New York: Making energy affordable for low-income residents, reforming how utilities make money

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The New York State Public Service Commission has put in place the state’s first-ever Energy Affordability Policy, which will provide nearly two million low-income New Yorkers with $248 million in direct cost relief each year. The new policy will limit energy costs for low-income New Yorkers to no more than 6 percent of household income – half of what many New Yorkers are currently paying.

“This bold action delivers much-needed relief to New Yorkers and will help expand access to clean energy in every corner of this state,” said Governor Andrew Cuomo. “I’m proud of this great progress toward creating a cleaner, greener and more resilient New York for all.”

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An order approved today by the Public Service Commission will immediately increase the number of low-income utility customers receiving monthly discounts from approximately 1.1 million customers to 1.65 million. The Governor has also directed a collaborative effort among state agencies, acting as a low-income energy task force, to develop new strategies so that all of the state’s 2.3 million households at or below 200 percent of the federal poverty level have greater access to clean energy and are better served by the state’s energy efficiency and assistance programs.

The new Energy Affordability Policy is an important part of Reforming the Energy Vision, Governor Cuomo’s comprehensive strategy to fight climate change and grow New York’s economy by investing in clean energy technology and generating 50 percent of the state’s electricity needs from renewable energy by 2030.

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Community Solar and microgrids will play a big part on this effort. Low-income communities will also benefit from Community Solar, a REV initiative that allows customers to share in the benefits of solar power even if they live in an apartment or other building that cannot support a rooftop solar system. REV is also encouraging communities to develop their own community microgrid projects. State funding under the $40 million NY Prize community microgrid competition will help communities across New York invest in new energy systems which will ensure critically important institutions such as police and fire stations, hospitals and schools – all of which are facilities that all communities, but particularly LMI communities, depend upon for their safety and wellbeing – can continue operating during and in the aftermath of an extreme weather event.

The PSC also released new revenue rules that diversify the ways power providers can make money. Utilities will now be able to earn returns tied to nontraditional, distributed investments, like using a customer’s PV and demand management to meet power needs instead of new central station capacity.

Advanced Energy Economy Institute and its state partner in New York issued the following statement in response to the groundbreaking order outlining a new revenue model for electric utilities issued by the PSC.

“This order details for the first time how utilities will be able to make money as they transition to a new role as distributed system providers,” said Lisa Frantzis, SVP, Strategy at Advanced Energy Economy, a national business group affiliated with AEE Institute that has been an active participant in the proceeding. “New York is paving the way toward a modern electricity system that takes advantage of the latest advanced energy technologies to improve efficiency, expand the use of distributed energy resources, and offer new options for customers to meet their energy needs. Utilities need to have new ways to generate revenue in a changing electricity marketplace. This order provides a framework for utilities to thrive in their new role.”

“The PSC’s new Order is an important step forward as the REV process goes from innovative ideas to a new framework for utility earnings,” said Anne Reynolds,Executive Director, Alliance for Clean Energy New York. “We are watching REV closely to see how it provides new business opportunities for energy efficiency and renewable energy. We are impressed with New York’s determination to remake the energy landscape.”

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