S T A T E O F N E W Y O R K
________________________________________________________________________
8586
2017-2018 Regular Sessions
I N A S S E M B L Y
July 10, 2017
___________
Introduced by M. of A. PAULIN -- read once and referred to the Committee
on Corporations, Authorities and Commissions
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
is necessary. Public utilities and other market participants have not
been given the market signals necessary to aggressively reduce energy
usage.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13281-01-7
A. 8586 2
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.
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
A. 8586 3
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-o to
read as follows:
§ 66-O. 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 EIGHTEEN TO TWO THOUSAND TWEN-
TY-ONE 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-TWO 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
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.
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§ 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.