The New York Public Service Commission Modifies its Rule on Membership for Community Distributed Generation Projects.

The New York Public Service Commission recently issued an order modifying the Community Distributed Generation (CDG) membership requirements. As previously reported on our January 26, 2017 blog post, the order establishing a Community Distributed Generation (CDG) program stipulated a ten-member minimum for properties located on projects with multiple residential units as one of its requirements. The Petitioners argued that this requirement was in essence a barrier to the adoption of solar, and alienated members of the community that lived in multi-unit residential or mixed-use buildings with fewer than ten metered tenants from benefiting from the CDG program.

The Public Service Commission found in its ruling that, “removing the minimum ten membership requirement for on-site CDG installations on multi-unit housing is in the public interest.”

The Pace Energy and Climate Center supported the Petition to waive the ten-member minimum requirement, and highlighted the impediment issues the membership requirement would cause to the Community Distributed Generation (CDG) program.

Pace applauds the Public Service Commission for its decision, and we believe that this decision opens the gateway for low to moderate income households to have access to clean and affordable energy. Overall, this synthesizes with the vision of New York state in securing a sustainable future for all.

The new rule came into effect on April 1, 2017.

New York Public Service Commission “REVs” Up Utility Reform in Consolidated Edison Rate Case

New York Public Service Commission “REVs” Up Utility Reform in Consolidated Edison Rate Case

  • New York Public Service Commission adopted a three-year rate plan for Consolidated Edison, including several key Reforming the Energy Vision initiatives.
  • The Pace Energy and Climate Center and Earthjustice partnered on our fifth New York rate case and scored a number of REV wins, including on standby rate reforms, energy efficiency, and REV-aligned rate design.
  • This is the first “post-REV” rate case and is a significant milestone in New York’s path to grid modernization.

The New York Public Service Commission adopted a three-year rate plan for Consolidated Edison Company of New York on Tuesday, marking the first rate plan the Commission has approved following its landmark Order Adopting a Ratemaking and Utility Revenue Model Policy Framework (the “Track Two Order”), which laid the groundwork for many of the Reforming the Energy Vision’s key principles.

Earthjustice and the Pace Energy and Climate Center (“Pace”) partnered in the case and pushed for many of the REV-aligned reforms approved by the Commission. Several Pace staff and law student interns worked on the case along with staff attorneys from Earthjustice. Pace and Earthjustice played a key role in securing a number of wins for advancing fair rates, increasing deployment of energy efficiency, advancing climate responsibility, and growing markets for distributed energy resources (“DER”) such as energy efficiency, energy management, distributed generation, electric vehicles, and other technologies and services.

“Our partnership with Earthjustice enabled us to advance strategic objectives of just and reasonable rates for ConEd customers as well as substantial progress toward realizing the vision of the REV process for greater deployment of DER,” said Karl R. Rábago, Pace executive director and expert witness in the case.

The months-long settlement negotiations resulted in a Joint Proposal, filed on September 19, 2016, with more than 20 signatories, including Pace, the City of New York, Natural Resources Defense Council, Environmental Defense Fund, distributed generation and real estate developers, and others.

The rate case is a significant milestone in the ongoing REV process. As Commission Chair Audrey Zibelman noted prior to voting in support of the Joint Proposal, this case represents “a significant step toward modernizing the electric system and changing the utility business model.”

Five of Pace’s subject matter experts—Executive Director Karl Rábago, Deputy Director Tom Bourgeois, Senior Energy Policy Associate Dan Leonhardt, Energy and Climate Law Advisor Jordan Gerow, and Professor Michael Gerrard, Director of Columbia University’s Sabin Center for Climate Change Law—testified on a number of REV concepts, including much-needed standby rate reforms, developing metrics to measure AMI program performance, best practices for microgrid development, and innovative, REV-aligned cost allocation to capture the costs and benefits of Con Edison’s new role as distribution system platform provider.

Among the key REV “wins” approved by the Commission are:

  • Standby Reform: An overhaul of Con Ed’s standby rates, as required under the Track Two Order, including a revamped Reliability Credit with more stringent NOx emissions standards, and a Standby Rate Pilot that includes provisions to incentivize more efficient combined heat and power (CHP) units;
  • Energy Efficiency, System Peak Efficiency, and Electric Vehicles Programs: Con Edison’s proposed energy efficiency budgets and targets go beyond what the Company is currently required to achieve, and are projected to yield more than 300 gigawatt-hours of savings per year, equivalent to the energy needed to serve over 40,000 homes in New York State. The system efficiency program would add an additional 22 GWh of energy savings and provide 49 megawatts of system peak reduction. The energy and system peak efficiency programs also include proposed Earnings Adjustment Mechanisms—novel mechanisms established under the Track Two Order for utilities to generate new revenue streams and accomplish energy policy goals. These savings are especially important in light of the recently announced agreement to close the Indian Point nuclear plant.
  • Electric Vehicles: A collaborative process will be established to consider developing new rate structures, incentives or pilot programs for electric vehicles.
  • Climate Change Vulnerability Studies: The agreement, if adopted, would authorize the Company to spend up to $4 million on completing its Climate Change Vulnerability Study by 2019.
  • Advanced Metering Infrastructure (“AMI”) Metrics: Done right, AMI can help to grow DER and ancillary services markets, and empower customers to manage their home and business energy use. The Commission approved Con Ed’s AMI Business Plan earlier this year, and as the Company moves forward, its AMI program will be subject to ongoing measurement and assessment to ensure that the program is on the right track.
  • Rate design reforms: The proposed agreement inches Con Ed toward a more granular cost functionalization and allocation model, which is critical to helping the Company move from the one-way energy delivery and cost recovery of the past and toward its new role as distributed system platform provider.
  • The Commission also separately approved a related Targeted Demand Management program that will incentivize the Company to pursue “non-wires alternatives” projects, like the Brooklyn-Queens Demand Management project, thanks to a split incentive between customers and shareholders. Lessons learned in this program will be vital in addressing any supply gap created by the closure of Indian Point.

This is Earthjustice and Pace’s fifth partnership on a New York rate case, following the successful completion of settlement agreements in Central Hudson and Orange & Rockland Utilities’ 2014 rate cases, and Con Edison and New York State Electric and Gas / Rochester Gas & Electric’s 2015 rate cases.

Three other New York investor-owned utilities could file rate cases in 2017: National Grid, Orange & Rockland Utilities, and Central Hudson Gas and Electric.

Pace and Earthjustice look forward to tracking those filings and continuing to push for fair rates, clean energy and climate responsibility, and REV-aligned market reforms.

Earthjustice Associate Attorney Chinyere Osuala says: “In a time when President Trump’s clean energy goals are ambiguous at best, states are taking charge. New York is proving itself to be a leader in clean energy by modernizing the electric grid. This rate plan advances that vision for New York City and Westchester residents and their families.”

New York’s Community Distributed Generation Ten-Member Minimum Eligibility is Counteractive in Achieving its Objectives

New York’s Community Distributed Generation Ten-Member Minimum Eligibility is Counteractive in Achieving its Objectives

New York’s Community Distributed Generation (CDG) program is a promising resource in the toolbox for helping low- and moderate-income customers tap into renewable energy, but the program has some limitations. In its present form, residential CDG projects must have a minimum of ten members in order to qualify under the program, which leaves out many New York buildings with fewer than ten units.

The New York Public Service Commission on July 17, 2015, issued an order establishing a Community Distributed Generation (CDG) program. The order allows, by use of net metering, customers who do not have renewable energy generators on their own property to participate directly in off-site projects. For low-income customers, apartment-dwellers, and renters whom may not be able to install solar on their own homes, the initiative allows them to benefit in shared solar projects hence providing a more affordable and clean energy option.

Besides having the requirement of at least 10 members and each member being allocated at least 1,000kWh per year, CDG projects must also:

(1)    be a net metered generation facility located behind a host meter and interconnected to a major electric distribution, and utility;

(2)    have a project sponsor who is responsible for: operating and maintaining the project; development of the project; managing the customers and subscription of new customers, and coordinate with the utility to provide customer information and allocate customer credits.

The CDG program is empowering local communities to use clean energy which overall is a more economical and an environmental friendly option. While the program is a very positive step in the right direction, there is still room for improvement. The City of New York, Solar One, GRID Alternatives, Natural Resources Defense Council, The Association for Energy Affordability, and Environmental Defense Fund on September 1st, 2016 filed a petition to waive the current ten-member minimum for Community Distributed Generation projects located on projects with multiple residential units.  The Petitioners take issue that, with “recent changes in the solar market and technological advances in project design,” the ten-member minimum is a barrier to the adoption of solar. On-site deployment installations are “more viable because of concurrent design innovations that allow city buildings to minimize limits to allowable rooftop solar capacity brought about by compliance with local fire and building codes.” Ultimately, waiving the ten minimum membership would increase low and moderate income customers’ access to solar energy.

Further, the Petitioners argue that the membership requirement is tailored for larger buildings and denies CDG benefits to many multi-unit residential or mixed-use buildings with fewer than ten metered tenants, smaller households, and the Housing Development Fund Corporations (HDFCs). Article XI of the Private Housing Finance Law (PHFL) makes provision for affordable homeownership and housing options to households fewer than ten through HDFCs.

The Pace Energy and Climate Center supports the Petition to waive the ten-member minimum requirement. The benefits of Community Distributed Generation are manifold. It makes clean distributed generation accessible to electric customers who, due to financial and property related reasons, are not capable of supporting traditional onsite generation. Additionally, for low and moderate income households that rent their homes and physically cannot support onsite generation, it offers a pathway for these households to control their energy future and participate in the clean energy economy being fostered by New York State. Pace strongly believes that waiving the 10-member minimum requirement for properties with multiple residential units will serve to help New York State to meet its ambitious clean energy goals set forth in innovative programs and initiatives including the Clean Energy Standard (CES), Reforming the Energy Vision (REV), and NY-Sun Program.

The CDG program is by design progressive and should be lauded for its ingenuity in the renewable energy sector. However, to achieve its objective of expanding the opportunities to purchase and share solar, the membership minimum requirement should be modified to apply to at least three members. This will encompass more communities living in New York state whether in larger buildings or smaller multi-family buildings and would additionally tap into high-density urban areas where transmission and distribution constraints are greatest.

New York Closes the Regulatory Gap on Small Distributed Generators

New York Closes the Regulatory Gap on Small Distributed Generators

New York State recently adopted long-awaited air pollution regulations aimed at small distributed generators. The emissions rules, found in Part 222 of Title 6 of the New York Code of Rules and Regulations (commonly known as “Part 222”), will help to reduce the negative health impacts of nitrous oxide (NOx) and particulate matter (PM) emissions, and will cover small generators that were previously unregulated thanks to a “regulatory gap” in the existing air pollution rules.

Pace participated throughout the regulatory process and filed comments on the proposed rules with our partners in the Clean Energy Organizations Collaborative. Part 222 was championed by Governor Cuomo and represents an important step forward in New York’s effort to mitigate the harmful effects of air pollution.
Generators with a maximum mechanical output rating of 200 horsepower or greater in the New York City Metropolitan Area (NYMA), and 400 horsepower or greater in the rest of the state are covered by the new rules. The more stringent application in NYMA reflects downstate New York’s greater population density, where more people are at risk of asthma and other health conditions caused, or exacerbated, by air pollution, and where low-income residents already face some of the state’s worst air quality.
Part 222 is especially timely in light of New York’s Reforming the Energy Vision proceeding, which is expected to encourage customers to manage their energy usage through a variety of “distributed energy resources,” including the types of diesel-fired generators covered by the rules.
The rules enter into effect in 2017.
UN Environment Guide for Energy Efficiency and Renewable Energy Laws

UN Environment Guide for Energy Efficiency and Renewable Energy Laws

Richard Ottinger, Karl Rabago, John Bowie and a greater team contributed to the recently completed the UN Environemtnal Guide for Energy Efficiency and Renewable Energy laws. It was written to assist the many countries, communities and companies responding with proposed sustainable energy initiatives to meet their commitments under the Paris Climate Change Agreement and the UN Sustainable Development Goals.  Published by the United Nations Environment Program, it is written in response to needs expressed by energy efficiency and renewable energy project initiators, government officials, energy managers, developers, funders and particularly developing country energy legal draftsmen, asking for assistance in drafting needed legislation.

The Guide uniquely describes the laws applicable to every kind of efficiency and renewable energy measure, and those to prevent failures and fraud. It includes case studies evaluating the laws from several developing countries and a CDC providing the full text of laws adopted by many others.

To read the guide in full click here.