New York renewable energy sources act

Summary of revisions to s2715

Section 1 - New language adds intent to create a diverse renewable energy industry in NY State that maximizes clean energy jobs and encourages the direct participation of a diverse set of owners of generation, including homeowners, large and small business, public entities, and non-profit entities.

Section 2 Changes the name from the "New York renewable energy sources act" to the "New York renewable energy stimulus act".

1 (f) Adds run of river hydro and tidal hydro to the "eligible energy technology" definition and strikes hydrogen, which is basically a storage energy form and for which there were no proposed tariff prices in the original bill. (g) Changes "facade cladding" definition to "facade or integrated rooftop cladding" for solar projects. (h) (i) (q) Adds definitions for large, medium and small wind systems to allow a differentiated tariff for those technologies. (j)Defines a "levelized rate" so that it is clearly understood that once a tariff rate is set for a power purchase agreement that rate remains unchanged for the term of the agreement. (j)Strikes the former (j) which defined a "qualified owner" in several ways that require NY residency to recoup the feed in tariff. This definition limited the market for renewable projects and would have cut rate paying businesses out of the program. In (n) it is specified that projects must be within the borders of NY State. (k)Defines a "net metered photovoltaic generator" to allow a lower tariff rate to account for cost reductions an owner receives under net metering.

2. Takes out "state owned" as the tariff doesn't require state ownership of projects.

5. Amends the wind energy tariff to create an advanced renewable tariff that sets different rates for different sized turbines. It also sets a different rate based on the wind regime that is experienced in

the first 5 years of operation of the turbine, allowing the tariff to be scaled to the lowest needed rate. 5. (a) Changes original language which treated the tariff rates as a floor. The new language recognizes them as a starting point which will be altered by the Public Service Commission during a yearly review process. This language change is repeated for each type of renewable technology. 5. (a) (5) through (7) Sets variable rates for offshore projects based on water depth, allowing the tariff to be scaled to the lowest needed rate. 5. (a) (8) Provides a 2c per kWh increase for wind projects whose owners are not legally allowed to access the federal production tax credit or the investment tax credit. 5. (b) (c) and (d) Adjusts rates for hydroelectric, biomass, and landfill gas down to account for federal tax credits. 5. (e) Redefines solar project categories by capacity and ability of the project to net meter as opposed to where the solar panels are mounted, and solar rates are adjusted down to reflect market conditions and the availability of various incentives. 5. (e) (6) through (9) Provides "adders" of Sc per kWh for solar projects that are facades or integrated cladding, for projects that are in non-attainment areas, NYISO defined load pockets, and brownfields. 5. (e) (10) Provides a 5c per kWh adder for solar projects using at least 75% labor and materials sourced in NY State. 5. (e) (11) Provides a 10 c per kWh adder for solar projects whose owners are not legally allowed to access the federal production tax credit or the investment tax credit. 5. Provides that no project will be allowed to make use of more than 2 of the adders. 5. (f) Rates for hydrokinetic run of river and tidal projects were adjusted down to account for federal tax credits.

6 (a) Sets a yearly cap on solar projects to protect ratepayers as solar projects are the most expensive of the renewable technologies covered by the tariff. Depending on the degree to which the tariff supplants rebates paid through the Systems Benefit Charge, the NY Solar Energy Industries Association (NYSEIA) projects the solar portion of the tariff will add 0 to 17 cents per month to the average ratepayer's bill. NYSEIA projects that if a third of proposed rebates are supplanted, the solar portion of the tariff would be revenue neutral for rate payers 6. (b) Sets a schedule by which power purchase agreements are allocated under the solar cap. 6. (c) Prevents anyone solar developer from capturing more than 20% of the market in a given year in an attempt to avoid monopoly and ensure a diverse and competitive group of developers. 6. (d) Reserves 25% of solar capacity for residential projects so the benefits of the tariff are spread widely among New Yorkers, with provisions for adjustments if that total is not reached. 6. (e) Limits the largest (2 MW) solar projects to 25% of the cap so the benefits of the tariff are not concentrated in too few projects and jobs are created installing many projects.

7. (a) Provides that utilities and those receiving power purchase agreements under this tariff will not receive payments for NYS Renewable Energy credits, and the power generated under the tariff will be used to reduce obligations under the NYS Renewable Portfolio Standard. 7. (b) Provides that value for carbon credits received under the Regional Greenhouse Gas Initiative, or other credit trading regimes shall be the property of the utility that entered into the power purchase agreement, and those credits shall be used to reduce the costs of this tariff to ratepayers. 7. (c) Provides that those receiving power purchase agreements under this tariff shall not be prevented from receiving federal or state tax credits, but that the amount funded by the power purchase agreement will be reduced by the amount of rebates received that are funded under the NYS Systems Benefit Charge.

8. (a) Provides that starting February 1, 2011, the PSC shall review the rates adopted under the tariff annually and adjust them to reflect market conditions. It is the stated intent of the legislation for the rates to be reduced by at least 5% per year.

10. Provides that energy will be paid for on an as delivered basis, and there will be no penalties for failure to deliver a specific quantity. However, contracts can be cancelled if systems are not completed and operating within a reasonable amount of time.

12. Provides that utilities will be allowed to recover legitimate costs incurred under this tariff, including costs related to tariff contracts being imputed as debt.

Justification

To ensure the continued prosperity of New York State and the United States generally, we must break our dependence on imported oil and the pollution, price-spikes and political instability that come with it. Rapid installation of renewable electricity generating equipment is the most efficient means of achieving this goal. This bill establishes incentives in the form of mandatory purchase agreements with utility companies that reward early installation of renewable energy generation equipment and guarantee a long term return on investment. The program offers different rate schedules for the various modes of renewable generation allowing small entrepreneurs to compete on even terms with larger companies.

The current regime of incentive programs for renewable energy generation in New York State has not significantly increased the amount of renewable energy generated.

Similar feed-in tariff legislation passed in Germany resulted in a doubling of the renewable energy generating capacity in only four years and the German Government estimates that they will generate 12.5% of the nation's energy by 2010 and 20% by 2020.

New York has the opportunity to be a national leader in the generation of renewable electricity and to guarantee economic prosperity through the development of new green jobs. This legislation can be the first step toward reaching those goals and ensuring the less expensive and cleaner power we need for the future.

Legislative history

This is a new bill.

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately.