senate Bill S6949A

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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  • 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:S6949A

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 solar 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 "solar 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
municipality 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.

4. To permit municipalities to utilize a request for proposal (RFP)
process to solicit and award solar power purchase agreements.

5. To authorize the Commissioner of Education to promulgate necessary
regulations pertaining to the construction, operation and maintenance
of solar powered electricity generating equipment on the property of a
school district or BOCES.

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--A

                            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 -- committee discharged, bill amended,  ordered  reprinted  as
  amended and recommitted to said committee

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
SOLAR POWERED ELECTRICITY GENERATING SYSTEMS OR EQUIPMENT ON REAL  PROP-
ERTY  OF  AN  AGENCY,  MUNICIPALITY OR PUBLIC AUTHORITY, TO PRODUCE SUCH
ELECTRICITY WITH NO CAPITAL OUTLAY OR INVESTMENT BY THE AGENCY,  MUNICI-
PALITY  OR  PUBLIC  AUTHORITY,  IN EXCHANGE FOR A LONG TERM AGREEMENT BY
SUCH AGENCY, MUNICIPALITY OR PUBLIC AUTHORITY TO PURCHASE THE  ELECTRIC-
ITY  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  SUCH  AGENCY,  MUNICIPALITY  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, MUNICI-
PALITY OR PUBLIC AUTHORITY TO BE LESS THAN IT WOULD OTHERWISE 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:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14485-02-4

S. 6949--A                          2

  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-
five  years  duration OR SOLAR POWER PURCHASE AGREEMENTS OF UP TO TWENTY
YEARS DURATION, provided, that the duration  of  any  such  contract  OR
AGREEMENT  shall  not  exceed the reasonably expected useful life of the
energy facilities,  SOLAR  POWERED  ELECTRICITY  GENERATING  SYSTEMS  or
equipment  subject  to  such  contract;  AND  PROVIDED 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  THE  NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT
AUTHORITY, THE NEW YORK  INDEPENDENT  SYSTEM  OPERATORS  OR  THE  PUBLIC
SERVICE COMMISSION.
  2. Any energy performance contract entered into by any agency or muni-
cipality  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, OR SOLAR POWER PURCHASE AGREEMENT 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 agen-
cy, municipality or public authority for the purpose for which such real
property was originally acquired or devoted or for which such real prop-
erty 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

S. 6949--A                          3

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.
  8.   In the case of a school district or a board of cooperative educa-
tional services, an energy performance contract shall be  developed  and
approved  pursuant  to  the requirements of this section and pursuant to
regulations promulgated by the commissioner 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; 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 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 perform-
ance contracts entered into prior to the effective date  of  such  regu-
lations,  nor shall they apply to energy performance contracts for which
a request for proposals was issued prior to such effective date.
  9. IN THE CASE OF A SCHOOL DISTRICT OR A BOARD OF  COOPERATIVE  EDUCA-
TIONAL SERVICES, A SOLAR POWER PURCHASE AGREEMENT SHALL BE DEVELOPED AND
APPROVED  PURSUANT TO THE REQUIREMENTS OF THIS SECTION. THE COMMISSIONER
OF EDUCATION IN CONSULTATION WITH THE NEW YORK STATE ENERGY RESEARCH AND
DEVELOPMENT AUTHORITY SHALL PROMULGATE SUCH REGULATIONS AS DETERMINED TO
BE NECESSARY TO REGULATE THE CONSTRUCTION, INSTALLATION AND  MAINTENANCE
OF  SOLAR  POWERED  ELECTRICITY  GENERATING  SYSTEMS OR EQUIPMENT AND TO
REQUIRE THAT ALL SOLAR POWER PURCHASE AGREEMENTS WHICH  CONTAIN  MAINTE-
NANCE  AND  MONITORING  CHARGES  STATE  SUCH  MAINTENANCE AND MONITORING
CHARGES SEPARATELY IN THE AGREEMENT IN A CLEAR AND  CONSPICUOUS  MANNER.
SUCH  REGULATIONS  SHALL  NOT  APPLY  TO SOLAR POWER PURCHASE AGREEMENTS
ENTERED INTO PRIOR TO THE EFFECTIVE DATE OF SUCH REGULATIONS, NOR  SHALL
THEY  APPLY  TO  SOLAR POWER PURCHASE AGREEMENTS FOR WHICH A REQUEST FOR
PROPOSALS WAS ISSUED PRIOR TO SUCH EFFECTIVE DATE.
  S 3. This act shall take effect immediately.

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