S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6771--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               June 16, 2017
                                ___________
 
 Introduced  by Sen. CARLUCCI -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules  --  recommitted  to
   the  Committee  on  Energy  and  Telecommunications in accordance with
   Senate Rule 6, sec. 8 -- committee discharged, bill  amended,  ordered
   reprinted as amended and recommitted to said committee

 AN ACT to amend the public service law, in relation to the state's elec-
   tric system energy efficiency framework
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "New York Electric Efficiency Jobs Act".
   § 2. Legislative findings and intent. The legislature hereby finds and
 determines:
   1.  New  York  has  long  held  a  leadership role among the states in
 achieving efficiency savings in its electricity sector. Yet, its current
 electric energy efficiency achievements are inadequate to  generate  the
 amount  of  savings  necessary  to  achieve the state's clean energy and
 climate goals in as cost-effective a manner as possible, to  reduce  the
 cost  of energy for the state's energy customers. New York's most recent
 state energy plan calls for the achievement of several  goals  by  2030,
 including  a  twenty-three  percent  decrease in energy consumption from
 buildings, fifty percent renewable  energy  supply,  and  forty  percent
 reduction of greenhouse gas emissions from 1990 levels. If New York does
 not  significantly  increase  the  amount of savings it achieves through
 electric energy efficiency, reaching these goals will  be  significantly
 more  difficult, if not impossible. As the Public Service Commission has
 recognized, energy efficiency "is the cheapest and most effective manner
 to reduce carbon emissions in the energy sector." It also reduces  over-
 all capacity charges and helps avoid the need for costly utility infras-
 tructure upgrades. In other words, New York's current underinvestment in
 energy  efficiency  results in higher utility bills for New Yorkers than
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD13149-03-8

 S. 6771--A                          2
 
 is necessary. Public utilities and other market  participants  have  not
 been  given  the  market signals necessary to aggressively reduce energy
 usage.
   2.   Energy  efficiency  investment  creates  clean  energy  jobs,  as
 evidenced by  the  2017  United  States  Energy  and  Employment  Report
 published  by  the  United States Department of Energy, which shows that
 New York's energy efficiency market has generated 110,582  energy  effi-
 ciency  jobs  across the state. The number represents 5.1 percent of all
 energy efficiency jobs nationwide. Most energy efficiency  jobs  in  New
 York  state  are  found  in  energy  star  and efficient lighting firms,
 followed by high efficiency heating, ventilation, and  air  conditioning
 services.
   3.  Demonstrating  leadership  with  respect to energy efficiency will
 drive even greater clean energy job growth  in  the  state,  helping  to
 reverse recent trends of workforce reductions seen in many of New York's
 communities,  and increase the competitiveness of the state, by not only
 increasing job opportunities for electricians,  engineers  and  contrac-
 tors,  but also reducing the overall energy costs in the state, bringing
 down the cost of living and the cost of doing  business  and  generating
 economic  activity across the state. The United States economy has grown
 significantly since 2007, even while electricity  consumption  has  been
 flat,  in large part attributable to energy efficiency gains.  According
 to Bloomberg New Energy Finance, "the  key  policy  story  of  the  past
 decade  has  been  the uptake of EERS (Energy Efficiency Resource Stand-
 ards) in the U.S. state targets," leading  to  increased  investment  in
 efficiency and job growth.
   4.  Cost-effective  energy  efficiency  investment directly results in
 lower electricity use and lower  electricity  bills,  and  also  reduces
 total  statewide  energy  demand,  peak  demand, and distribution system
 investment needs. Thus, a well-deployed energy efficiency  program  will
 provide  worthwhile  benefits to both the individual bill payers partic-
 ipating in it and collectively to all bill payers.
   5. Under the current system, New York is achieving significantly lower
 amounts of annual incremental savings through energy efficiency than the
 amounts being achieved in other states.  The  American  Council  for  an
 Energy-Efficient  Economy estimates that New York achieved only approxi-
 mately 1.05 percent annual incremental savings in 2015, as  compared  to
 annual incremental savings of 2.91 percent in Rhode Island, 2.74 percent
 in  Massachusetts, 2.01 percent in Vermont, and 1.95 percent in Califor-
 nia (which recently set  a  goal  of  four  percent  annual  incremental
 savings).  The  Clean Energy Standard Order issued by the Public Service
 Commission on August 1, 2016, estimated the amount  of  new  incremental
 renewable  energy  required  to  meet its fifty percent renewable energy
 supply target by assuming 1.4 percent annual incremental savings through
 energy efficiency. Should the state continue on its  current  trajectory
 and  thus  fail  to achieve the Clean Energy Standard's assumed level of
 savings, far more renewable energy will be required to meet the  state's
 2030  goal  than the amount currently being planned for. In other words,
 the state is falling behind the trajectory of combined energy efficiency
 and renewable energy needed to achieve the 50 by '30 target,  which  may
 become difficult or impossible to achieve, or significantly more costly,
 if  the  state's  energy  efficiency framework is not adjusted soon. New
 York has the ability to achieve its laudable State  Energy  Plan  goals,
 but  only  if  the  current  energy efficient framework is redesigned to
 capture more of the state's energy efficiency potential.

 S. 6771--A                          3
 
   6. The Public Service Commission has  expressed  conviction  regarding
 the  vital  importance of energy efficiency in its "Reforming the Energy
 Vision" (REV) proceeding and has taken steps to advance energy efficien-
 cy through the work of the Clean Energy Advisory Council. However,  more
 is needed. REV does not yet have any mechanism to fund energy efficiency
 procurement or catalyze the private sector to invest significant capital
 in  energy  saving  measures. Effective and appropriate economic signals
 have not been provided consistently to all the  utilities  or  to  other
 parties to pursue all cost-effective efficiency measures.
   7.  It is imperative that New York provide leadership to the nation on
 energy efficiency, not only to protect New Yorkers and lower electricity
 bills, but to respond to the  serious  threatened  rollback  of  bedrock
 energy  efficiency  programs  at  the  federal level, including the Home
 Energy Assistance Program, the Weatherization  Assistance  Program,  and
 energy star. This leadership will provide critical assistance to low-in-
 come  customers  and providers of affordable housing while also enabling
 energy management solutions for all types of customers and  providing  a
 broad range of benefits to all income levels.
   8. Accordingly, the overlying intent of this act is to provide a clear
 regulatory framework for energy efficiency to better serve the constitu-
 ency of New York state and as a model for other states. This legislation
 will  help invigorate the market for energy investments foreseen by REV,
 incent significantly greater amounts of private capital to  be  invested
 in energy efficiency, thereby supporting job growth, increasing electric
 grid efficiency, reducing emissions, and lowering customers' bills.
   § 3. The public service law is amended by adding a new section 66-p to
 read as follows:
   §  66-P.    NEW  YORK  ENERGY EFFICIENCY DEVELOPMENT PROGRAM.   1. FOR
 PURPOSES OF THIS SECTION "COST-EFFECTIVE" SHALL MEAN GENERATING BENEFITS
 THAT OUTWEIGH COST, INCLUDING, BUT NOT LIMITED TO,  GENERATING  MORE  IN
 ELECTRICITY  COST SAVINGS AND OTHER BENEFITS THAN COSTS OVER A SPECIFIED
 PERIOD OF TIME, AS DETERMINED BY THE COMMISSION.
   2. NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE CONTRARY, INCLUD-
 ING, BUT NOT LIMITED TO,  ANY  ORDER,  RULE  OR  REGULATION  PROMULGATED
 PURSUANT  TO  THIS CHAPTER, THE PUBLIC AUTHORITIES LAW, AND/OR THE STATE
 ADMINISTRATIVE PROCEDURE ACT, THE COMMISSION, IN CONSULTATION  WITH  THE
 NEW  YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY, SHALL ADOPT A
 PROGRAM WITHIN ONE HUNDRED TWENTY DAYS OF THE  EFFECTIVE  DATE  OF  THIS
 SECTION. THE PROGRAM SHALL:
   (A)  ESTABLISH A ROBUST ANNUAL INCREMENTAL MINIMUM SAVINGS MANDATE FOR
 EACH UTILITY FOR THE YEARS TWO THOUSAND NINETEEN TO TWO  THOUSAND  TWEN-
 TY-TWO  THAT PROVIDES FOR ANNUAL INCREMENTAL INCREASES IN ENERGY SAVINGS
 OF AT LEAST 0.4 PERCENT OF TOTAL ELECTRICITY LOAD SERVED BY THAT UTILITY
 UNTIL AT LEAST TWO PERCENT MINIMUM ANNUAL SAVINGS IS ACHIEVED;
   (B) STUDY, IDENTIFY, AND ESTABLISH APPROPRIATE LONG-TERM ANNUAL, BIEN-
 NIAL, OR TRIENNIAL INCREMENTAL TARGETS THAT ACHIEVE  ALL  COST-EFFECTIVE
 ELECTRIC ENERGY EFFICIENCY SAVINGS LEVELS FOR EACH UTILITY FOR THE YEARS
 TWO THOUSAND TWENTY-THREE TO TWO THOUSAND THIRTY, WHICH SHALL BE UPDATED
 EVERY  THREE  YEARS  TO ALLOW FOR NECESSARY ADJUSTMENTS IN SUCH TARGETS;
 AND
   (C) PROVIDE A CLEAR AND  CONSISTENT  FUNDING  FRAMEWORK  FOR  ELECTRIC
 ENERGY  EFFICIENCY  THAT APPLIES TO ALL THE STATE'S UTILITIES AND ALLOWS
 THEM TO: MAKE INVESTMENTS IN ELECTRIC  ENERGY  EFFICIENCY  AS  A  SYSTEM
 RESOURCE;  EARN  INCENTIVES  FOR  SIGNIFICANT  SAVINGS  ACHIEVEMENTS, AS
 PRESCRIBED IN THE COMMISSION'S ORDER ADOPTING A RATEMAKING  AND  UTILITY
 REVENUE  MODEL  POLICY  FRAMEWORK  DATED  MAY  NINETEENTH,  TWO THOUSAND

 S. 6771--A                          4
 
 SIXTEEN; AND, CATALYZE PRIVATE  MARKET  INVESTMENT  IN  ELECTRIC  ENERGY
 EFFICIENCY.  THE  FUNDING  FRAMEWORK MUST ALLOW UTILITIES TO RECOVER THE
 COSTS OF MEETING THE MINIMUM MANDATES SET FORTH IN PARAGRAPH (A) OF THIS
 SUBDIVISION.
   §  4.  Severability  clause.  If any provision of this act is, for any
 reason, declared unconstitutional or invalid, in whole or  in  part,  by
 any court of competent jurisdiction, such portion shall be deemed sever-
 able,  and  such  unconstitutionality or invalidity shall not affect the
 validity of the  remaining  provisions  of  this  act,  which  remaining
 provisions shall continue in full force and effect.
   § 5. This act shall take effect immediately.