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State of the State

Governor Andrew Cuomo delivered his fourth annual State of the State address January 8th, kicking off the 2014 Legislative Session. This is an important election year for New York’s elected officials including Governor Cuomo who is seeking a second term.

Today’s speech outlined the achievements of Cuomo’s first term and set forth his policy agenda for the upcoming year.  The Governor will primarily focus on economic development which includes a plan to expedite the Energy Highway. The Public Service Commission’s (PSC) approval process will be shortened to ten (10) months for transmission projects built wholly within existing transmission corridors, or buried along existing State-owned rights of way.  

The Governor’s economic development agenda will also include the Tax Plan announced earlier this week which is based on the recommendations submitted by Cuomo’s Tax Relief Commission late last year. The Tax Plan would reduce the corporate tax rate to 6.5%, provide for a renter’s tax credit, and freeze real property taxes for households with an income of up to $200,000. Although not specifically referenced in the speech itself, a supplemental policy book was released which states the Governor’s intention to immediately repeal the 18-a surcharge for industrial customers and “accelerate” the repeal for all other customers (currently scheduled for 2017).

The supplemental policy book, which can be found here, also contains several items of interest that were not discussed in today’s speech. These items include a community solar proposal, state funding for microgrid projects, a biomass heating initiative, and the use of federal funds for hardening the electric system on Long Island.

Additional information and the Governor’s press release outlining his complete agenda can be found below.

As the next phase of NY-SUN, Community Solar NY will be established to reduce the cost of solar projects by encouraging the aggregation of customers. The initiative will include “K-Solar,” a program to provide incentives, financing, and technical assistance to school administrators interested in reducing energy costs through on-site solar installations. 

In addition, the New York State Energy Research & Development Authority (NYSERDA) and the New York Power Authority (NYPA) will work to use schools and other institutions as demonstration hubs for developing community-based aggregation models to “solarize” entire neighborhoods with increased purchasing power and lower installation costs. For example, NYPA could facilitate a solar project at a school, with NYSERDA providing a financial reward to the school for every surrounding home that also installs solar, thus incentivizing the school to rally the community around the benefits of clean energy.

The State will launch “NYPrize”, a $40 million competitive process to help build “community grids” for areas with approximately 40,000 residents each. NYSERDA and NYPA will award funding to communities throughout the State to help build more integrated and resilient energy networks, as well as establish the technological, operational, and business models.

The Public Service Commission (PSC) and the State will also work with utilities and private developers to reform regulatory and financial “hurdles” that prevent investment in microgrids. The goal is to develop at least 10 community grids and microgrids in 2014.

NY will launch Renewable Heat NY which is intended to help catalyze a sustainable, private sector-driven market for biomass heating derived from low-grade wood. In the first year, Renewable Heat NY will aim to raise consumer awareness and support the early stages of deployment such as workforce training, product development, etc.

In addition, through Governor Cuomo’s $800 million BuildSmart NY initiative, NYPA will finance up-front costs for advanced biomass heating systems in State and municipal buildings.

Renewable Heat NY will also work to develop long-term private sector financing to cover the up-front cost of these systems for buildings outside of the municipal sector. Financing “could” be made available through NYSERDA, the Green Bank, and/or commercial Property Assessed Clean Energy (PACE) programs. 

Energy Highway
The PSC will cut the timeframe for deciding permit applications from two (2) years to ten (10) months for transmission projects that are entirely within transmission rights of way or State-owned rights of way. The intent is to provide a financial incentive for development of transmission projects that respect community interests and can be quickly implemented through the use of existing rights of way and State-owned assets.

As part of the Tax Plan, the 18-a surcharge would be eliminated immediately for industrial customers and the phase-out would be accelerated for all others, providing $200 million in relief. The intent is to immediately improve the business climate for industrial customers where electric power is a significant cost of production.

Hardening Long Island’s Infrastructure
Federal funding will be used for hardening measures in the LIPA service territory such as elevating certain substations, strategically undergrounding overhead wires, expanding tree trimming practices, and installing a new outage management system. 

SUNY College of Emergency Preparedness, Homeland Security, and Cybersecurity
The SUNY College of Emergency Preparedness, Homeland Security and Cybersecurity will be the first civilian degree-granting college to integrate emergency preparedness, homeland security, and cybersecurity studies through interdisciplinary programs that involve law, public and international affairs, information technology, cyber engineering, critical infrastructure protection, and science. Former NYPD Commissioner Ray Kelly will serve in a special advisory role.

Weather Detection System
The State will create a state-of-the-art weather detection system with over 100 land-based stations across all counties to report real-time weather and environmental data to State agencies, allowing emergency management staff to better predict severity, deploy resources and provide up-to-date information during extreme weather events.


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