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NYS Legislature Concludes 2013 Legislative Session

The New York State Legislature concluded the 2013 regular legislative session in the early morning hours of Saturday, June 22, taking action on several energy-related initiatives, including a wide-sweeping and controversial plan to restructure the Long Island Power Authority (LIPA).
Before breaking for the summer, the legislature also approved a host of net metering changes and tax relief for out-of-state mutual assistance workers aiding in restoration efforts similar to Superstorm Sandy. These bills now go to the Governor for his approval or veto.

Several other energy-related initiatives failed to pass this year, including a large-scale solar net metering initiative by Mayor Bloomberg, a statewide solar mandate (the Governor’s “NY Sun Act”) and utility-specific prevailing wage mandates.

The state Senate also confirmed numerous appointments including  Audrey Zibelman as Commissioner of the PSC, Diane Burman as Commissioner of the PSC, Richard Kauffman as Chairman of the Board of the New York State Energy and Research Authority (NYSERDA), and Tom Prendergast as Chairman and CEO of the Metropolitan Transportation Authority (MTA).

The following is a more detailed summary of the legislature’s actions this year.

Passed Both Houses

Restructuring LIPAS.5844
In the wake of Superstorm Sandy, Governor Cuomo convened a Moreland Commission to investigate utilities’ responses to recent extreme weather events. The Moreland Commission concluded that LIPA needed to be overhauled. Cuomo initially proposed privatization but that was heavily criticized.  The agreement finally approved by the legislature gives PSE&G control over all things related to the operation and management of LIPA’s service territory including storm preparedness and response, infrastructure improvements, and energy efficiency initiatives. LIPA’s board will be reduced significantly but still exist to retain eligibility for FEMA assistance and tax benefits. LIPA will also refinance its existing debt at a lower interest rate.

LIPA’s board will have final approval on all of LIPA’s rate adjustments. A new office within the Department of Public Service, funded through 18-a, will be created to oversee operations, review storm preparedness plans, and undertake a rate review process for increases over 2.5% at LIPA and other Investor Owned Utilities (IOUs).

Additional highlights of the restructuring plan include:
      • A 2% cap on annual increases of payments in lieu-of-taxes (PILOT).
      • LIPA is directed to administer renewable energy and energy efficiency programs. This includes implementation of programs that were approved prior to the bill’s effective date. These provisions were included at the request of lawmakers who were concerned with the future of LIPA’s numerous renewable programs including a solar feed-in-tariff program.
      • LIPA is directed to determine whether repowering several “at-risk” power plants is in the best interest of its customers. If so, it will enter into a PILOT agreement for a term commensurate with any power purchase agreement. Lawmakers were concerned with the future of several facilities which account for a large portion of the local tax base.

The legislation does not address certain issues including LIPA’s pending tax challenges on four major power plants on Long Island. The outcome of the tax grievances could have a substantial impact on the local governments and school districts in which such plants are located. An agreement on this issue is reportedly being negotiated separate from the legislation.

Net Metering
Consistent with the recommendations set forth in Governor Cuomo’s 2100 Commission report released post-Sandy, there was significant focus by the legislature on distributed generation initiatives this session. Numerous net metering bills were introduced; the following were passed by both Houses:

“Light bulb in a Field” - S.4514: Prohibits a utility from placing any minimum load requirement on a host account as a pre-requisite to allowing remote net metering. This bill was introduced in response to an ongoing PSC proceeding in which Cornell University is seeking a declaratory ruling on minimum load requirements for remote net metering.  The sponsors contend that the remote net metering statute is silent on this issue thereby indicating that the original intent was to not place such a restriction.

Fuel Cell/Combined Heat & Power Remote Net metering – S.2382: Permits fuel cells and CHP to be remote net metered.  Advocates argue fuel cells provide the same benefits as other renewable technologies and should receive the same treatment. Con Edison and other utilities argued that fuel cells are not intermittent technologies like solar and wind.  The utilities opposed this bill and another proposal which would enable net metered fuel cell technologies to be credited at the retail rate on the basis that both expand costly subsidies borne by other non-net metering customers. A bill which changes the rate at which fuel cells are credited did not pass both Houses. Additional information can be found below.

PSC ComplaintsS.4925
Explicitly allows complaints about the duration of an electric or gas outage to be made to the PSC. The PSC is also directed to publish a complaint form on its website that addresses outage duration and enables groups of individuals and/or elected officials to file complaints. The sponsors argue that Superstorm Sandy highlighted the need to enhance the complaint filing process.

Mutual Assistance Tax ReliefS.5323
Provides that out-of-state businesses performing work during a disaster period shall not be subject to any licensing and registration requirements or be required to remit state and local taxes during that period. This includes unemployment insurance, income taxes, and other taxes related to equipment used during the disaster period. Con Edison issued a memo in support of this legislation noting the importance of eliminating barriers to the swift deployment of personnel to ensure prompt restoration of service.

Bills That Did Not Pass Both Houses:

Net Metering
NYC Solar Remote / Community Net MeteringS.5150
Mayor Bloomberg’s office gained sponsorship in both houses late in the session for a proposal to significantly expand solar remote net metering in New York City alone. Billed as necessary to facilitate a large solar project at Fresh Kills, the proposal is not limited to that site or to landfills in general.  It passed the Senate but did not move in the Assembly. 

Crediting Fuel Cells at Retail RateS.2383
This bill would provide for net metered fuel cells and micro CHP to be credited at the retail rate, which is the rate at which renewable technologies are credited. Currently, fuel cells are credited at an avoided cost. Con Edison opposed this bill and the aforementioned fuel cell remote net metering bill on the basis that fuel cells are fossil fueled resources not dependent on a weather-based resource.  The policy justification for allowing intermittent resources to get the full retail credit is that it maximizes the renewable energy input. There is no such policy reason to further subsidize a nonrenewable resource such as fuel cells. In addition, allowing a fuel cell to get full retail credit in a remote net metered structure could greatly increase the number of customers that do not contribute towards the upkeep of the electric system. Because of the large expense associated with fuel cell installation, large wealthy developers would typically benefit the most at the expense of all customers.

Net Metering CapS.2498
This bill raises the net metering cap from 3/10 of 1% to 2% for wind and from 1% to 5% for all other technologies. However, the sponsors are no longer pursuing this bill because the PSC recently increased the cap.

In January’s State of the State address, Governor Cuomo announced that funding would be increased to $150 million annually for solar deployment under his NY Sun Initiative, which uses existing funds to support the deployment of solar across the state. However, solar advocates had been pushing for a codification of this program and long-term assurances of the investment.  This approach has been widely viewed as an alternative to previous proposals which required IOUs to enter into long-term contracts for the purchase of solar renewable energy credits (SREC). Two similar but separate bills intended to codify the Governor’s NY Sun program were passed by the Senate and the Assembly. 

The Senate passed S.2522  which funds solar deployment in the state at a rate of $146 million annually through 2023. It also contains tax credits for solar and battery storage manufacturing.

The Assembly passed A.5060-D which more closely mirrors the Governor’s proposal. It allocates $150 million annually through 2023 but does not contain the tax credits.

Prevailing Wage
Con Edison strongly opposed both of the following bills which would impose prevailing wage mandates on contractors employed by utilities.  Both bills would result in significant new costs on businesses and utility customers.

“Service Worker”S.5338
This bill requires gas, steam, and electric utilities to pay prevailing wages to service workers employed by their contractors. It passed the Assembly but did not pass the Senate. 

“Street Cutter”S.1075
This bill requires all utility companies, or their contractors, to only use “competent workers skilled in the work required of them” and demonstrate that they will pay prevailing wage. This bill did not pass either House.

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