BILL NUMBER: S4086
SPONSOR: PARKER
 
TITLE OF BILL:
An act to amend the public service law and the labor law, in relation to
providing net revenues from utility-owned large-scale renewable gener-
ation projects to low-income customers and authorizes utility companies
to own such projects
 
PURPOSE OR GENERAL IDEA OF BILL:
In order to meet the state's renewable energy goals, set forth by the
Climate Leadership and Community Protection Act (CLCPA), this legis-
lation authorizes New York's electric utilities to own a limited number
of large-scale renewable generating facilities in New York state.
Further, this legislation requires that all net revenues from the sale
of electricity and the production of renewable energy credits (RECs)
from utility-owned large-scale renewable generating facilities be
provided to low-income customers in the form of bill credits.
 
SUMMARY OF PROVISIONS:
Section one is legislative findings and intent.
Section two adds a new section 66-u to the public service law (PSL) to
explicitly authorize New York's energy utility companies to own and
operate renewable energy generating facilities and requires that all of
the net revenues from the sale of electricity and the production of RECs
from such renewable facilities be provided to low-income customers in
the form of bill credits (in addition to any other program or benefit
offered to such customers).
Section two also requires the utility-owned renewable generation facili-
ties covered by the legislation are subject to Public Service Commission
(PSC) oversight. This section also sets forth standards for utility-
owned renewable generating facilities. Such standards require that the
renewable power generated at such facilities remain in New York State
for the benefit of New Yorkers and that such power not be exported out
of state.
Further, section two states that utility-owned renewable generation
facilities be built pursuant to a competitive third-party bidding proc-
ess. This will ensure that New York maintains a robust private energy
developer market.
Section two also requires that prevailing wage and Buy America laws are
followed, and that the facility be owned and operated in a manner that
provides beneficial cost and rate impacts for customers. This section
also limits the amount of renewable generation capacity that can be
owned by utility companies in New York to twenty-five percent of the
total generation capacity needed to achieve the State's renewable energy
goals.
Finally, section two directs that the Commission shall issue such
orders, rules and regulations as may be necessary and appropriate to
implement this legislation.
Section three amends section 66-r of the public service law and defines
a covered renewable energy system.
Section three also establishes a Buy American requirement for the
procurement of iron or structural steel parts used in the performance of
each contract for the construction, reconstruction, alteration, repair,
improvement or maintenance of a covered renewable energy system. Such a
requirement may be waived if the requirement is not in the public inter-
est, would result in unreasonable costs, or the components or parts are
not manufactured in the United States in sufficient quantity or quality.
Section four amends section 224-d of the labor law and defines "covered
renewable energy system." The bill is effective immediately.
 
JUSTIFICATION:
The primary objectives of this legislation are to aid New York State in
meeting its 70% renewable energy by 2030 and 100% zero-emission elec-
tricity by 2040 goals (as mandated by the CLCPA) and ensure that low-in-
come customers share in the benefits of the clean energy future by
providing them with electric bill credits. It is vitally important that
low-income customers are not left behind in the clean energy transition.
These customers' involvement in energy efficiency programs and their
adoption rate for distributed energy resources are very low. Generally,
low-income customers do not have access to on-site solar and are under-
represented in community distributed generation. If these adoption
levels continue, low-income customers could experience increased energy
bills from the energy transition, while not reaping many of its bene-
fits.
The need for this legislation is immense and immediate. Only 3.5% of
the electric energy production in New York State is from existing non-
hydro renewables (i.e., wind, solar, and biomass) comprising approxi-
mately 2,100 MW built under the existing model with NYSERDA contracts,
since 2005. In order to meet the ambitious and critically important
renewable energy goals of the CLCPA, it is estimated that the State will
need to add new renewable generation at a rate four times faster than
the past sixteen years. This Herculean task will require an all hands-
on-deck approach, one that this legislation seeks to further. Since
1998 regulated utilities have been discouraged by the Public Service
Commission from owning and operating electric generation in New York
even though utilities have considerable expertise in renewables.
This legislation strikes the right balance between bringing additional
market participants into the fold to help the state achieve its clean
energy goals while ensuring the continuation of a robust private devel-
oper market. This is achieved in two ways: first, by requiring that all
renewable generation facilities built pursuant to this legislation be
done by a third-party private developer pursuant to a competitive
bidding process. Secondly, the legislation imposes a total limit on the
amount of generating capacity utilities would be authorized to own,
reserving the rest to other market participants. Further, this legis-
lation ensures that labor is respected through the applicability of
prevailing wage and Buy America requirements.
 
LOWER COST FOR CUSTOMERS:
This legislation both directly lowers costs for low-income customers
through bill credits but also lowers overall costs for all utility
customers by limiting the return on projects to a regulated rate set by
the Public Service Commission, utilizing utilities' lower capital cost
through high credit ratings, and retaining residual value of projects
after a 20-year cost recovery period.
 
BETTER RESULTS FOR NEW YORK STATE:
Under this legislation, customers retain value for the life of the
facility and utilities would be prohibited from selling energy and
renewable credits to other States. Further, utility-owned renewables
would earn a regulated rate of return for 20 years and then would oper-
ate in New York without any premium for the next 20+ years.
Additionally, New York utilities have a long-term interest in the state
and will not "flip" projects unless required to divest by the PSC, in
which case proceeds of the sale of such projects would go to customers.
 
PRIOR LEGISLATIVE HISTORY:
2023-24: 5737- REFERRED TO ENERGY AND TELECOMMUNICATIONS
2021/2022 - S9426: ordered to third reading rules cal.656
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S4086: 224-d labor law, 224-d(1) labor law