Regulatory and Political Framework of Today’s Renewable Energy Projects

Geraldine Gauthier, Associate Counsel

February 8, 2013

• Created by Public Service Law § 5 in 1910• 5 bipartisan Commissioners appointed by the

Governor and confirmed by the Senate to serve 6-year terms.

• Jurisdiction over electricity, gas, steam, telecommunications & water utilities

• Staff arm is the Department of Public Service

• Funded by assessment on the utilities it regulates.

• Adjudicatory body; rate cases• Charged with encouraging public benefit,

preservation of the environment and conservation of natural resources

1998 Wholesale Electricity Market Restructuring• Competitive Market Structure

Lowers prices Expands consumer choice Increases rate of technological advancement

1998 Wholesale Electricity Market Restructuring

• Break up monopoly utilities• Divested utilities of generation capacity• Retained ownership of transmission and

distribution• Became “T&D Utilities”

System Benefit Charge (SBC)

• Public benefit programs previously provided by monopoly utilities

• Billed monthly to NY customers based on use

• PSC “Typical Bill” for 500 kWh $0.80 - $1.68/mo.

System Benefit Charge (SBC)

• 1998 – 2005: $150 million/yr

• 2006 – 2011: $180 million/ yr

• 2012 – 2016: $ 99 million/ yr

System Benefit Charge (SBC)

Total collected through 2016:

$2.7 Billion

• Created in 1975

• Former NY Atomic & Space Development Authority

Commercial/Industrial34%

R&D20%

Residential17%

Low Income17%

General Awareness Campaign2%

Administration(?)11%SBC Funds

• Established by Gov. Pataki Exec. Order 2

• Reports in 2002, 2009 and 2013

20

FUEL MIX BASED ON ENERGY PRODUCED FOR THE NEW YORK ELECTRICITY SYSTEM In % of Total

Generation Fuel Used 2000

Natural Gas 25.0%

Oil 9.8%

Coal 15.7%

Nuclear 20.1%

Hydropower 15.5%

Other 2.0%

Net Imports 11.9%

TOTAL 100.0%

15% by 2020

Renewable Portfolio Standard (RPS)

• 2003 PSC Proceedings

• 19.3% of NY retail electricity consumption from renewables

Renewable Portfolio Standard (RPS)

25% by 2013

Renewable Portfolio Standard (RPS)

• Per kwh assessment on delivery charges

Renewable Portfolio Standard (RPS)25% by 2013

• Voluntary Market: 1%• Main Tier 23%• Customer Sited Tier 1%• 25%

• 200 Acres

• 32 Megawatts

Renewable Portfolio Standard (RPS)

• Estimated 12 million megawatt hours of renewable generation added by 2013

• Cost: $582 to $762 million or • $179 to $323 million

Renewable Portfolio Standard (RPS)2010 Adjustment

• PSC extended program through 2015• Increased renewables goal to 30% by 2015• Reduced 12 Million megawatts to 10.4

million megawatts

Renewable Portfolio Standard (RPS)2010 Adjustment

• Reason: Energy Efficiency Program Standard (EEPS)

• When EEPS programs decreased NY overall consumption, the RPS goal expressed as a percentage of energy consumed became a correspondingly smaller number

Renewable Portfolio Standard (RPS)

2011 Status

$2.998 billion

• $582 to $762 million or $179 to $323 million

2011 Progress toward goal

• 47%

• Incentives in downstate zones• Larger on-site wind and PV systems• Monthly incentives budget increased from

$2 million to $3.5 million • Net-metered projects permitted

Energy Efficiency Portfolio Standard (EEPS)

• 2008 PSC Proceedings• Consumption reduction target:

• 15% by 2015

Energy Efficiency Portfolio Standard (EEPS)

• Administered by utilities and funded by an additional SBC assessment

• July 2011 PSC reported consumption reduction of 1 million megawatt hours -- or

Energy Efficiency Portfolio Standard (EEPS)

• 49% of goal

Recent Legislation

• Federal: Extension of Wind Power Subsidies in “Fiscal Cliff” deal

• New York Power Act of 2011• NY Tax Credit legislation

August 2011

• $107 Million (total) for PV projects > 50 kWh• Available through 2013• Not a new program; CST of RPS

“We want to extend the New York’s sun solar jobs program at $150 million annually for 10 years to increase solar panel installations for home and business. It’s good for the environment and it’s good for the economy. ”

p

PART 2 – SUNY

• Online: April 17, 2012• Capacity: 750 kW (747.3)

100

100 kW Solar carport with charging stations

• New York Energy Law § 9-101(4)• “Energy Performance Contract”• “Agreement for provision of energy

services. . . in which a person agrees to install, maintain or manage energy systems or equipment to . . . produce energy [for] a building or facility in exchange for a portion of the energy savings or revenues.”

• New York Energy Law § 9-103(6)• Procurement• “In lieu of any other competitive

procurement that may apply. . . an agency may procure an energy performance contractor by issuing and advertising a written RFP in accordance with [agency’s guidelines].

PLEASE DON’T DO IT ALONE!!

•7550 Acquisition and Disposal of Real Property Interests•7554 Construction Contracting•7561 Contract Award Protest Procedure•7557 MWBE•7553 Purchasing and Contracting•Energy Law•State Finance Law•Executive Law•Education Law

•Oswego: 12 kW wind turbine; 36 & 43 kW PV•Cobleskill: 75 kW PV•Buff State: 50 kW PV•Delhi: 5 kW wind turbine; 22 kW PV•UAlbany: 49 kW PV

•UB: 750 kW PV•Canton: 1.8 mW wind turbine

ing

•Significantly contribute to State Goal of 10.4 Megawatts of Renewable Energy Generation by 2015

2008-09 2009-10 2010-11 V

Value %%

Produced 199,500 572,286 2,323,376 2,123,876 1,064.6%

Utilized 320,298,013 348,715,884 342,506,612 22,208,599 6.9%

From the “Report Card”SUNY Renewable Energy Production/Utilization (kWh) Change from 2008-09

•Contribute to Development of GREEN JOBS