The Good News and the Better News with the Power NY Act of 2011

Seal of New York.

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Governor Andrew Cuomo signed The Power NY Act of 2011 (A. 8510/S. 5844) (PNY Act).  The bill was passed June 22, 2011.  On balance the law seeks to achieve three important public purposes:

  1. It revives expired Article X of the Public Service law which integrated and streamlined the permitting and siting process for power generation facilities of all types preempting the local death of a thousand extortions that frustrates so many developers.  New York’s planning and environmental review process is onerous and the revised law allows projects of 25 MW or larger to work through this expedited process instead of the 80MW in the former law.
  2. Utility Bill Financing Mechanism for Energy Efficiency.  Getting customers to make energy efficiency improvements always faces hurdles in the upfront cost of doing so.   The PACE program that was killed off by Fannie Mae and Freddie Mac allowed cities to levy assessments to pay for energy efficiency in fear that repayment of the assessment would be senior to the first mortgage as are other local assessments for sewer, water and other public improvements. But the goal of the PACE program has been repurposed in the new Power NY Act of 2011 by authorizing on-bill recovery.  This provision allows both residential and nonresidential customers to take out loans to make energy efficiency improvements and pay for them over time on their utility bills.
  3. NYSERDA Study of Ways to Achieve 5,000 Mw of Solar by 2025.  The new law authorizes a study by New York State Energy Research and Development Agency (NYSERDA) to analyze administrative and policy options needed to increase solar energy by 2,500 MW by 2020 and 5,000 MW by 2025. The study will assess the per-megawatt cost to realize the goals and the economic, job creation and environmental benefits expected. NYSERDA is to report the findings and recommendations of the study to the Governor and the Legislature no later than January 31, 2012. (PNY Act § 22).

There is much to like in this new law and New York is showing other states the way forward to accelerate their clean energy goals in several important ways.  Both the wind and solar industry trade groups have complained for years of the duplicative, cumbersome and costly permitting and review process.  There is some irony that many of these rules were developed by the same environmental advocates who used them successfully to slow down and kill fossil energy projects.  Streamlining the energy permitting process is a good policy objective but it should be extended to all energy permitting not just the politically correct projects.

Reducing the threshold for fast track streamlined permitting to 25 MW is better than the previous 80 MW but it still may be too high a hurdle to pick up microgrid and other small scale projects that are logically part of a growing distributed energy resources approach to energy management.  If we really want business to invest in clean energy projects the law should sweep up a larger share of the commercial and industrial projects likely to be effected.

Gary L Hunt

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Gary Hunt is a global business executive with 20+ years experience as a “C’ level trusted adviser on corporate strategy, M&A, and recurring revenue business model strategies.

His focus is information technology and energy vertical “sweet spots” where IT and OT converge to offer scalable growth opportunities to leverage data and analytics into advanced predictive analytics solutions using recurring revenue business models.

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