New York PSC establishes framework for Clean Energy Fund

The New York State Public Service Commission issued a Jan. 21 order establishing the framework for the Clean Energy Fund (CEF), which is a critical component of Reforming the Energy Vision (REV), New York’s comprehensive plan to reform the state’s power industry.

The order said that technology changes, consumer demands, and environmental exigencies simultaneously allow and compel reformation of state energy policies to transform the power sector to one that is: consumer centric; economically and environmentally efficient and sustainable; and embraces, rather than resists, market and business model innovation.

The 2015 New York State Energy Plan (SEP) and the commission’s various implementing orders make clear that the state will enable these changes through interdependent and necessary changes in policies and practices, building upon four major REV pillars:

  • First, targets will be clear and ambitious. The SEP includes a target to meet 50% of the state’s electric consumption with renewable resources in 2030, as well as targets of a 40% reduction in greenhouse gas emissions from 1990 levels and a 600 trillion Btu increase in statewide energy efficiency. Gov. Andrew M. Cuomo recently emphasized that, given the threat of climate change and the associated damage to New York’s economic and environmental health, the achievement of these targets is not optional. The Governor therefore directed the Department of Public Service to commence a proceeding to determine how best to convert the renewable generation target into an enforceable mandate through implementation of a Clean Energy Standard.
  •  Second, the state must revise the policies and practices governing how it regulates utilities and their business practices, impose obligations, and oversee retail market design, including rates and prices for electric service, to make certain that regulatory practices are consistent with the changes that need to occur. The commission’s various REV decisions and implementing proceedings concerning regulatory, business and market reform are the chief components of ensuring compatibility of the goals and the rules that will implement them.
  •  Third, the state will reexamine how it uses the tools of incentives and financial support for clean energy technology and markets to reduce costs, drive scale and reduce barriers to entry. NYSERDA’s new approaches under the CEF, which include both New York Green Bank (NYGB) and the NY-Sun programs, must be calibrated to achieve these objectives.
  • The fourth pillar consists of the actions the state takes as a participant in energy markets to lead by example. As a substantial energy consumer, as well as a supplier and provider of electricity through the New York Power Authority (NYPA) and the Long Island Power Authority (LIPA), New York state will make decisions that are consistent with, and serve as examples of, the evolved energy market envisioned by REV.

Each of these four pillars embrace the fundamental precept that clean energy deployed at scale holds the potential to address pressing environmental and energy challenges while providing enormous economic opportunity for New York.

Said the Jan. 21 order: “As we establish the framework for the CEF, we do so based on the understanding that the CEF will operate in the context of the pending Clean Energy Standard. In developing the Clean Energy Standard, the Commission will also consider whether any changes to the CEF are needed to ensure that the two programs are in full alignment. The CEF’s support for the delivery of energy efficiency and other distributed energy resources at scale are necessary elements for the Clean Energy Standard to achieve its mandate and for New York State to achieve its energy and environmental policy objectives.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.