our concern is that those costs are then shifted onto their neighbors that are not net-metering, thus raising monthly utility bills.

In December of this year the Public Service Commission released a comprehensive study focused on net metering, the study concluded that net metering may cost energy customers up to $60M annually. The study states that net-metering  “is an imprecise instrument with no differentiation in pricing for either higher or lower locational values or higher or lower value technology performance”  The report’s conclusions suggest that a more precise instrument then net metering like LMP+D (or location-based marginal price plus distribution value), should be adopted.

The same legislation was vetoed. Veto Message No. 535 echoes the concerns contained in this memo:

“The State is actively working to encourage distributed  generation, including  fuel  cells  and  micro-CHP. The Public Service Commission is undertaking a comprehensive review of the energy distributions and pricing systems in its Reforming the Energy Vision Proceeding to promote the use of renewable energy resources in order to benefit all energy consumers. The results of this Proceeding should be used to inform future net-metering projects and policy.”