Establishes the gas energy system linked deposit program

An eligible project would be the purchase and installation of a gas energy system in connection with a conversion to natural gas which results in a greenhouse gas reduction. Gas energy systems are equipment which provides heating and may also include cooling and/or hot water through natural gas converted to energy.

The linked deposit model has been used in other state programs, such as at Empire State Development and it is a successful method for accessing reduced rate financing to help facilitate projects. Under the instant bill, the Green Bank and NYSERDA would facilitate the program, consistent with their role in forming public-private partnerships that provide residents and businesses with affordable capital based on bank loans at reduced interest rates. These bank loans are subsidized by corresponding "linked" state deposits.

Lenders making linked loans could not charge any discount, points, origination fees, handling fees, service charges, refinancing fees or penalties or any chart other than those normally charged and in such amounts normally charged by the lender for loans of the type being made without regard to the program.

NYSERDA would require monitoring and periodic reports on the activities of the program from lenders and borrowers regarding the status of the linked loan and the eligible projects to ensure compliance with the provisions and the intent of this legislation.

Justification

According to the Public Service Commission, "Natural gas is cleaner than other fossil fuels used for home heating and under current market conditions costs a third as much. Moreover, New York State is well-located geographically to take advantage of existing and newly developed natural gas supplies located outside our State but which, when competitively-priced, are available to supply customers within the State. New York's location relatively close to these new sources of supply could provide the State a competitive advantage in attracting and retaining employers concerned about costs of, and access to, a reliable source of energy. In addition, consumers may enjoy significant savings in household fuel expenses which in turn could benefit the State's economy to the extent that households redeploy those savings." (CASE 12-G-0297)

This bill offers a tried and true financial tool, that is in no way a subsidy, for the benefit of owners of single or multi-family residential properties as well as commercial properties, who wish to take advantage of the natural gas that is abundant in our region. Not long ago, natural gas used in New York was shipped from Canada or from the Gulf. The proximity of this clean fuel source should be taken advantage of where possible and where a customer decides to do so.

Expanding the availability of natural gas conversions to those who want to make the investment has the potential to help low-income customers and also is likely to have important implications for economic development and the job market within New York. This bill does not establish subsidies for natural gas, nor does it socialize the cost of natural gas conversions. It simply provides a funding mechanism opportunity for New Yorkers who want to improve their circumstances with respect to energy use.

Prior legislative history

New bill.

Fiscal implications

None.

Effective date

This act shall take effect on the one hundred twentieth day after it shall have become a law.