Energy Committee Update
March 28, 2012
Staff Contact: Darren Suarez
- State Budget
- The Business Council Issues Comments on EJ Regulations
- NYPA Launches $30M Solar MAP
- Siting Board Issues Regulations for Public Comment
- RGGI Program Operations Review
Governor Andrew M. Cuomo, Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver on March 27, announced an agreement on the 2012-2013 New York State Budget.
All Funds spending will total approximately $132.6 billion, a decrease of $135 million from last year. This is the second consecutive year with a net reduction in All Funds spending, the first time this has happened in at least three decades.
State Funds will total approximately $88.8 billion in 2012-13. The Budget achieves flat state agency spending through the ongoing redesign of agency operations to reduce duplication, redundancy and waste.
Energy SuperHighway Initiative. The Budget includes $16.2 million to New York State Energy Research and Development Authority for research and development programs and the development of the 2013 State Energy Plan which is part of the Governor's Energy Highway Initiative. The initiative will develop an action plan for both short-term and long-term actions that will facilitate billions of dollars in private investment in Energy Highway projects. The Task Force recommendations will be a core component of the 2013 State Energy Plan.
Transportation/Environmental/Economic Development S.6258-D/A.9058-D
- Requires NYSERDA to record declarations of repaid loans under its on-bill financing programs (Part DD).
- Creates new Western New York Power Proceeds Allocation board (Part GG) to direct proceeds from sale of unallocated expansion and replacement power. This legislation will clarify and codify the process by which expansion and replacement power allocations are made, and also make clear that the Western New York Power Proceeds Allocation Board shall play a key role in the award of monetary allocation derived from the sale of Expansion and Replacement power into the open market.
Legislative Proposals that are Not in the Budget
- Senate Brownfield Eligibility for Repowered Electric Generation Facilities. This provision contains specific benchmarks to meet the definition of repower an electric generation facility. The provision of this section would be applicable to facilities located in the county of Nassau, Suffolk, or the Rockaway Peninsula.
- Two year extension for motor fuels tax, petroleum business tax, fuel use tax and state and local sales tax exemptions for the purchase of E85 and purchasing alternative fuels (Part D). The Executive and the Senate recommended five years.
- Limits the availability of the bio-fuel production tax credit to tax years beginning before 2020 (Part K).
- Modifies the MTA payroll tax for employees hired through professional employer organizations (Part N).
Legislative Proposals that are Not in the Budget
- Senate (Part H ) Solar Energy Systems. This provision would amend the solar sales tax credit. The legislation would provide a refundable credit for a qualified solar and energy storage manufacturing facility. The section would provide a 20% credit for research and development and manufacturing property, and a 10% credit from qualified research and manufacturing expenses.
- Senate (Part U) 18-a Utility Taxes.This provision would reduce the 18-a Utility taxes one year early. Specifically, this part would sunset the 2% tax of gross intrastate revenues, and a 1% of gross intrastate revenues for Long Island Power Authority one year early and would replace the utility tax with a tax of one third of one percent.
The Business Council opposed a $200 million transfer from NYSERDA. The State Assembly proposed budget included tranferring $200 million from the New York State Energy Research and Development Authority and place it into the state’s General Fund. Several statewide organizations including The Business Council sent Governor Cuomo a letter objecting to the move. Click here to read the letter.
Environmental Justice Issues in Siting of Major Electric Generating Facilities Pursuant to Public Service Law Article 10.
Chapter 388 of the Laws of 2011, Article 10 (Article 10) of the Public Service Law, requires the undertaking of analysis of environmental justice (EJ) issues associated with the siting of power plants. Article 10 the Department's regulations establish how an applicant must undertake its EJ analysis, (i) an evaluation of significant and adverse disproportionate environmental impacts of the proposed facility, if any, resulting from its construction or operation, including (ii) a cumulative impact analysis of air quality, and (iii) a comprehensive demographic, economic and physical description of the community within which the facility will be located, compared and contrasted to the county and adjacent communities.
The Business Council advocated that to the maximum extent practicable that Part 487 should be patterned after existing State Environmental Quality Review Act (SEQR) regulations. The Business Council commended the Department of Environmental Conservation (Department), for the utilization of key definitions that are significant with SEQR definitions as set forth in 6NYCRR Part 617.
The New York Power Authority (NYPA) is launching a new $30 million initiative to fund research, training, and demonstration projects in solar power. As part of the Governor’s NY-Sun initiative, NYPA has developed the Solar Market Acceleration Program (Solar MAP).
The NY-Sun Solar-MAP will provide competitive funding over five years. NYPA will coordinate with the New York Energy Research and Development Authority and other industry stakeholders to develop program priorities and share results and expertise.
With a total budget of up to $30 million over a five-year period, Solar MAP will be closely coordinated with NYSERDA’s solar research programs and other state agency stakeholders. The program will provide, through competitive solicitations, activities in three main areas:
- research for innovative solar technology;
- demonstration projects; and
- soft-cost reduction strategies.
The New York State Board on Electric Generation Siting and the Environment (Siting Board) on Friday March 23, 2012 issued for public comment proposed regulations to implement provisions of Article 10 of the Public Service Law.
The draft regulations are designed to, among other things: accommodate state and local permitting requirements in a streamlined regulatory process; provide for a pre-application consultation process with established deadlines for procedures, as well as provide for active public involvement in the siting process.
On March 20th, RGGI, Inc. convened a meeting of the RGGI Stakeholders to solicit stakeholder input on IPM electricity sector proposed policy scenarios for modeling, information on use and development of REMI macroeconomic modeling to support program review, and provide information on program operations review for stakeholder comment.
The analysis provided information for the overall program review process. It was stated that the scenario specifications do not reflect a preference for or selection of any specific policy. For the exercise, the RGGI states defined potential scenarios using combinations of three components: emissions caps, cost containment reserve (CCR), including price collar and tons in reserve, and private allowance bank.
Potential scenarios were also tested against alternative electric demand growth and offset availability assumptions.
The three CO2 cap trajectories assume the existing cap in 2013 of roughly 165 MMTons, followed by a reduction in the cap in 2014 to one of three levels: 120 MMTons, 115 MMTons, and 106 MMTons. The RGGI allowance price projections are predicted as follows at 106 Cap: $5.00-$7.25/ton, 115 Cap: $3.25-$4.50/ton, and at 120 Cap: $2.00-$2.75/ton.
The Business Council is developing comments on the modeling, the potential scenarios and the assumption.