Permits agencies, municipalities and public authorities to enter into power purchase agreements

8 Co-sponsors

• Adriano Espaillat
• Simcha Felder
• Terry Gipson
• Ruth Hassell-Thompson
• Kevin S. Parker
• John L. Sampson
• James L. Seward
• Cecilia Tkaczyk

BILL NUMBER:S6949A

Title of bill

An act to amend the energy law, in relation to permitting agencies, municipalities and public authorities to enter into power purchase agreements

Purpose

This bill seeks to amend the energy law to clearly provide the statutory authority for agencies, municipalities and public authorities to enter into solar power purchase agreements.

Summary of provisions

Section 1 of the bill seeks to amend section 9-102 of the Energy Law to provide a definition for the term "solar power purchase agreement".

Section 2 of the bill seeks to amend section 9-103 in several respects:

1. To permit power purchase agreements of up to 20 years duration.

2. To require that electricity purchased through a solar power purchase agreement at a rate per kilowatt hour that is lower than the rate offered by the electric utility company servicing the municipality and at a total cost reasonably determined to produce savings over the life of the agreement.

3. To permit excess electricity generated by solar powered generating systems, to be resold through net metering, electricity credits or other means.

4. To permit municipalities to utilize a request for proposal (RFP) process to solicit and award solar power purchase agreements.

5. To authorize the Commissioner of Education to promulgate necessary regulations pertaining to the construction, operation and maintenance of solar powered electricity generating equipment on the property of a school district or BOCES.

Sections 3, provides that the act shall take effect immediately.

Existing law

Currently, the energy law authorizes agencies, municipalities and public authorities to enter into energy performance contracts, but is silent as to solar power purchase agreements. Other sections of law such as section 103 of the General Municipal Law would appear to be impediments to the use of power purchase agreements by public entities. Without this law school boards would only be able to enter into power purchase agreements of up to one year duration.

Justification

The clearly stated public policy of our nation and our state is to reduce our dependency on energy from fossil fuels and to increase our use of clean or green, renewable sources of energy. In furtherance of this public policy, tax and other incentives are available to solar energy producing companies that make it feasible for them to offer solar powered electricity generating systems to large electricity users with no initial capital outlay by the users, while supplying electricity to such users at a rate per kilowatt hour

that as much as 30% or more lower that the rates offered by the existing utility company serving the user.

Current law provides no clear authorization for cities, town, villages, school districts and other public entities to enter into the types of solar power purchase agreements currently being offered due to the requirements for competitive bidding, limitations of contracts to one year and/or restrictions on the use of public property.

In a time of fiscal challenges for all municipal entities, they need all the tools possible to reduce costs, while still delivering the services required by their mission. This bill will allow municipalities to realize savings in the cost of electricity, while improving our environment and helping us meet our state and national goals of reducing our dependence on fossil fuels.

Legislative history

This is a new bill.

Effective date

Immediately, upon enactment.