senate Bill S6949

Amended

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

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 07 / Apr / 2014
    • REFERRED TO ENERGY AND TELECOMMUNICATIONS
  • 09 / May / 2014
    • AMEND AND RECOMMIT TO ENERGY AND TELECOMMUNICATIONS
  • 09 / May / 2014
    • PRINT NUMBER 6949A

Summary

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

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Bill Details

Versions:
S6949
S6949A
Legislative Cycle:
2013-2014
Current Committee:
Senate Energy And Telecommunications
Law Section:
Energy Law
Laws Affected:
Amd ยงยง9-102 & 9-103, Energy L

Sponsor Memo

BILL NUMBER:S6949

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 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 "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 area 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.

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.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6949

                            I N  S E N A T E

                              April 7, 2014
                               ___________

Introduced by Sen. MARCHIONE -- read twice and ordered printed, and when
  printed  to  be  committed to the Committee on Energy and Telecommuni-
  cations

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

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Section 9-102 of the energy law is amended by adding a new
subdivision 5 to read as follows:
  5. "SOLAR  POWER  PURCHASE  AGREEMENT"  MEANS  AN  AGREEMENT  FOR  THE
PURCHASE  OF ELECTRICITY, PRODUCED BY SOLAR POWERED ELECTRICITY GENERAT-
ING SYSTEMS, IN WHICH A PERSON AGREES TO INSTALL,  MAINTAIN  AND  MANAGE
ELECTRICITY  GENERATING SYSTEMS OR EQUIPMENT TO PRODUCE SUCH ELECTRICITY
WITH NO CAPITAL OUTLAY OR INVESTMENT  BY  THE  AGENCY,  MUNICIPALITY  OR
PUBLIC  AUTHORITY, IN EXCHANGE FOR A LONG TERM AGREEMENT TO PURCHASE THE
ELECTRICITY  PRODUCED  BY  SUCH  SOLAR  POWERED  ELECTRICITY  GENERATING
SYSTEMS  OR EQUIPMENT AT A CURRENT COST PER KILOWATT HOUR LESS THAN THAT
OFFERED BY THE UTILITY COMPANY SERVICING THE AREA OF SUCH AGENCY,  MUNI-
CIPALITY  OR  PUBLIC  AUTHORITY AND AT A TOTAL COST OVER THE LIFE OF THE
AGREEMENT THAT IS REASONABLY DETERMINED BY THE GOVERNING BOARD  OF  SUCH
AGENCY, MUNICIPALITY OR PUBLIC AUTHORITY TO BE LESS THAN IT WOULD OTHER-
WISE PAY TO THE UTILITY SERVICING ITS LOCATION.
  S  2.  Section 9-103 of the energy law, as added by chapter 733 of the
laws of 1985, subdivision 1 as amended and subdivision  5  as  added  by
chapter  638  of the laws of 1989, subdivision 3 as amended and subdivi-
sions 6 and 7 as added by chapter 368 of the laws of 1994, subdivision 4
as amended by chapter 83 of the laws of 1995 and subdivision 8 as  added
by  section  78 of part A of chapter 436 of the laws of 1997, is amended
to read as follows:
  S 9-103. Energy performance contracts AND SOLAR POWER PURCHASE  AGREE-
MENTS.  1. Notwithstanding any other provision of law, any agency, muni-
cipality,  or  public  authority,  in  addition  to  existing powers, is
authorized to enter into energy performance contracts of up  to  thirty-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14485-01-4

S. 6949                             2

five  years  duration OR SOLAR POWER PURCHASE AGREEMENTS OF UP TO TWENTY
YEARS DURATION, provided, that the duration of any such  contract  shall
not  exceed the reasonably expected useful life of the energy facilities
or  equipment  subject  to  such contract.   PROVIDING FURTHER THAT WITH
RESPECT TO SOLAR POWER PURCHASE AGREEMENTS, SUCH AGENCY, MUNICIPALITY OR
PUBLIC AUTHORITY IS AUTHORIZED TO RESELL ANY EXCESS  ELECTRICITY  GENER-
ATED  BY  SUCH SOLAR POWERED ELECTRICITY GENERATING SYSTEMS OR EQUIPMENT
THROUGH THE USE OF A NET METERING SYSTEM, ELECTRICITY CREDITS  OR  OTHER
MEANS APPROVED BY NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHOR-
ITY,  THE  NEW  YORK  INDEPENDENT SYSTEM OPERATORS OR THE PUBLIC SERVICE
COMMISSION.
  2. Any energy performance contract OR SOLAR POWER  PURCHASE  AGREEMENT
entered  into  by any agency or municipality shall contain the following
clause: "This contract shall be deemed executory only to the  extent  of
the  monies  appropriated and available for the purpose of the contract,
and no liability on account therefor shall be incurred beyond the amount
of such monies. It is understood that  neither  this  contract  nor  any
representation  by  any  public employee or officer creates any legal or
moral obligation to request, appropriate or make  available  monies  for
the purpose of the contract."
  3.  In  the case of a school district or a board of cooperative educa-
tional services, an energy performance contract OR SOLAR POWER  PURCHASE
AGREEMENT shall be an ordinary contingent expense, and shall in no event
be  construed  as  or  deemed a lease or lease-purchase of a building or
facility, for purposes of the education law.
  4. Agencies, municipalities, and public authorities are encouraged  to
consult  with  and  seek  advice  and assistance from the New York state
energy research and development authority concerning energy  performance
contracts AND/OR SOLAR POWER PURCHASE AGREEMENTS.
  5.  Notwithstanding  any other provision of law, in order to convey an
interest in real property necessary for the construction  of  facilities
or  the  operation  of  equipment  provided for in an energy performance
contract OR SOLAR POWER PURCHASE AGREEMENT, any agency, municipality  or
public  authority  may enter into a lease of such real property to which
it holds title or which is under its administrative jurisdiction  as  is
necessary for such construction or operation, with an energy performance
contractor,  for  the  same  length  of  time as the term of such energy
performance contract OR SOLAR POWER  PURCHASE  AGREEMENT,  and  on  such
terms  and conditions as may be agreeable to the parties thereto and are
not otherwise inconsistent with law, and notwithstanding that such  real
property  may  remain  useful  to  such  agency,  municipality or public
authority for the purpose for which such real  property  was  originally
acquired or devoted or for which such real property is being used.
  6. In lieu of any other competitive procurement or acquisition process
that  may apply pursuant to any other provision of law, an agency, muni-
cipality, or public authority may procure an energy performance OR SOLAR
POWER PURCHASE contractor by issuing and advertising a  written  request
for  proposals  in accordance with procurement or internal control poli-
cies, procedures, or guidelines that the agency, municipality, or public
authority has adopted pursuant to applicable  provisions  of  the  state
finance law, the executive law, the general municipal law, or the public
authorities law, as the case may be.
  7.  Sections  one  hundred three and one hundred nine-b of the general
municipal law shall not apply to an energy performance contract OR SOLAR
POWER PURCHASE AGREEMENT for which a written request  for  proposals  is
issued pursuant to subdivision six of this section.

S. 6949                             3

  8.   In the case of a school district or a board of cooperative educa-
tional services, an energy performance contract OR SOLAR POWER  PURCHASE
AGREEMENT  shall  be developed and approved pursuant to the requirements
of this section and pursuant to regulations promulgated by  the  commis-
sioner  of  education  in  consultation  with  the New York state energy
research and development authority.  Such regulations shall include, but
shall not be limited to: a list of the appropriate type of projects that
qualify as energy performance contracts OR SOLAR POWER  PURCHASE  AGREE-
MENTS;  an  approval process that includes review of the type and nature
of the proposed project,  the  scope  and  nature  of  the  work  to  be
performed,  and a detailed breakdown of the energy savings to be derived
each year and for the duration of the energy performance  contract;  and
IN THE CASE OF ENERGY PERFORMANCE CONTRACTS, a process for ensuring that
districts  have  obtained  financing  at the lowest cost possible.  Such
regulations shall require that all energy  performance  contracts  which
contain  maintenance  and  monitoring  charges  as  part  of  the energy
performance contract price state such maintenance and monitoring charges
separately in the contract in a clear  and  conspicuous  manner.    Such
regulations shall not apply to energy performance contracts entered into
prior to the effective date of such regulations, nor shall they apply to
energy  performance  contracts  for  which  a  request for proposals was
issued prior to such effective date. SOLAR POWER PURCHASE AGREEMENTS MAY
NOT CONTAIN MAINTENANCE  AND  MONITORING  CHARGES  UNLESS  THE  DISTRICT
SPECIFICALLY  REQUESTS SPECIAL MONITORING AND DISPLAY OF THE FUNCTIONING
OF THE ENERGY SYSTEMS OR EQUIPMENT FOR EDUCATIONAL OR PUBLIC INFORMATION
PURPOSES AND THEN, THE MAINTENANCE AND MONITORING CHARGES CAN ONLY APPLY
TO SUCH EQUIPMENT AS IS  NECESSARY  FOR  THE  ADDITIONAL  MONITORING  OR
DISPLAY.
  S 3. This act shall take effect immediately.

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