The waning hours of the 2019 New York State legislative session saw both houses pass an extraordinary piece of legislation. The Climate Leadership and Community Protection Act (“Act”) requires the State to achieve a carbon-free electricity system by 2040 and reduce greenhouse gas emissions 85% below 1990 levels by 2050. The Act creates and empowers a council to determine how the State will achieve these goals. It is anticipated that the Act will also drive investment and a number of clean energy solutions, as well as target investments to benefit disadvantaged communities. The Act will also clearly impact existing energy consumers, including large industrial users. The Act was signed into law by Governor Cuomo on July 18, 2019. The new law is likely to profoundly impact and transform New York’s economy over the coming 50 years.
On April 1, 2019, the State Legislature approved a $175.5 billion budget for 2019-2020, which, among other things, eliminates an important sales tax exemption that allowed certain commercial customers of Energy Service Companies (“ESCOs”) to receive electric and gas supply without paying sales tax on transmission and distribution charges.
Since 2000, shortly after New York restructured its energy markets, the NYS Tax Law has included an exemption for commercial ESCO customers that was designed to incentivize consumer choice and enhance the ability of ESCOs to offer competitive prices (“Exemption”). Under the Exemption, commercial customers that received service from an ESCO would pay sales tax on the commodity portion of their bills, but not the delivery service. In contrast, default utility customers paid sales tax on both the commodity and delivery provided by the utility. Continue Reading New York Repeals ESCO Sales Tax Exemption for Businesses
Throughout the first four years of New York’s Reforming the Energy Vision (“REV”) initiative, the precise role of energy storage has been unclear. There was no energy storage goal, only sparse incentives were available to spur development, the regulatory framework remained under construction, and the relatively nascent storage applications did not seem to fit within currently existing market mechanisms.
New York is now paving the way for a robust storage industry. In December 2018, the Public Service Commission (“Commission”) adopted an energy storage goal of 3,000 MW by 2030, with an interim target of 1,500 MW by 2025 (the “Storage Order”). To jumpstart the program, the Commission ordered Consolidated Edison to competitively procure and deploy 300 MW of energy storage by 2022, and the remaining utilities to each procure 10 MW of energy storage in their respective service territories. Continue Reading New York Transforms Energy Storage Economics
The New York Public Service Commission (“PSC”) appears to be creating a new Office of Investigations and Enforcement (“OIE”) and has posted a job listing for a Director of OIE (“Director”) who would report to the CEO of the Department of Public Service (“DPS”), as well as the Chairman of the PSC. The Director would be tasked with managing the OIE’s efforts in investigating and enforcing the regulations promulgated pursuant to §25 and §25-a of the Public Service Law. This mandate may include a vast field of public utilities and comes at a time when New York is in the midst of updating its complex Value of Distributed Energy Resources mechanism, which regulates electric utilities in their dealings with the ever-increasing number of privately owned distributed energy resources. Continue Reading New York Public Service Commission to Create “Office of Investigations and Enforcement” to Centralize Compliance Regime
On August 21, 2018, the Environmental Protection Agency (“EPA”) proposed a new rule which would replace the Obama-era Clean Power Plan (“CPP”) and establish new emissions guidelines for states to address greenhouse gas (“GHG”) emissions from electric-generating power plants. As background, the CPP was stayed by the Supreme Court in a 5-4 decision in February of 2016 before the rule ever went into effect. More recently, in October 2017, the EPA announced its intention to effectively repeal the CPP because it “exceeded” the EPA’s authority. Now, the EPA is proposing to enact the Affordable Clean Energy rule (“ACE Rule”) to reduce GHGs while giving states more flexibility to achieve that goal. Continue Reading EPA Proposes to Replace Clean Power Plan with Affordable Clean Energy Rule
Recently, Phillips Lytle’s own Dennis Elsenbeck made an appearance on Spectrum News’ Capital Tonight program with host Liz Benjamin to discuss the energy landscape in New York and the economic impact of energy-related policy decisions. As the State legislative calendar year comes to a close, the conversation centered around how energy policy should be focused on meeting market demands so that it aligns with the current economic goals to drive development. As the energy industry continues to undergo changes through innovation and entrepreneurship, synergy amongst the key players – State policymakers, economic developers and the utilities – will influence the effectiveness and efficiency of energy-related development across the State. The interview in its entirety may be viewed in this video.
New York State (“NYS” or “State”) is launching a second round of request for proposals (“RFPs”) for large-scale renewable projects. According to NYS Energy Research and Development Authority (“NYSERDA”), the State is seeking to accelerate progress to achieve the lofty goals set in the Clean Energy Standard initiative that went into effect in August of 2016. As we have previously reported, the Clean Energy Standard mandates that renewable energy supply 50 percent of the State’s electricity needs by 2030. Large-scale renewable projects, such as utility-scale solar and wind, have been expected to carry a huge load in bridging the gap between the mandated 50 percent and the roughly 23 percent that was produced by renewables in 2016. Continue Reading New York State Seeks Proposals for Large-Scale Renewable Projects
Governor Andrew Cuomo’s proposed 2019 budget originally proposed the elimination of an important sales tax exemption that allows certain customers of Energy Service Companies (“ESCOs”) to receive electric and gas supply without paying transmission and distribution sales tax. Currently, nonresidential default utility customers pay sales tax on both commodity and delivery, while nonresidential ESCO customers pay sales tax only on commodity. The sales tax exemption is designed to incentivize consumer choice and allows ESCOs to offer competitive prices to their customer base.
Early Saturday morning, New York State lawmakers approved a $168 billion budget for fiscal year 2019. The budget for fiscal year 2019, which began on April 1, 2018, does not include the controversial repeal of the ESCO sales tax exemption.
Maintaining the long-standing ESCO sales tax exemption in the final budget is good news for ESCOs and their customers, which remain under continued pressure from the Public Service Commission to reform their business practices.
Following a series of extensions, the New York Public Service Commission (“Commission”) has once again extended the deadline for Community Distributed Generation (“CDG”) and on-site mass market distributed generation (“DG”) providers to file a completed registration package in conformance with the Uniform Business Practices for Distributed Energy Suppliers (“UBP-DERS”). The Commission extended the deadline to allow Department of Public Service Staff to modify the Standard Customer Disclosure Statements based on feedback received from stakeholders. With this extension, CDG and on-site DG providers are required to submit their registration package by May 1, 2018. For more information regarding the registration process, please see our most recent Client Alert.
The Public Service Commission’s (“PSC” or “Commission”) recently enacted Uniform Business Practices for Distributed Energy Resource Suppliers (“UBP-DERS”) Order establishes multiple tiers of regulatory oversight based on the characteristics of a DER provider’s business model. For entities engaged in residential sales of community distributed generation (“CDG”) subscriptions and on-site mass market distributed generation (“DG”) installations, the UBP-DERS requires, among other things, registration with the PSC, compliance with marketing and advertising standards, inclusion of specified terms and disclosures in sales agreements, and customer complaint procedures/reporting requirements.
Pursuant to the Commission’s UBP-DERS Order, all CDG and on-site mass market DG providers must file a completed registration form, including sample contracts and bills, in conformance with the UBP-DERS regulations. DER providers must submit these materials by April 2, 2018. For more information regarding the registration process, please see our most recent Energy Client Alert.