Albany, New York February 9, 2015 – New York State is continuing to move forward to bring distributed energy resources such as solar, energy efficiency and battery storage into the forefront of its energy mix. In December of last year, its Governor Andrew Cuomo formally banned hydraulic fracking for shale gas to the approval of some and the anger of others. The state is expanding program funding for its main energy research authority (NYSERDA). It has set in motion an energy regulatory and policy review called Reforming the Energy Vision (REV) and is in the process of having all of its state’s electric utilities develop proposals to begin offering commercial customer driven Demand Response programs. In addition it has established one of the country’s first clean energy financial banks called Green Bank; initiated a formal approach to expanding PACE financing with participating municipalities under its EnergizeNY program while it continues to support leading battery research through a joint program with private industry called the New York Battery Energy & Energy Storage Technology consortium. In last several years, New York appears to have set in motion a series of initiatives which will be as significant and transformative of those energy policy actions taking place currently in California.
Governor Cuomo’s December 2014 decision to ban hydraulic fracking throughout the state is significant. The decision is a first for a major state with some potential for producing shale based oil and gas. It comes as it neighboring Pennsylvania has become the largest single state producer of natural gas in the country. It is also a significant decision because New York state officials, unlike Pennsylvania officials, elected to take the previously unheard of decision by state governments that it is the oil and gas industry which must prove to New York State its practices and operations are inherently safe and pose no long term harm to New York State residents. This is a difficult challenge for the oil and gas industry as it continues to maintain it cannot publish the many chemicals and toxins involved in their hydraulic fracking processes because the industry deems their formulations to be “trade secrets”. New York’s Western Catskills drinking water reservoirs which supply millions with drinking water which are in some cases less than 50 miles from active fracking operations on the other side of the Pennsylvania border played a role in the state’s decision. As well concerns to upstate New York’s tourist and organic food and wine industries combined with several leading independent petroleum geologists studies of rather limited potential for technically recoverable shale oil and gas based on how the shale play is formed within New York’s boundaries also played roles in the state’s decision to ban fracking.
The main state entity in charge with supporting clean energy developments with New York State, NYSERDA continues to expand. Per its web site, “The New York State Energy Research and Development Authority (NYSERDA), a public benefit corporation, offers objective information and analysis, innovative programs, technical expertise, and funding to help New Yorkers increase energy efficiency, save money, use renewable energy, and reduce reliance on fossil fuels.” NYSERDA offers a robust mix of financial incentives, grants and educational outreach programs to spur in state clean energy development. Its highly successful PV solar rebate program, NY-Sun continues to train hundreds of contractors in installation of residential and commercial solar systems while offering financial incentives to property owners which among other things has resulted in Long Island reaching a record 10,000 solar installations.
In July 2014, New York State Public Service Commission enacted a policy review called Reforming the Energy Vision to aimed at making major market driven changes to its electric utilities and their traditional business model. REV, as it is called, is intended to open up customer choice and control on their monthly electric bills while driving a greater deployment of Distributed Energy Resources such PV solar, wind, energy efficiency and battery storage. Headed by New York commissioner Audrey Zibelman, the main goal of REV is to seek market side driven decreases in peak demand so electric utilities do not have to continue building costly and difficult to maintain centralized transmission and distribution infrastructure. The REV initiative came about in part due to severe damage and extensive power outages which resulted from Superstorm Sandy, an extreme weather event which many believe will occur more regularly in the future due to ongoing changes in weather patterns.
State energy authorities are in the process of expanding Con Edison’s industry leading Demand Response incentive programs in cooperation and support with NYSERDA. Con Edison now provides up to $2,100.00 dollars per kW for installed battery storage systems along with a five months of high peak demand electricity financial incentives to those of its commercial customers who can quickly and safely leave Con Edison’s electric grid during certain days of the electricity peak summer months and return to the grid upon the utility’s requirements. The program which has been in place now for several years is designed to seek market side driven reductions in electricity use instead of Con Edison constantly being required to build more infrastructure. State officials have instructed the state’s other electric utilities outside of the Con Edison service area to submit proposals for offering their own Demand Response programs in their service areas.
State energy and governmental officials recently created New York Green Bank designed to help supply financial capital at market rates to those renewable energy project developers and clean energy equipment manufacturers who typically encounter private capital market hesitation or obstacles to finding capital to build an ongoing flow of PV solar, wind, battery storage and energy efficiency projects. Green Bank brings both a level of capital and private market risk mitigation support in order to encourage the financiers and lenders to see and experience first hand all the value and benefits of renewable energy deployment. New Jersey has instituted a similar banking entity and strategy with its 2014 introduction and $200 million infusion its state financially supported entity called, New Jersey’s Energy Resilience Bank
These major actions combined with state’s EnergizeNY PACE financing program designed to carry the cost of installed Distributed Energy Resource technologies within a given building’s property taxes and the state’s NYBEST best in class R&D work in battery technologies are also playing important roles in New York State’s energy mix. EnergizeNY now has more than 15 major municipalities and several counties participating in its program while NYBEST now counts more than 80 participating private industry firms, many based in New York State.
New York State’s political leadership has made a major decision regarding how and where its energy resources are to be managed over the long term. It has clearly decided, for the time being, its future does not lie in ever more oil and gas industry development but rather in a unique series of market driven clean and renewable energy sources. How this all plays out going forward will not only be of great interest to other states but also now allows a direct comparison of differing energy development paths between New York and Pennsylvania.