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Issues

State of the State Overview

Governor Cuomo’s State of the State

On January 9, 2013, Governor Andrew Cuomo delivered his annual State of the State address which outlined his long and short-term policy agenda. This was the third address of the democratic Governor’s term and focused on Hurricane Sandy-related initiatives such as utility hardening, enhancing the Public Service Commission’s (PSC) authority, privatizing LIPA, increasing alternative local renewable power sources, and lowering the RGGI cap to use some of the proceeds to fund such initiatives. Cuomo also called upon Congress to pass the remaining Hurricane Sandy funding bills which would provide New York with $30 billion in federal aid.

Additionally, Cuomo announced the creation of a green bank to support clean technology investments, an extension of the NY-SUN Initiative, the creation of an Energy Czar, and the deployment of electric cars.

Other policy initiatives that received significant attention were gun control legislation, increasing the minimum wage, education, and campaign finance reform.

To supplement his speech, Cuomo also released a policy book providing additional information regarding the initiatives announced in today’s speech, as well as other initiatives not referenced. The book can be found here.

Hurricane Sandy

The Governor adopted numerous recommendations set forth by the Moreland Commission and several other commissions he established after Hurricane Sandy to study ways in which New York can better prepare for, and respond to, disasters.

Strengthening the PSC

The Moreland Commission recommended that the PSC’s oversight of New York’s utilities be strengthened.  Cuomo echoed those sentiments and called for the following: (1) increase penalties (to be paid out of Shareholder capital) for violations of PSC orders and regulations or upon a finding that a utility failed to provide safe and adequate service under a “reasonable business” standard; (2) direct utilities to comply with recommendations made pursuant to management and operations audits; (3) recommence operational audits at least every 5 years; (4) consideration be given to creating a dedicated auditing unit and an enforcement unit; (5) consideration be given to explicitly authorizing the PSC to formally review the performance of each Investor Owned Utility (IOU) and order divestiture of a utility’s assets; (6) explicit authority to revoke a Certificate of Public Convenience and Necessity; (7) increase DPS personnel; (8) consideration be given to requiring senior officers of each utility to annually certify that the utility is complying with all applicable laws, rules, and regulations; (9) require all PSC appointments to have demonstrated competence in some aspect of utility regulation; and (10) unify NYSERDA and DPS staff functions to coordinate energy policy administration.

Hardening our Utilities

The PSC will require utilities to submit plans for the following: (1) strengthening substations against flooding (raised walls, elevated equipment, relocation if necessary); (2) reconfiguring network boundaries to separate flood areas from non-flood areas to limit the impact of flooding to a much smaller area; (3) elevating critical distribution transformer installations to protect against flooding ; (4) replacing the most critical distribution wood poles with steel poles to limit the risk of damage; (5) installing state-of-the-art, remote condition monitoring equipment to allow real-time monitoring of lines without manual inspection; (6) identify the best locations for undergrounding critical infrastructure or most vulnerable lines; (7) and accelerate pipeline replacement programs in flood prone areas and to evaluate their infrastructure and prepare plans for strengthening critical systems. Additionally, the PSC, NYISO, other regional electric entities, and utilities will work to create a long-term stock of critical equipment by the end of 2013 that is shared and leaves utility companies less exposed to supply bottlenecks, spare parts shortages, and updates in equipment every five years. 

LIPA

Consistent with the Moreland Commission’s recommendations, Cuomo set forth a plan to privatize LIPA which would sell LIPA’s assets to an IOU, provide for a rate freeze, and subject the utility to PSC regulation.

Increase Alternative Local Renewable Power Sources

New York will immediately invest in new construction, replacement, and upgrades to transition the grid to a flexible system that can incorporate and respond to future technologies and clean energy integration, and which minimizes outages during major storms and events. This will include: (1) requiring utilities to accelerate their investments in smart grid technologies across the state; (2) expanding incentive programs administered by NYSERDA to install distributed energy systems particularly for critical infrastructure (e.g., hospitals); (4) identifying and resolving barriers that are discouraging microgrid development; (5) aiding electric vehicle deployment through the promotion of charging installations, consumer incentives and education, and regulatory reform; and (6) designing rate structures to reflect real-time energy costs, reducing mandatory hourly pricing thresholds, simplifying the interconnection process for energy storage systems, and modifying standby-charges to encourage energy storage and distributed generation.

Lower the Regional Greenhouse Gas Emissions Cap

Reducing the cap will provide an additional $100 to 150 million to invest in repowering existing inefficient power plants to reduce carbon emissions and assisting communities that lose a big part of their tax base when coal-fired power plants are retired. A portion of those auction proceeds will be used to strengthen natural infrastructure and to better prepare New York for storm events like Sandy.

Harden our Fuel Delivery System

Require gas stations in strategic locations to have back-up power capacity, create a Strategic Fuel Reserve, establish new pump stations along the Buckeye pipeline, and have NYSERDA assess the need for hardening measures at fuel delivery terminals in the region.   

Improve the Resilience of Our Buildings

Update the State Building Code to promote smarter, resilient building performance and increased survivability. These changes would impact all municipalities (Westchester, Orange, Rockland) except New York City which has its own building and fire prevention codes.

Take Immediate Steps to Protect Transportation Systems Against Future Storm Events

With federal assistance, measures will be taken by the MTA and other State agencies and authorities to harden the transportation systems such as: (1) harden or elevate communication and electrical power infrastructure that services port facilities; (2)flood-proof subways and bus depots with vertical roll-down doors, vent closures, inflatable bladders, and upsized fixed pumps (with back-up power sources); and (3) elevated or submersible pump control panels, pump feeders, and tide gates to address flooding at vulnerable airports.

Communicating with New Yorkers in an Emergency

Develop a program that will allow mass text messages to be sent to all wireless phones in a chosen area. In addition, the State will explore a disaster recovery communications hub integrating social networking tools. As part of the hub, a website would provide an online real-time mapping tool in order to provide information on service outages; up-to-the-minute information on emergency resources available in a given area; disaster preparedness tips and resources for the general public; and, following a disaster, an easy-to-use resource for finding and requesting financial and other assistance.

Specialized Training for the National Guard for Emergency Response

Provide specialized training in key emergency response areas like power restoration, search-and-rescue, heavy equipment operation, crowd management and public safety.

Establish a “Civilian Emergency Response Corps”

Consisting of technical and trades personnel—including electricians, pipefitters, line workers, landscapers, public works personnel, civil engineers and debris removal tradespeople—who can be trained, certified, credentialed and deployed to perform disaster response and recovery related tasks.

Establish a World-Class Emergency Response Network

Creation of a statewide network of unified emergency training, coordination, protocols and communication which will include: (1) universal protocols; (2) training and certification for county and local emergency personnel using protocols; and (3) state coordination of local emergency decisions. In addition, a Statewide Emergency Stockpile will be created to store supplies including transformers and generators.

Ensure that Vulnerable Populations Can Receive Help in an Emergency

Expand the use of Vulnerable Population databases so first responders, outreach workers, and healthcare and human services personnel can find and serve those who may need assistance.

Ensure that Healthcare Facilities are Resilient

Laws and regulations must be updated to consider location and infrastructure vulnerabilities, along with vulnerability to changing climate conditions, in the process for approving new and substantial expansion of healthcare facilities.
 

Other Energy Initiatives

Green Bank

Create a $1 billion Green Bank to leverage public dollars (EEPS, RPS, SBC) with a private sector match to spur the clean tech economy. The NY Green Bank staff would also serve a coordinating role to enhance the collective strength of all State clean energy programs, including those outside their immediate purview.

Extend the NY-Sun Solar Jobs Program

Extend the NY-Sun program through 2023 at the existing annual funding levels established under the program. The long-term solar jobs program will be funded at $150 million annually for ten years to increase solar panel installations for homes and businesses. Program incentives will take into consideration a number of key features: (1) programs will need to attract a diversity of project sizes, which will in turn support a diverse set of residential and commercial customers and a diverse set of large and small solar businesses; (2) incentive structures will take into account the value of solar photovoltaic systems that are assembled in New York State to encourage installers to support in-state suppliers; and (3) the programs will take into consideration areas of the grid that could benefit the most from distributed solar generation (e.g., areas where improvements to local transmission and distribution systems could be avoided or delayed by solar installations).

Create a Cabinet-Level Energy Czar

Richard Kauffman will serve as Chairman for Energy Policy and Finance for New York State. Kauffman will direct the state’s energy policy through a newly-formed energy subcabinet which will develop the newly-proposed NY Green Bank. Kauffman has worked as a senior advisor to the nation’s Secretary of Energy Steven Chu and as Chief Executive Officer of Good Energies, Inc. 

Create the Charge NY Plan

The Governor’s proposed initiative calls for $50 million spent over five years, including funding from the NYPA, NYSERDA, and tax credits to create a statewide network of 3,000 public and workplace charging stations, and funding primarily from investor-owned utilities for incentives for Plug-in Electric Vehicle deployment.

 

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