BILL NUMBER: S734
SPONSOR: MAY
 
TITLE OF BILL:
An act to amend the public authorities law and the state finance law, in
relation to establishing an energy project revolving loan program and
energy project revolving loan fund
 
PURPOSE:
To create a revolving loan program for zero-emission energy projects
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 adds a new section 1018 to the public authorities low to
establish the energy project revolving loan program
Section 2 adds a new section 99-ss to establish the energy project
revolving loan fund
Section 3 establishes the effective date of the bill
 
JUSTIFICATION:
The pace of New York State's energy transition to fight climate change
and fulfill its Climate and Community Protection Act goals has been much
discussed. One key factor decreasing the pace at which new zero-emission
energy can be brought onto the grid is the cost of financing.
The cost of financing, or interest rates, is often referred to as the
"fuel" of renewable energy; since solar and wind don't have traditional
ongoing fuel costs, the price of financing largely determines the cost
of energy output. One natural resources firm estimated that the cost of
a 2% increase in interest rate increases the cost of a renewable energy
project by about 20%.
By driving down the cost of borrowing by creating a revolving loan fund
for energy construction, New York state can create more viable energy
projects while reducing the costs to consumers of energy, a win-win.
This strategy would work well in conjunction with the Build Public
Renewables Act, enabling the pipeline of energy projects identified by
the New York Power Authority to be created faster.
Revolving funds work by issuing loans at cheaper rates than typical
market rate loans for energy construction financing. Once the project is
completed, project owners are then able to obtain permanent financing at
a cheaper rate. The owners then pay the original loan back to the
revolving loan fund, ready to be used again. We believe this is a
prudent use of public dollars to create a virtuous cycle of investment
well into the future.
 
LEGISLATIVE HISTORY:
New bill
 
FISCAL IMPLICATIONS:
Subject to appropriation
 
EFFECTIVE DATE:
Immediately
1 https://heatmap.news/economy/federal-reserve-interest-rates-energy