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Legislative Memo

Darren Suarez
Director of Government Affairs
T 518.694.4461
www.bcnys.org

BILL:

S.7508-B (Budget) Part SS

Support

SUBJECT:

Increasing Farm Waste Management Net-Metering

 

DATE:

March 22, 2018

 

The Business Council of New York State opposes increasing New York’s net-metering compensation. While net metering has facilitated the deployment of renewable resources in New York, there is a significant cost to the program. While there may be some variation, net metered resources are generally reimbursed for their electricity at the full retail rate. For energy consumer, this means they pay a premium for electricity from a net metered resource.  If this legislation was enacted it could cost $144M annually.

After evaluating the costs and the benefits of net-metering, New York has determined that it is in the best interest of the consumer, the electric grid and the environment to transition away from net-metering resources. Last year, the NY Public Service Commission issued an order establishing the transitional steps from traditional net metering into a Value of Distributed Energy Resource (VDER) tariff that values and compensates distributed energy resources. Distributed energy projects after interconnected after March 9, 2017 have transitioned into a VDER tariff. All projects interconnected prior to March 9, 2017 will retain their previous compensation through net energy metering. The Business Council may have specific technical concerns with VDER but we cannot quibble with the intent of VDER. 

This legislation would provide one form of renewable generation with unjust compensation. While the Business Council is sympathetic to owners/operators of anaerobic digesters who are struggling to operate their digesters, we oppose a solution which increases the cost of these facilities on other electric customers. All energy consumers have been subsidizing the cost of anaerobic digesters through current net meter practices, plus public service commission imposed energy assessments.

The American Biogas Council has projected that in New York anaerobic digesters could produce 1.2 billion kWh annually; if the owners/operators received 12 cents a kWh this proposal could cost $144M annually. The many New York energy consumers should not be required to provide unjust compensation to the few operators of anaerobic digesters.

The Business Council, like the sponsors of this legislation, is concerned about the plight of dairy operations in New York State. While in 2016 in New York there were 4,624 dairy farmers, New York has less than 220 digesters and only twenty-one are on dairy farms. This means less than .5% of dairy farms have a digester. 

In conclusion, the net-metering experiment has reached its conclusion. The Business Council strongly supports tariffs that value and compensate distributed energy resource in a just and equitable manner. If the current owners/operators believe they are not receiving just compensation they should seek it out through the regulatory process but they should not place costly demands on other New York businesses.