May 2, 2016
In December 2015, Governor Cuomo directed NY’s Public Service Commission (“Commission”) to create a Clean Energy Standard (CES) requiring New York State to source 50 percent of its electric energy from renewables by 2030. The Governor suggested that the Clean Energy Standard also be used to support New York’s upstate nuclear plants.
In January 2016, the Commission opened a proceeding to develop the CES and the Commission released a “White Paper” outlining how the CES might work. The Commission stated that a final proposal is to be considered in June with a final planned for July. In May, the Commission is planning to hold several public statement hearings across New York to hear input from the public on the CES. Written public comments on the CES can also be submitted to the Commission. ( Written comments to the Commission should be emailed to secretary@dps.ny.gov and should reference CASE 15-E-0302. The deadline for written comments was recently extended from March 14, 2016 to two weeks after release of the CES cost impact study, which has yet to be released as of 3/16/16.)
Strong public support for the scaling up of renewable energy was demonstrated at the New York State Energy Plan and Reforming the Energy Vision (REV) hearings and in massive public comments. Public support is needed now to ensure the Clean Energy Standard will be strengthened and to ensure that Governor Cuomo and the New York Public Service Commission issue a final CES that positions New York as a national climate and renewable energy leader.
1. The Clean Energy Standard Must Be Enforceable. The CES must be designed and structured to ensure that New York actually achieves the target to source 50 percent of our electric energy from renewables by 2030. The Commission should require aggressive annual renewable electricity targets for each year 2017 – 2030. The annual targets should not be “backloaded” which will mean delaying faster renewable energy growth to the later years of the program, thereby reducing the early and overall benefits of the CES. The CES should be enforced through “Alternative Compliance Payments” (ACPs), where electricity suppliers would pay if they failed to purchase enough renewable energy to achieve their yearly target. ACP funds should be directed to the New York State Energy Research and Development Authority (NYSERDA) to procure more renewable energy or to reduce the costs of renewable development, to ensure that the 50 percent target will be met. Further, the ACP amount should be set at a level high enough to encourage the utilities to purchase renewable energy rather than pay the ACPs.
2. The Clean Energy Standard Should Include Offshore Wind. An offshore wind tier would require electricity suppliers to purchase a guaranteed amount of offshore wind each year. This would provide the long-term market certainty needed to bring the offshore wind to scale in New York. Including offshore wind with all new large scale renewable energy resources into one tier could slow the development of offshore wind, which currently is a less mature technology, but is poised for rapid growth. As a new maturing technology with unique characteristics, like its proximity to major load zones, a separate tier ensures that a vibrant offshore wind program will be developed in New York. Offshore wind has a critical role to play in New York’s clean energy future and will be necessary for the state to meet the 50 percent renewable energy target. In fact, NYSERDA has projected that offshore wind could meet 13 percent of New York’s total energy demand by 2030. Offshore wind would reduce the need to build new climate disrupting peaking fossil-fuel plants, thereby reducing harmful emissions and significantly improving the health of New Yorkers.
By creating an offshore wind tier, Governor Cuomo and the Commission can help New York harness the enormous potential for offshore wind to meet the State’s energy needs and the State Energy Plan goals, create tens of thousands of jobs, establish New York as a regional hub for the industry, create millions of dollars in economic investments, stabilize energy costs and foster locational diversity for renewable development. NYPA, LIPA, New York City and the New York Green Bank should take action to promote offshore wind development to complement the OSW tier and further reduce the costs of offshore wind resources.
3. Enforceable Energy Efficiency Utility Targets Should Be Part of the CES. In addition to establishing an enforceable yearly utility target for renewable energy, Governor Cuomo and the Commission should also establish an enforceable yearly energy efficiency target for utilities. The state should mandate at least 2 percent annual energy savings are achieved. Neighboring states have surpassed this amount of annual energy savings, significantly reducing customer bills. While energy efficiency is a critical component to the State’s State Energy Plan and REV-related goals, the Commission has not yet taken action to guarantee that needed efficiency resources will be developed. In accordance with the support of a broad range of stakeholders, the Commission should seize upon all of its opportunities to do so. An enforceable energy efficiency target will help ensure the state achieves the larger target of securing 50 percent of our electricity from renewables while saving customers money.
4. Governor Cuomo and the Commission Should Ensure that LIPA and NYPA Contribute to Achieving the Clean Energy Standard’s Target. The Clean Energy Standard should apply to all utilities and power authorities including the Long Island Power Authority (LIPA) and the New York Power Authority (NYPA), as well as other electricity suppliers. Each should have to purchase a percentage of their electricity from new renewable sources, at a level that increases each year. Together, LIPA and NYPA supply more than 20 percent of all the electricity used in New York State. Therefore achievement of the 50 percent by 2030 target will require significant contributions from NYPA and LIPA. The Commission should facilitate a parallel LIPA and NYPA implementation plan development track that will convene these agencies to facilitate their participation in the Clean Energy Standard. Governor Cuomo should direct LIPA and NYPA to adopt compliance mechanisms to ensure that they meet or exceed the Clean Energy Standard.
5. The Clean Energy Standard Should Use Long-term Contracts. Renewable energy companies need long-term contracts to get projects built and financed at the lowest cost possible. These long-term contracts reduce costs for consumers, and ensure that prices will be stable, protecting them against price volatility and natural gas price increases over time. These long-term “bundled” contracts (i.e. energy + renewable energy benefits), are the least-cost method of achieving a 50 percent renewable energy portfolio. Requiring utilities to buy renewable energy via long-term power purchase agreements will send a clear long-term signal to attract renewable energy companies and investors to New York. Further, setting long-term contracting requirements such that a majority of the total CES obligation is satisfied by projects built through long-term contracts will provide clarity and certainty that New York is on track to achieve the 50 percent over time.
6. Nuclear Energy Should Not be Part of the CES. Nuclear energy, while low-carbon, is neither clean nor renewable and therefore should be kept separate from the Clean Energy Standard. Under no circumstances should nuclear energy be counted toward the state’s 50 percent renewable energy requirement, nor should any funds for renewable energy be diverted to support New York’s failing nuclear plants, including but not limited to existing funding pools such as the current systems benefit charge, the Clean Energy Fund, and Regional Greenhouse Gas Initiative (RGGI) proceeds. Renewable energy and energy efficiency are more environmentally responsible and more cost-effective long term investments than nuclear energy.
7. The CES Should Support Diverse Clean, Renewable Technologies that Benefit All New Yorkers and Promote Building New Renewables in New York State. The CES should not be a route to importing already-existing hydropower from Canada. It should drive development of renewable resources that otherwise would not be built, and lead to economic and environmental benefits inside New York State. In order to achieve 50 percent, New York will need to double our renewable energy generation within 14 years, and the full range of clean, renewable technologies should be tapped. The Clean Energy Standard will create a more diversified and resilient portfolio, which if coupled with Governor Cuomo’s existing economic development programs can create jobs throughout the renewable energy supply chain in every region of the State. The CES should not be a route to merely import renewable energy from other states. It should prioritize and lead to local economic development within our state. Whenever possible, the CES should promote community and local ownership of renewable energy in order to smooth the way for local support for renewable energy and ensure the highest economic benefits to New Yorkers.