What's happening
This bill allows business customers to be exempt from the clean energy standard mandate for electricity supply in New York.
Why it matters
Could lower costs for large business customers. By exempting business customers from the clean energy standard, their electricity could be cheaper, potentially making New York more attractive for energy-intensive industries or large employers.
May impact New York’s clean energy progress. Allowing a significant segment of electricity demand to opt out of the clean standard could slow the state’s overall transition to renewable power and make it harder to meet climate goals.
Raises questions about fairness and competition. Residential customers and smaller businesses would still have to comply with the clean energy mandate, possibly bearing a larger share of costs and responsibility for the state’s clean energy transition.
Intends to address “carbon leakage”. The bill is framed as preventing “carbon leakage,” which refers to businesses relocating to states with less stringent energy or environmental standards—a concern for economic competitiveness in regions with ambitious climate policies.
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Who cares
Headline styles
Exempt Businesses from Clean Energy
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to energy and telecommunications
- Referred to energy and telecommunications
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3747
2017-2018 Regular Sessions
IN SENATE
January 26, 2017
Introduced by Sen. GRIFFO -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Telecommunications
AN ACT to amend the public service law, in relation to establishment of a carbon leakage prevention program
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. This act shall be known and may be cited as the "Leakage Prevention Clean Energy Act".
§ 2. The public service law is amended by adding a new section 18-b to read as follows:
§ 18-b. Exclusion from the clean energy standard. Notwithstanding any law, rule, regulation or order to the contrary, the commission shall authorize all electric retail load serving entities to offer to business customers generation supply that is exempt from the electric retail load serving entities obligation of the clean energy standard mandate and each electric retail load serving entity shall have the electric retail load serving entities obligation reduced by the business customer load exempt from the clean energy standard mandate.
§ 3. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08597-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the public service law, in relation to establishment of a carbon leakage prevention program
Purpose of the bill
The purpose of this bill is to direct the public service commission to establish a measure to reduce carbon leakage associated with the Clean Energy Standard mandate.
Summary of provisions
Section 2 of the legislation provides that electric load serving entities can offer to business customers' generation supply that is exempt from their obligation under the Clean Energy Standard.
Read the full memo (632 words)
Justification
Some projections indicate that the Clean Energy Standard (CES) will result in only a minor increase in the cost of electricity while other projections predict that the CES may have a significant impact on the cost of electricity. What is clear is that the CES and the current New York State energy assessments lead to an increase in the cost of energy, which hurts New York State's economy.
When the price of electricity in New York goes up relative to other locations (states or countries), jobs, investments & businesses either leave or the businesses become uncompetitive. The State must ensure that when New York adopts policies to address GHG locally, they must not lead to carbon leakage; this defeats the GHG reductions and hurts our economy. It should be noted that New York's energy related per capita emissions of 8.8 tons are the lowest of the 50 States and New York leads the nation in having the lowest GHG emissions per unit of economic output, averaging .19 kg per CO2E of emissions per GSP.
The European experience can demonstrate that well-intentioned environmental policies have resulted in higher energy costs, driving carbon leakage and output leakage. The New York Times reported:
"The expansion in renewables will probably ensure that Europe will meet its target of reducing greenhouse gases 20 percent from their 1990 levels by 2020. But it has been a disappointment on other levels. For one thing, emissions continue to rise globally. In a sense, Europe is likely to have exported its emissions to places like China, where polluting economic activity continues to increase while the European economy stagnates." NY Times Dec 26, 2012 Germany and other European nations seeing the issue of carbon leakage have adopted policies to exclude businesses from the costs of their renewable programs. Germany understands that the costs of regulations affect the competitiveness of companies and the overall economic growth in Germany, and that "Energy prices are a key factor for the competiveness of many German companies". Ecofys Group Report July 25th 2015 for the German Ministry of Economic Affairs and Energy
A report analyzing the effect of power prices on German industry competitiveness issued by the Fraunhofer Institute for Systems and Innovation Research, under contract with the German Ministry of Economic Affairs and Energy, found that exemptions from levies and taxes on electricity prices for energy intensive manufacturers were critical to "support the competitiveness of the industry and have positive macroeconomic effects." Put another way, if energy intensive industries had to pay the full levies to fund renewable technologies in Germany via electricity prices, it would have a devastating effect on the German economy. In fact, Germany provides a number of exemptions or other mechanisms to mitigate energy cost for energy. If New York does not adopt a measure to address carbon leakage, the proposed CES will result in the exportation of New York's CO2 emissions. The Leakage Prevention Clean Energy Act will not reduce the State's commitment to renewable energy; however, it will insulate New York State from economic harm.
Prior legislative history
2016 - S. 7886 - Rules Committee.
Fiscal implications
The bill would have no impact on the State budget.
Effective date
The bill would be effective immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.