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New York

New York

Incentives/Policies for Renewables & Efficiency

Printable Version
Energy Efficiency Portfolio Standard   

Last DSIRE Review: 09/25/2014
Program Overview:
State: New York
Incentive Type: Energy Efficiency Resource Standard
Eligible Efficiency Technologies: Unspecified Technologies
Applicable Sectors: Investor-Owned Utility, Natural Gas Utilities With 14,000 or More Customers
Electric Sales Reduction15% reduction relative to projected electricity use in 2015
Electric Peak Demand ReductionN/A
Natural Gas Sales ReductionGas savings of 112 Bcf annually by 2020 (equates to 14.7% of projected use in 2020)
Rate Impact ParametersNone specifically identified, but PSC establishes collections and approves utility programs
Web Site: http://www3.dps.ny.gov/W/PSCWeb.nsf/All/2197DAD6F78ECCB085257BA90...
Authority 1:
Date Enacted:
Date Effective:
NY PSC Order, Case 07-M-0548
05/19/2009
05/19/2009
Authority 2:
Date Enacted:
Proceeding for establishing Clean Energy Fund Case 14-M-0094
05/08/2014
Authority 3:
Date Enacted:
Date Effective:
NY PSC Order, Case 07-M-0548
03/22/2012
01/01/2012
Summary:

NOTE: PSC order in May 2014 started a proceeding to consider the development of Clean Energy Fund aligning with the recent developments in the clean energy sector in NY including the Green Bank, NY-Sun, and Reforming Energy Vision (REV).   

In May 2007 the New York Public Service Commission (PSC) issued an order instituting a proceeding to develop an Energy Efficiency Portfolio Standard (EEPS). The order set a goal of reducing electricity usage in New York by 15% from projected electricity usage in 2015. After examining comments and input from staff and stakeholders, the PSC issued a further order in June 2008 establishing detailed program targets, ratepayer collections to fund energy efficiency programs, and various other protocols for the EEPS. The June 2008 order also established collections from natural gas customers to fund gas efficiency programs although at the time targets for natural gas efficiency were still under development. In May 2009 the PSC issued another order establishing gas efficiency targets of 4.35 billion cubic feet (Bcf) annually for 2009 -2011, and 3.45 Bcf annually for 2012 – 2020, resulting in a program related gas savings target of 44 Bcf annually in 2020. In October 2011 the PSC issued a further order reauthorizing EEPS programs through December 31, 2015 and suspending a portion of the program that provides utilities with financial incentives for achieving efficiency targets. A subsequent March 2012 order reinstated the utility incentives for for 2012 - 2015 under a revised structure.

The programs are funded through surcharges on retail sales of electricity and natural gas. Collections from electricity customers are administered as an addition to the New York System Benefits Charge (SBC). Under the June 2008 order, collections amount to an average of $159 million annually from October 1, 2008 through December 31, 2011. The collections are intended to support a combination of so-called “fast-track” programs, some of which will be administered by the utilities ($74.2 million) and some which will be administered by NYSERDA as expansions or additions to existing SBC programs ($85.2 million). Beyond these fast-track programs, additional collections for further programs were estimated at an average of $170 million annually through 2011 leading to total expected costs of roughly $330 million annually. As described by a July 2011 Staff White Paper, actual program collections for approved programs totaled roughly $286 million annually in 2011. The October 2011 order lists an overall projected total of $1.18 billion in electric contributions (combined SBC and EEPS) for 2012 - 2015. In December 2012 the PSC issued an order transferring roughly $86.7 million in EEPS funding (consisting of uncommitted funding and budget reductions for two programs) to support CHP and workforce development initiatives within NYSERDA's Technology and Market Development program portfolio.

The June 2008 order also established collections from natural gas customers at $13.2 million annually from October 1, 2008 through December 31, 2011 for fast-track programs. The authorization applies only to gas utilities with 14,000 customers or more. The May 2009 order anticipated collections of $130 million annually (an incremental increase of $56 million annually over existing gas efficiency programs) to meet the program goals. The October 2011 order lists an overall projected total of  $450 million in gas contributions (combined SBC and EEPS) for 2012 - 2015. As with the electric portion of the target, programs will consist of a combination of utility-administered and NYSERDA-administered programs.

It should be noted that the targets above were developed and defined with the recognition that some factors which affect electricity and natural gas consumption are beyond the jurisdiction and control of the PSC. For instance, for the electricity savings targets and funding requirements, the PSC calculated “jurisdictional gap” targets that accounts for the electricity savings by providers not under the PSC’s jurisdiction (e.g., LIPA, NYPA) and electricity savings contributions from other sources (e.g., codes and standards, existing SBC programs, state agency mandates). Thus while total electricity sales reductions under the 15% by 2015 standard would require savings of roughly 29.4 million megawatt-hours (MWh) annually in 2015, the EEPS jurisdictional program target is roughly 7.7 million MWh annually in 2015. When combined with the incorporation of SBC III programs into the EEPS, the total electric jurisdictional gap is 11.2 million MWh annually in 2015. Likewise, the total reduction in gas usage expected from EEPS gas savings programs is 44 Bcf annually in 2020, but savings from other sources could increase this to 112 Bcf annually by 2020. Savings of 112 Bcf annually would equate to a gas usage reduction of roughly 14.7% of expected demand in 2020. A December 2012 PSC order made reductions to the MWh and dekatherm targets associated with NYSERDA's suite of EEPS programs in response to changing market conditions and better information about program operation and effectiveness. The order indicates that the PSC does not view the changes as jeopardizing the achievement of the overall 2015 jurisdictional target.

The program web site above contains the full history of EEPS program development under the PSC, including information on EEPS evaluation methods, measurement and verification, and PSC approvals of NYSERDA and utility program offerings.

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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

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