State Energy Plan
On Tuesday January 7th, the New York State Energy Planning Board issued its Draft 2014 New York State Energy Plan. The Plan which is a soupcon late as enumerated in the statutory requirements of Article 6 of the Energy Law, contains two volumes. The first volume provides fifteen key initiatives to advance the State’s energy future. The second volume addresses energy use, its sources and impacts, and provides detailed background that was used to develop the overarching vision and initiatives in the first volume. In addition, the second volume provides forecasts for energy supply and demand, a statewide inventory of greenhouse gas emissions, environmental and public health impacts associated with energy production and use, and vulnerabilities of the energy system.
The 2013 State Energy Plan envisions a flexible and clean energy system that empowers residential customers, businesses, and communities to receive the reliability and affordability they value initiatives to achieve vision focus on five areas:
- Improving energy affordability
- Unleashing the power of private sector energy financing
- Providing a more resilient and flexible power grid
- Giving customers more control over their energy use
- Aligning energy innovation with market demand
In comparison the 2009 Final Plan’s strategies and recommendations included the following 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 State’s 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 State’s economic competitiveness;
- Reduce health and environmental risks associated with the production and use of energy across all sectors; and
- Improve the State’s energy independence and fuel diversity by developing in-state energy supply resources.
All fifteen of the key initiatives can be viewed below. The State Energy Plan initiatives are structured in a manner to empower customer choice, energy market innovation, or regulate investments. Specifically, the initiatives advance energy efficiency programs for the next six years, encourage a new business models for utilities, boost greater development of distributed generation, alter the state building code, establish a green bank, supports the development of microgrids, back transmission and distribution system upgrades, facilitate a transition away from oil for the transportation and heating sectors, and encourage economic advancement.
The Plan also includes a number of metrics to determine if the Plan’s objectives have been achieved. The metrics can be viewed below.
Some press accounts have identified that the State Energy Plan “doesn't include expanding in-state gas production through hydraulic fracturing in the Marcellus Shale.” Specifically, the paragraph contained in the 2009 State Energy Plan was the following:
Natural Gas Supply. Approximately 95 percent of New York‘s natural gas supply comes from the Gulf Coast region, Western Canada, Northeastern Canada, and the Appalachians. The distances from these sources result in the addition of pipeline transportation and distribution costs to the price of the commodity. New sources of potential natural gas supply for the State include the Marcellus Shale formation in West Virginia, Ohio, Pennsylvania, and the Southern Tier of New York.
The State should promote environmentally responsible development of these natural gas resources to large scale production, which would generate economic benefits, including increasing the stable supplies of indigenous fuel, lowering gas transportation costs for consumers, generating new State and local tax revenues, and increased revenues for landowners from land use agreements with natural gas companies. (2009 State Energy Plan (highlight added))
Public hearings on the Draft Plan will be held in Buffalo, Syracuse, Albany, Manhattan, Brooklyn and Long Island. For more information on dates and times for the hearings, and to view the full Draft Energy Plan, please visit energyplan.ny.gov. Public comments can be submitted in writing or electronically at energyplan.ny.gov.
The Business Council will prepare public comments to be shared at the public hearings, and a written document. Members of the Business Council Energy Committee are invited to help the Business Council develop its public comments on the Draft New York State Energy Plan. A meeting of the Energy Committee will occur on January 29th at 9:30 am. The agenda will include a discussion of the Business Council’s response to the Draft Plan.
Realign energy efficiency policies to work with and through markets in order to accelerate the pace of energy efficiency deployment while fostering continued economic growth in New York State.
DPS, NYSERDA, and other agencies to create a portfolio of energy efficiency programs with a State commitment through 2020 that achieves high customer value for public investment, reduces customer confusion, streamlines application and delivery processes, promotes broad and deep uptake of efficiency measures across all fuels, and strategically addresses market barriers and gaps to maximize deployment. The State’s approach to energy efficiency will operate in accordance with the following guiding principles:
- Develop and provide rate and economic incentives to encourage utility investments in energy efficiency that will reduce the amount of capital required to maintain the grid and will improve overall system efficiency.
- Focus State resources on energy efficiency projects that may be economic but face addressable barriers to increasing market penetration, with the goal of animating markets. The role of ratepayer funds will be to accelerate these investments through the combination of grants and financial products.
- Facilitate greater access and support for energy efficiency opportunities in low-income and underserved communities to provide those who are most vulnerable to increasing energy prices and least able to invest in clean energy with access and means to reduce their energy costs.
Enable and facilitate new energy business models for utilities, energy service companies, and customers to be compensated for activities that contribute to grid efficiency. Maximize the cost effective utilization of all behind-the-meter resources that can reduce the need for new infrastructure through expanded demand management, energy efficiency, clean distributed generation, and storage.
- DPS to consider the potential for distribution utilities to coordinate and/or aggregate customer-based demand control options, and receive a rate of return on utility capital invested in customer side efficiency improvements and distributed generation.
- DPS to pursue actions that will ensure alignment among federally regulated wholesale markets, State policy and regulatory objectives, and retail markets.
- DPS and appropriate energy agencies to determine the total system and life cycle value of resource diversity, including the support of load control, renewables, and storage.
- DPS to review demand-side management programs and recommend changes to increase the dispatch of reliable and clean demand-side resources as a primary tool to reduce system peaks and optimize load curves.
- NYPA to implement strategies to increase the portion of electricity demand of public entities participating in demand-side management programs that is subject to such programs.
- DPS to implement strategies to spur energy service companies to develop programs that will increase the participation of large customers in load control and dynamic pricing activities.
- DEC to establish regulatory standards to foster increased use of cleaner distributed resources while maintaining air quality and supporting reliability needs.
Establish and implement building codes and standards that will help support energy efficiency and clean energy.
- NYSERDA and DOS to provide training and financial support to local communities to help with code enforcement.
- DOS to adopt incrementally more progressive codes for all buildings that move toward net-zero energy consumption and encourage healthy indoor environments, as well as on-site renewable generation.
- NYSERDA and NYPA to assist eligible entities in their programs to implement enhanced codes and policies that promote high energy performance in their buildings.
Establish a $1 billion New York Green Bank to unlock and mobilize private sector capital for greater investment in New York’s clean energy economy. The Green Bank will work to eliminate current market barriers and fill financing gaps by partnering with private sector intermediaries through the use of various forms of financial support such as credit enhancement, warehousing, and securitization, making a much larger supply of private capital available to finance clean energy projects.
The Green Bank will operate in accordance with the following guiding principles:
- Provide a bridge to a sustainable and efficient private sector clean energy financing market.
- Address market barriers and inefficiencies that are impeding the growth of clean energy financing, and partner with private sector entities to fill financing market gaps.
- Partner alongside, rather than compete with, financial institutions and other private sector entities, leveraging both private sector capital and these entities’ institutional capabilities.
- Focus on projects that are economically viable but not currently financeable.
- Work with existing financial intermediaries that are making progress in the market, but whose progress is limited by lack of available financing.
- Facilitate the development of clean energy capital markets (with a particular focus on bond markets).
- Enhance market confidence in clean energy investing by compiling and publishing loan payment and project performance data on all Green Bank-financed clean energy transactions.
- Maintain the administrative flexibility needed to adapt to movements in the markets, and to focus on a constantly evolving frontier where the Bank’s credit enhancement can unlock new sectors of the clean energy finance market.
Coordinate renewable energy policies to strategically harness the many resources that the State can provide to solar, wind (offshore and land-based), bioenergy, geothermal, hydrokinetic, storage, and other power supply options. Implemented strategies should take into account the opportunities provided by the diverse renewable resources available in different regions of the State.
DPS, NYSERDA, and other agencies to create a portfolio of renewable energy programs with a State commitment through 2025 to help achieve scale and drive down the cost of implementation. The State’s approach to renewable energy will operate in accordance with the following guiding principles:
- Provide greater incentive-level predictability and increased project revenue certainty through the State’s various renewable energy programs and policies.
- Dedicate State resources to reducing the costs associated with development, such as permitting, licensing, stand-by charges, regulatory compliance, and customer acquisition expenses.
- Conduct predevelopment work to accelerate and aggregate economic opportunities for emerging technologies and nascent markets.
- Coordinate with other states to increase the scale of clean energy projects.
- Develop renewable resources that support community-based energy needs.
- Establish incentives that reward installation of new renewable power sources where they can increase system efficiency, improve portfolio diversity, and contribute to the State’s environmental goals.
Update and modernize electricity and gas delivery systems to replace aging infrastructure and ensure service quality and reliability with a more integrated and distributed energy network.
- DPS to work with utilities to foster smart grid development and reap its attendant benefits, such as interoperability, coordinated distributed operations, and real time data management.
- DPS and NYSERDA to develop specific incentives for grid-based and behind-the-meter storage technologies.
- DPS to consider allowing electric utilities to own and operate small scale distributed resources. In addition, DPS to address current obstacles to microgrid development to meet customer needs, State requirements, and system planning objectives by revisiting stand-by electric rates, interconnection guidance, maximum plant size, and other issues.
- NYPA to evaluate supporting microgrids in strategic locations with its customers, especially in community rebuilding zones.
- NYPA and LIPA to support public-private partnerships that further transmission system investments.
Support community-based energy planning and facilitate public-private partnerships to develop smart, integrated energy networks to spur regional economic development.
- DPS to refine policies pertaining to microgrids, and NYSERDA and NYPA to develop programs, and authority if needed, to encourage new financing and ownership models to facilitate community grid projects.
- NYSERDA to develop community aggregation models to address soft costs and achieve scale in energy efficiency and renewable solutions.
- NYSERDA to provide assistance to communities and regions to integrate and cross-reference their land use, smart growth, and transportation capital projects, with the ultimate goal of achieving consistent outcomes.
- The State to consider legislation allowing wastewater treatment plants to net-meter electricity produced from biogas to encourage full use of the available waste stream.
- DOS to support the development of smart growth plans that incorporate the principles contained in the New York State Smart Growth Public Infrastructure Policy Act of 2010. When feasible, DOS to provide investment incentives for projects that conform to regional sustainability plans through prioritization in State funding opportunities, as well as tax credits supporting transit-oriented development and local designated priority growth centers.
- DPS, NYSERDA, and ESD to develop specific programs that enhance New York’s reputation as a commercial center with the ability to offer clean, reliable, cost-effective, and high quality energy services to energy-intensive technology-based businesses.
Accelerate securing of critical infrastructure to ensure the safety, security, and reliability of an increasingly complex and interconnected energy system, including transportation, liquid fuels, electricity, and natural gas infrastructure.
- NYSERDA to strengthen liquid fuels distribution systems and explore opportunities to relocate key fuel-related infrastructure to higher elevations by working with appropriate local, State, and federal authorities, and private fuel supply companies.
- DPS and DHSES to coordinate with the State’s Cyber Security Advisory Board and top information technology officials from the regulated utilities to address issues affecting critical energy systems in the State. Such issues to include cross-industry sharing of data and best practices, identifying existing and evolving vulnerabilities in the energy system, deploying of state-of-the-art cyber-defense technologies, and ensuring appropriate regulatory oversight.
- DHSES, DOS, and DEC to update flood maps for the major waterways within the State in order to give utilities and emergency preparedness groups a common platform from which to design mitigation and response plans.
Reduce reliance on petroleum products for heating buildings by supporting the use of clean alternatives to heating oil and expanding access to natural gas in the near term while pursuing strategies to reduce natural gas leakage.
- DPS to encourage and support oil-to-gas conversions by collaborating with other State agencies and regulated gas utilities to accelerate investments in natural gas distribution.
- DPS to reduce emissions from natural gas infrastructure by requiring gas utilities to identify and repair leaks of significant magnitude.
- DEC to evaluate regulations to limit methane emissions from natural gas compressor stations on intrastate pipelines.
- NYSERDA to support economic and efficient clean heat options as alternatives to fossil fuel consumption, including solar thermal, geothermal, and the use of sustainably harvested biomass and advanced heating systems.
- DEC, DOH, and NYSERDA to support research to enable the quantification of public health benefits to be incorporated into energy planning and policies.
Give customers more choice and control of their energy usage to determine what services they value by cultivating a more competitive market around home energy solutions.
- DPS to make the regulatory changes needed to enable a competitive marketplace for business and home energy solutions centered on customer needs and values.
Provide improved information and access to energy-related data to support customers’ ability to make educated decisions about clean and efficient energy investments, including labeling mechanisms for commercial and residential buildings.
- DPS to develop programs that result in utility bill design improvements; DPS will also act to increase availability of retail price information to facilitate customer comparison of utility and competitive provider services.
- NYSERDA and DOS to work with government entities to facilitate disclosure of building energy performance to potential renters and purchasers, benchmarking of energy usage by owners of commercial buildings over a certain minimum size and capture energy efficiency considerations in home and commercial property valuations.
- NYSERDA and DEC to evaluate implementing a labeling mechanism for industrial, commercial, and residential buildings based on the buildings’ energy usage and possibly, their greenhouse gas emissions, allowing customers to easily compare choices.
- DPS to evaluate methods to provide aggregated consumption data to service providers to encourage demand response and energy efficiency penetration.
Increase transportation alternatives and vehicle diversity to harness the benefits of decreased dependence on oil and a cleaner, more connected, and more flexible transportation sector.
- OGS working with DOT through the NY Clean Fleets Initiative to encourage New York State agencies and authorities to incorporate efficient and alternative fuel vehicles into their fleets by pooling agency funds together to increase purchasing power.
- NYSERDA and NYPA to stimulate market demand for electric vehicles through consumer education, collaboration between private and public sectors, continued support for charging infrastructure, and innovative demonstrations.
- DPS to evaluate utility rate designs that encourage electric vehicle charging at times that are optimal and economic for customers and the grid.
- DOS to establish consistent building codes and standards for installing electric vehicle charging infrastructure.
- DOT, NYSTA, and OGS to reduce the cost and increase the convenience of alternative fuel vehicles by providing incentives such as high occupancy vehicle lane access, and reduced tolls at bridges and tunnels, and on the New York Thruway.
- DOT, NYSERDA, and DEC to explore and evaluate innovative financial strategies that will capture the value from increased local economic activity as a result of reduced consumer spending on petroleum fuels.
- Department of Agriculture and Markets, NYSERDA, and DEC to support in-state, sustainable fuel production including agriculture and organic waste feedstocks, especially as a substitute for petroleum fuels.
- NYSERDA to assess and develop potential deployment strategies and infrastructure requirements for the commercialization of hydrogen fuel cell vehicles.
- DOT to support infrastructure improvements that encourage increased use of bicycles and pedestrian, transit, and intercity passenger rail modes.
Bring innovative information technology to transportation system users to support more efficient and safe travel.
- DOT to refine and improve 511NY, a free comprehensive traveler information system and mobile app that provides users with information related to a variety of transportation choices and conditions, including mass transit and rideshare options, and incident information.
- DOT to expand the availability and use of real-time data on travel and weather conditions to help travelers avoid traffic congestion and maximize use of mass transit options.
Encourage clean technology innovation and commercialization to maximize the economic impacts of a vibrant private sector in New York.
- NYSERDA to spur private investment in clean energy research and development by strategically mitigating risks through the support of proof-of-concept centers that partner the private sector with academic institutions. In addition, NYSERDA to leverage the research capabilities of New York’s institutions of higher education to fulfill industry’s research needs. NYSERDA to also create licensing policies that recognize the sustained importance of startup companies.
- NYSERDA to increase its emphasis on cleantech and cleanweb startups by supporting business incubators, mentorship programs for entrepreneurs, and innovative events such as hackathons and prize competitions.
- ESD to provide work and office space for clean energy companies to develop new technologies in tax free zones through START-UP NY.
- NYSERDA to accelerate the use of new, clean energy technologies through high profile demonstration projects, broad communication of project performance, and support for their transition to mainstream markets.
- NYSERDA to foster economic development opportunities for clean energy companies in New York by identifying regional strengths, existing clean energy clusters, basic supply chains, market positions, and growth potential.
- NYSERDA and NYPA to identify areas where the State can play a bigger role as a purchaser of goods and services and in partnering with private sector companies to co-install locally developed clean technologies.
- NYSERDA to assist New York’s clean energy companies in identifying State, national, and foreign customer demand and coordinate with ESD to expand international trade activities and leverage ESD's local and foreign office initiatives with World Trade Center Trade Center and United States Department of Commerce programs.
Foster a clean energy workforce targeting participants across all aspects of the energy sector.
- NYSERDA and SED to consult the clean energy industry members and the State’s Regional Economic Development Councils to define regional workforce needs that can help shape curricula (including short courses and worker retraining), particularly at the State University of New York, City University of New York, community colleges, and technical institutes.
- SED to expand Science, Technology, Engineering and Math (STEM) training at all levels of primary and secondary education to increase the number of students pursuing clean energy careers.
Improving Energy Affordability
- Keep New York residential customer electric bills as a percentage of household income at or below the national average (% of median household income)
- Reduce the percentage of household income devoted to energy bills for low-income New Yorkers (% of low to moderate household income)
- Improve competitiveness of industrial customer electric rates—maintain below national average
- Decrease number of customers relying on oil or propane for heat
- Increase energy efficiency resource deployment (MW, MWh, DTH, $/resource)
- Decrease electric system peak demand (MW)
- Improve utilization of existing electric infrastructure—increase load factor (average load compared to peak load) (MW capacity and the total GWh energy requirement [i.e. “sendout”])
Unleashing the Power of Private Sector Energy Financing
- Increase renewable energy deployment (MW, MWh, $/resource)
- Increase cost effective distributed energy deployment (MW, MWh, $/resource)
- Increase leverage ratio of private capital to public investment ($ private investment/$ public investment)
- Increase New York energy dollars retained in the State
- Decrease energy use per unit of gross state product (MWh/GSP)
- Increase clean energy business activity, such as number of new start-ups
- Increase net job impacts of energy initiatives and clean energy program portfolios
Providing a More Resilient and Flexible Grid
- Improve the electric system’s ability to withstand extreme weather events
- Increase the number of customers and communities supported through distributed resources that can be isolated from the electric grid during emergency events
- Decrease outage recovery duration following major events
- Increase power quality for system sensitive customers
- Increase load control penetration by customer sector (MW, MWh in a year)
- Reduce the duration and frequency of outages during storm events
Reducing Environmental Impacts Associated with Our Energy System
- Decrease greenhouse gas emissions in New York
- Reduce the carbon intensity of our energy system (MWh/CO2)
- Reduce reliance on petroleum in all sectors (BTu consumed)
- Reduce health and economic impacts associated with air pollution from fossil fuel use in the energy sector
- Increase number of alternative fueled vehicles registered in New York to 1 million vehicles by 2025
- Increase number of alternative fueling and charging stations
- Increase fuel diversity of electricity and transportation systems
- Increase the average fuel economy of passenger motor vehicles registered in New York