Click here for a downloadable version of our Fall 2017 Newsletter.
- Central Hudson’s Proposed Rate Plan—New and Higher Charges for What?
- Statewide Campaign to Reduce Utility Fixed Charges
- CCA in New York: Room for Improvement
- Converting to LED Street Lighting in the Mid-Hudson Region
- Investigation into Central Hudson Shut-Off Practices Prompts Reforms
- Community Solar
- Fighting New Fossil Fuel Investments
Much is happening on the energy front in New York—both locally and at the state-level—and CLP is busier than ever fighting for a cleaner, more affordable and more democratic energy system. On the positive side, community solar projects are finally beginning to come on line, more than two years after the PSC’s Order enabling shared renewable resources in the state. And this year, for the first time, utilities and energy supply companies (ESCOs) are required to procure a percentage of their power from new renewables under the Clean Energy Standard, adopted by the PSC in 2016. (Unfortunately, they are also required to subsidize costly, aged and unsafe nuclear power plants, with no plan in place for their retirement). On the fossil fuel front, while the Trump administration rolls out the red carpet for climate-destabilizing investments, grassroots and municipal opposition in our region has so far staved off the proposed Pilgrim Pipelines, and many local governments have stepped up efforts to reduce their reliance on fossil fuels and invest in public electric vehicle infrastructure in their communities. In 2017, some 20 local governments in the Mid-Hudson region achieved NYSERDA Clean Energy Community status in acknowledgement of their leadership.
Not all policy is heading in the direction it should. The PSC’s new compensation scheme for renewable power, which the utilities recently put in place to replace net-metering for community solar and large customer-sited projects, falls short in incentivizing the kinds of renewable investments we need, and gives way too much power to the utilities to determine the “value” of these resources to electricity customers and to society. (For more info, see CLP’s post when the Order was adopted, as well as a recent blog post by NRDC.) The new compensation method, known as the “Value of Distributed Energy Resources,” is a work in progress, and CLP is pressing at the state level for changes that will better support the kind of locally-based clean energy investments that will benefit our communities.
In August, Central Hudson proposed a new rate plan that calls for an increase of up to 11.6% in electricity rates to pay for a whole slew of planned spending items. CLP has signed up to be a party to the PSC proceeding, along with Poughkeepsie-based Nobody Leaves Mid-Hudson, and we encourage other community-based organizations to sign up, as well. In the last Central Hudson rate case (our first!), we succeeded in convincing the PSC to go against the settlement agreement of the parties (which we did not sign) and reject an increase in Central Hudson’s fixed charges. This time around, we want to see those fixed charges—the highest in the state—reduced!
CLP is very pleased to announce that we are now a 501(c)3 organization and welcome your tax-exempt contributions to sustaining our work! You can make a tax-deductible donation online here.
In late July, Central Hudson quietly filed a proposed rate plan with the PSC that would raise rates considerably in the coming year. The company submitted some 30 separate filings detailing what it proposes to spend money on. To pay for them all, the company says it needs to raise an additional $43 million revenues from its electricity customers and $18.1 million from gas customers, which amounts to rate increases of as much as 11.6% and 14.9%, respectively. As soon as CLP learned of the plan we began digging into the filings, uncovering a number of questionable spending items, and have been mobilizing the public and local elected leaders to get involved. Ahead of PSC public hearings on the rate case this past month in Poughkeepsie, Kingston, and Newburgh, CLP Director Jen Metzger prepared a helpful FAQ on the rate plan proposal for citizens and local governments, as well as a preliminary list of CLP concerns. At the Poughkeepsie hearing, public statements were fairly small in number but strong in message: Members of Nobody Leaves Mid-Hudson stated plainly that keeping the electricity on can be a matter of life and death, and that rate hikes make it difficult for low-income families to pay their bills, increasing the likelihood of shut-offs by the utility. In Kingston, more than 100 people turned out for the hearings at Kingston City Hall on October 10, speaking to a wide range of issues related to the rate plan. Among others, these included opposing the rate hike and calling for reduced fixed charges, opposing the proposed increase in shareholder profit at ratepayer expense, calling for accountability on the promised long-term benefits of the Fortis takeover, urging greater utility support for the shift to electric vehicles, opposing a proposed state-of-the-art training center and urging the utility to work with existing educational institutions in bolstering training programs. Click here to see the video of the public hearings, thanks to Clark Richters and KingstonCitizens.org!
TAKE ACTION! – So far, over 120 members of the public and elected officials have submitted comments directly on the PSC website. You can submit comments, too! Take a look at CLP’s background resources, and post comments for PSC Case Numbers 17-E-0459 and 17-G-0460(click “Post Comments” button on the top right-hand side).
CLP is partnering with AGREE, Acadia, the Public Utility Law Project (PULP), and other organizations across the state to press the Public Service Commission to reduce utility fixed charges—a component of our electricity (and gas) rates that are up to five times higher than in neighboring states. Fixed charges place an undue burden on utility customers, especially those who can least afford it, and severely limit the ability of New Yorkers to control energy costs by reducing consumption or installing renewable energy on their buildings.
Central Hudson has the highest fixed charges in the state, and among the highest in the country. (According to PULP’s Richard Berkeley, the company’s fixed rates were the fifth highest in the U.S. in 2015.) A reduction in fixed charges in the current rate case could lead to similar reductions in other NY utility service territories. Currently, Central Hudson is charging residents $24 per month and proposes to increase the charge to $25, followed by O&R ($20), National Grid ($17), Con Ed ($15.76), and NYSEG/RG&E ($15.11). By contrast, in New Jersey, Massachusetts, and Rhode Island, fixed charges are between $3 – $6 per month.
TAKE ACTION – CLP has spearheaded a statewide campaign in collaboration with partner organizations outside the Mid-Hudson region to encourage local elected leaders to urge the PSC to reduce unreasonable high fixed charges. So far, over 100 elected leaders have signed on to a letter to the PSC. This letter was sent to your local and county representatives—please urge them to sign on if they haven’t done so already. If you would like to know if your elected leaders have already signed, contact us at . The deadline for signatures is November 3.
As you may know, CLP has for several years been advocating for Community Choice Aggregation (CCA) “2.0” in New York—a version of CCA that harnesses the collective buying power and scale of communities to provide energy supply and services aligned with local needs and goals. Key attributes of a 2.0 program are 1) empowering communities over energy decision-making, and 2) localizing clean energy investments to the benefit of the local economy and community resilience. The PSC’s Order enabling CCA in New York, adopted in 2016, falls short in equipping communities with the tools to implement this vision. CLP has assessed the possibilities of working within the limits of the state’s regulatory framework, and has concluded that changes are needed in the regulatory structure for CCA to deliver meaningful long-term benefits to our communities.
Barriers to a CCA 2.0 model include:
- No pathway to integrate local renewable energy into CCA electricity supply. Unlike CCAs in California, CCAs here cannot directly procure local clean renewable energy as part of their supply mix.
- No revenue stream to support energy efficiency programs, community energy education, and energy planning. In California and Massachusetts, CCAs have access to Systems Benefit Charge funds collected by the utility to support programs for their communities.
- New York utilities are able to hedge in energy markets as ESCOs do, and because they are the aggregator of aggregators (some 75% of electricity customers in NY still get their supply through the utility), utilities are able to secure a price for electricity supply in wholesale markets that is challenging to beat. This will make it difficult for CCA programs to generate sufficient revenue from supply to support the kind of robust “2.0” programming characteristic of CCAs in California, where the supply market has not been deregulated. In Illinois and Massachusetts, the track record of CCAs in beating the utility supply price on a sustained basis has been mixed. Some CCA programs were suspended after initially succeeding in obtaining a competitive price and then later failing to replicate that success when the existing contract period ended.
Currently, CCAs in New York are pretty much limited to the 1.0 model: They can negotiate contracts with ESCOs for supply on behalf of their residents and small businesses. The supply is likely to be the typical mix of electricity sources, including fossil fuels and nuclear. Communities can seek contracts that support renewable energy through the purchase of Renewable Energy Credits (RECs) above and beyond what is required by New York’s Clean Energy Standard, but this will come at a premium cost (though at less of a premium than if purchased by an individual customer), and does not directly support local renewable development.
Last month, CLP introduced a proposal to the PSC that would enable New York CCA programs to automatically enroll their customers in community renewable projects, which would reduce energy supply costs to customers by reducing a number of developers’ project costs, expand the benefits of renewable energy to low- and moderate-income customers, and incentivize the development local renewable projects. CLP’s Jen Metzger is also participating in a state-level CCA working group, and is pressing for policy recommendations to the PSC’s Clean Energy Advisory Council and NYSERDA that will better support development of the advanced kind of CCA program for New York. At the local level, the CCA working group in Ulster County made great progress in developing goals and identifying an administrative structure for a Mid-Hudson CCA program, and in September decided to suspend further work until changes have been made at the state level that support viable programs to achieve these goals.
Meanwhile, the PSC this month approved a “generic” CCA implementation plan by the Municipal Energy and Gas Alliance, Inc. (MEGA) to aggregate the electricity and gas accounts of communities as MEGA signs them up over time (four municipalities in northern NY have signed up thus far). These will be “1.0” contracts with ESCOs for supply, at least in the near term, although the implementation plan leaves open the possibility of offering other types of services down the road. MEGA, which is a non-profit, along with several for-profit CCA consultants (e.g., Joule Assets and Good Energy), have been courting municipalities across the state to play the role of CCA Administrator on their behalf.
The NYSERDA-funded Mid-Hudson Streetlight Consortium, in which CLP is a project partner, is helping municipalities in our region understand the benefits of upgrading their street lights while also providing valuable technical support to move them forward with an LED conversion. CLPhas developed a guide for municipalities as part of this project to aid them in decision-making about which pathway is right for them—upgrading to utility LEDs or purchasing the street light system from the utility and upgrading on their own. Our economic analysis found that communities will save up to 37% over 15 years if they choose the utility option, and between 44% and 77% through municipal ownership. In Central Hudson territory, communities that choose to take ownership of their street lights and convert to LED would see an average reduction in their street light costs of 80%, once the initial investment has been paid off, and an energy savings of about 73%.
With this level of possible cost and energy savings, it is no wonder that many local governments are looking to move forward. The MHSC has developed Request for Proposals for aggregated procurement of services, which leverages the buying power of a group of municipalities to bring down the cost. There are currently 18 communities actively interested in participating, and more are expected to join. Towns that do not participate in the aggregated procurements can still benefit from them later on by “piggy-backing” on the contracts with selected bidders. If your municipality is interested in participating, contact project lead Pat Courtney Strong at or visit www.nystreetlights.com.
In December 2015, a month after CLP invited Department of Public Service Staff to Kingston to meet with community-based organizations to discuss local energy concerns, Poughkeepsie-based Nobody Leaves Mid-Hudson (NLMH) successfully petitioned the PSC to conduct a public investigation into the Central Hudson’s shut off practices for possible illegal shutoffs and racial discrimination. Nearly two years later, on September 14, the results of the PSC’s investigation were released, showing that Central Hudson shuts off more customers, and at a lower debt threshold, than other utilities, and carries out a disproportionate number of shutoffs in zip codes with a larger-than-average population of color.
In response to the findings of the investigation, Central Hudson will make a number of changes, including raising the threshold for payment arrears that is used to determine shutoffs, and raising this threshold during the winter compared to other times of year; prioritizing shutoffs on accounts with the oldest and greatest arrears; and instituting other new measures to reduce shutoffs. As NLMH’s Jonathan Bix observed, “Central Hudson’s policy changes in response to the investigation should mean fewer people of color having their power shut off, fewer people being shut off during the hazardous winter months, and significantly fewer people having their power shut off each year.” Congratulations to NLMH for this important victory!
More than two years have passed since the PSC enabled community renewable energy in New York, in which residents and businesses can purchase a share of the power from a renewable facility located off site—ideally somewhere in or near their community—and be compensated for it by the utility on their electricity bill as if the panels were located on their own roof.
Community solar is an ideal solution for residents and businesses who would like the benefits of renewable energy but cannot install solar on their buildings, either because they rent, their building is poorly sited for solar, or they can’t afford the investment. Since at least one of these conditions applies to many residents and small businesses, one would expect the demand for community solar to be huge, given the strong interest in local renewables in the Hudson Valley.
Nonetheless, these projects have been slow to get off the ground in the time since the PSC green-lighted community solar in 2015. Ironically, one reason for this, at least initially, was that the utilities were overwhelmed with requests from companies for a determination on whether proposed projects—some real, many just speculative—could connect to the grid. The interconnection process ground to a near halt as a result of the backlog in applications. This problem was largely fixed by the PSC this past year with new rules that sped up the review process and weeded out unlikely projects.
Then a second, larger barrier to community solar emerged: The PSC decided to change how customers would be compensated for the power produced by these projects, replacing retail net-metering with a new “Value of Distributed Energy Resources” (VDER)—a methodology that utilities would use to calculate the value of the electricity to the grid and to society. There was a long period of uncertainty about what these projects would be paid for their energy while the PSC worked on this complicated new compensation scheme. A PSC decision was finally issued in March 2017, and the utilities filed their tariffs in September setting the prices under the new VDER framework. While there is now more clarity, some project developers—particularly north of the Hudson Valley—are finding that the values are too low to make their projects financially feasible.
Time will tell how this new compensation scheme will affect the development of community solar in the Hudson Valley. The PSC has provided for a limited number of “market transition credits”that increase the value of the power above what VDER, alone, would offer. We’ve heard project developers say that the availability of these credits will allow them to provide cost savings to community solar participants. Beyond cost savings, community solar offers the opportunity to support new local renewables on the grid to replace climate-destabilizing fossil fuel-based electricity supply.
Solarize Hudson Valley, a NYSERDA-funded campaign, just announced that it is now signing up customers for two community renewable projects by the Massachusetts-based company, Nexamp, that are scheduled to come online in the spring of 2018—one for customers in Central Hudson territory and one for customers in Orange & Rockland territory. For more information about the projects and the details of participating, go to www.solarize-hudsonvalley.org.
In our December 2016 newsletter, we reported that the State Environmental Quality Review (SEQR) process had gotten underway for the proposed Pilgrim Pipelines—a project that would transport Bakken crude oil and refined products made from it between Albany, New York, and Linden, New Jersey. As proposed, each of the two parallel pipelines would carry up to 8.4 million gallons a day through towns, villages and cities in the Hudson Valley. As reported at the time, the NYS Department of Environmental Conservation (DEC) and the NYS Thruway Authority (the Co-Lead Agencies in the review) had issued a Positive Declaration of the potential for numerous and substantial environmental impacts. The next step in the process was for the company, Pilgrim Transportation of New York, to submit a “draft scoping document” describing the possible impacts to be considered in the review, followed by public review and comment. Nearly a year has now passed, and no draft scope has been presented by the company. With strong and broad grassroots and local government opposition to this ill-conceived project, no news is good news. We’ll keep you posted if there are any new developments.
Elsewhere in the Hudson Valley, the Federal Energy Regulatory Commission (FERC) has sought to assert its authority over the state and green-light fossil fuel infrastructure, waiving the NYS DEC’s authority over water quality certification for the Millennium Valley Lateral Pipeline. The DEC had earlier denied the water quality permit to the lateral pipeline, which would fuel the CPV Valley Power Plant that is under construction in Orange County. The DEC, together with environmental groups and landowners, are challenging the FERC decision in separate rehearing requests, charging that the decision violates the Federal Clean Water Act and other federal and state laws, and jeopardizes New York’s water resources.
TAKE ACTION – On October 27th FERC issued the Millennium Pipeline Company a notice to proceed with construction of the Valley Lateral Pipeline, despite warnings against doing so from the State. Governor Cuomo still has the power to suspend permits for the power plant, and the Attorney General should seek an immediate stay in a NY Federal Court. Please reach out to the representatives below and urge them to take immediate action! You can also sign this petition urging Governor Cuomo to suspend the CPV permits.