New York State is continuing to move forward to bring distributed energy resources such as PV solar, wind, battery storage and energy efficiency into the forefront of its energy mix. New York is taking a decidedly different energy path than its neighbor Pennsylvania, as recent events are now showing. This past December New York Gov. Andrew Cuomo formally banned hydraulic fracking from the state’s shale formations to the approval of some and the outright anger of others. At the same time the state is significantly expanding the resources of its main energy entity, the New York State Energy Research and Development Authority (NYSERDA). State public utility regulators have set in motion a significant policy and regulatory overhaul of its electric utilities business models under a program called Reforming the Energy Vision (REV). With this energy officials have directed electric utilities operating within the state to provide proposals as to how they will offer and/or expand their Demand Response incentive programs to help manage peak demand on the state’s utility grid during peak summer time air conditioning demand. The state has created a market-driven green energy financial institution called Green Bank and expansion of PACE property tax financing for those who want to install energy saving measures in their properties through its’ new EnergizeNY Program. These measure combine with New York’s continuing support of its Rochester based New York Battery Energy & Storage Technology (NYBEST) consortium.
New York the biggest state to date to ban hydraulic fracking
The Cuomo administration’s decision in December 2014 to formally ban hydraulic fracking throughout the state is significant. The decision to not move forward with the shale gas industry is a first for a major state with a potential to produce some level of natural gas from its shale formations. It comes as its cross border neighbor Pennsylvania has become, for the moment, the largest single producer of natural gas in the country. Pennsylvania has seen its politics and business development dominated by the shale gas industry since on or about 2009. Yet unlike Pennsylvania officials who at times where overwhelmed by the industry, New York officials took the previously unheard of position by a state government that it is the oil and gas industry who must be able to demonstrate to New York that their operations pose no long term safety threat to New York state residents. This is a difficult challenge for the shale gas industry as it has taken the position that the chemicals in its fracking solutions as used by individual drilling companies are considered to be, “trade secrets”.
Playing a role in Gov. Cuomo’s officials decision is the fact the New York Western Catskills watersheds which are part of an upstate water delivery and reservoirs providing drinking water to millions in downstate New York are within less than 100 miles of hydraulic fracking operations in Pennsylvania. Fracking operations, had they been allowed, would have brought drilling closer to these New York watersheds. Stakeholders in New York also brought into play the value of state’s tourism, organic food and regional state wine industries. Several independent petroleum geologists such as Arthur Berman detailed less than optimal technically recoverable shale gas in its portion of the Marcellus shale formation. In June 2012 New York’s Attorney General forced Chesapeake Energy to settle claims with more than 4,400 state landowners who the company claimed it had to right to extend the landowners leasing agreements without the agreement of the landowners. This was part of an ongoing pattern of very aggressive and often hardball tactics by the shale gas industry occurring over in Pennsylvania which became a growing concern to New York State officials when it came to dealing with the industry.
New York begins expanding and increasing its clean energy focus
With much attention focused on if the Cuomo administration would or would not ban hydraulic fracking after a multi-year drilling moratorium had been put in place, the state began an aggressive drive to expand, overhaul and increase the scope of its efforts to drive more clean and alternative energy to the forefront of its energy mix. The main state energy entity for clean energy development, NYSERDA, which stands for New York State Energy Research & Development Authority, is expanding its program offering as Gov. Cuomo has proposed a $40 million dollar increase for reductions in energy use and the creation of clean energy jobs in the southern tier and interior of the state outside of Metro New York. NYSERDA’s successful NY-Sun Program, among other achievements, has just recorded its 10,000 solar installation on Long Island among other things.
In July 2014, the state’s Public Utility Commission enacted a policy review called, Reforming the Energy Vision (REV) with the objective of making major changes to its electric utilities and their traditional business model. The overhaul is intended to provide more energy choice while allowing increased customer control over their monthly electric bills. The REV initiative, headed by New York Commissioner Audrey Zibelman, includes policy planning and requests for proposals to insure over time that more electricity comes from market side while at the same time, less electricity demand occurs during peak time periods. Under these changes the goal is to relieve, to a meaningful degree, the need for electric utilities to constantly be required to build more and more costly infrastructure. REV is in part the result of the severe electrical grid infrastructure damage done to the New York area by Superstorm Sandy and the realization of how vulnerable so many vast parts of the electricity grid there are.
Demand response programs to grow
State energy officials have an increased focus on expanding the offering and participation of electric utility Demand Response financial incentives. Under these programs, commercial accounts sign up to receive financial incentives to safely disconnect from the electric grid during periods of peak electricity demand, rely on their own Distributed Energy Resource including energy conservation for short periods of time and then safely reconnect to the electric grid. The best known Demand Response financial incentive program in the state currently is offered by Con Edison which among other incentives offers up to $2100 per kW for the installation of equipment like battery storage systems to allow a customer to draw electricity from their battery bank in order to relieve demand on Con Edison, most typically in the summer months.
Market driven financing process now emerging
New York is now taking steps to further mainstream alternative and renewable energy technologies among state residents and businesses. It recently established one of the first banking entities, Green Bank an operating entity of NYSERDA to focus on bridging the gap between clean energy project developers, equipment manufacturers and third party private market financial entities when it comes to installing a range of distributed energy resources. Located in Manhattan, Green Bank uses an open rolling request for proposal process for determining and evaluating a wide variety clean and renewable energy technology eligible installation projects. The bank seeks to participate in market rate return projects as renewable technologies continue to mainstream.
These actions by New York legislators and energy officials combine with yet another new program to enable property owners to install energy efficiency and generation measures. EnergizeNY , located in Yorktown Heights, NY is a program designed to expand the number of local municipalities who will accept PACE financing for the installation of energy saving measures. Under PACE, the cost of equipment and installation of systems such as solar and energy efficiency are added to the property tax on the structure, carried for up to 20 years and transferable when the property is sold. It is the creditworthiness of the property and not its owner which determines if PACE financing is available for a given property.
NY State continues its focus on breakthrough battery and battery storage technologies
In addition the state is continuing its commitment to making New York State a leader in battery technology development through its support of the New York Battery & Storage Technology (NY-BEST) consortium. Located in upstate Rochester, NY, the consortium, under the direction of Executive Director William Acker, now supports and provides regulatory and educational outreach programs to more than 80 member companies working on various aspects of improved battery technology and battery storage systems. NY-BEST works in conjunction with several of the leading in state university centers partnering with private battery and battery equipment companies to improve battery performance while decreasing costs. In addition NY-BEST provides battery and battery storage equipment manufacturers with best in class testing facilities.
New York appears to have made a major decision regarding how and where its energy resources are to be managed over the long term. It has for the moment decided to move in the direction of alternative and renewable distributed energy resources coming from the market side over the traditional oil and gas industry in particular to the shale gas industry when it comes to the use of hydraulic fracking. How this will play out will be of great interest to other states and it will allow, for perhaps the first time, a direct comparison between the differing energy development paths now taking place between New York and Pennsylvania.
