NY State Senate Bill 2021-S9426

Senate Bill S9426

2021-2022 Legislative Session

Relates to providing net revenues from utility-owned large-scale renewable generation projects to low-income customers and authorizes utility companies to own such projects

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Archive: Last Bill Status - In Senate Committee Energy And Telecommunications Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 26, 2022	referred to energy and telecommunications

2021-S9426 (ACTIVE) - Details

See Assembly Version of this Bill:: A10484
Current Committee:: Senate Energy And Telecommunications
Law Section:: Public Service Law
Laws Affected:: Add §66-t, amd §66-r, Pub Serv L; amd §224-d, Lab L
Versions Introduced in 2023-2024 Legislative Session:: S737, A7850

2021-S9426 (ACTIVE) - Summary

Relates to providing net revenues from utility-owned large-scale renewable generation projects to low-income customers; authorizes utility companies to own such projects; provides that the commission shall require labor agreements and labor peace agreements.

2021-S9426 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9426

SPONSOR: PARKER
 
TITLE OF BILL:

An act to amend the public service law and the labor law, in relation to
providing net revenues from utility-owned large-scale renewable gener-
ation projects to low-income customers and authorizes utility companies
to own such projects

 
PURPOSE OR GENERAL IDEA OF BILL:

In order to meet the state's renewable energy goals, set forth by the
Climate Leadership and Community Protection Act (CLCPA), this legis-
lation authorizes New York's electric utilities to own a limited number
of large-scale renewable generating facilities in New York state.
Further, this legislation requires that all net revenues from the sale
of electricity and the production of renewable energy credits (RECs)
from utility-owned large-scale renewable generating facilities be
provided to low-income customers in the form of bill credits.

 
SUMMARY OF PROVISIONS:

Section one is legislative findings and intent.

Section two adds a new section 66-q to the public service law (PSL) to
explicitly authorize New York's energy utility companies to own and
operate renewable energy generating facilities and requires that all of
the net revenues from the sale of electricity and the production of RECs
from such renewable facilities be provided to low-income customers in
the form of bill credits (in addition to any other program or benefit
offered to such customers).

Section two also requires the utility-owned renewable generation facili-
ties covered by the legislation are subject to Public Service Commission
(PSC) oversight.

This section also sets forth standards for utility-owned renewable
generating facilities. Such standards require that the renewable power
generated at such facilities remain in New York State for the benefit of
New Yorkers and that such power not be exported out of state.

Further, section two states that utility-owned renewable generation
facilities be built pursuant to a competitive third-party bidding proc-
ess. This will ensure that New York maintains a robust private energy
developer market.

Section two also requires that prevailing wage and Buy America laws are
followed, and that the facility be owned and operated in a manner that
provides beneficial cost and rate impacts for customers. This section
also limits the amount of renewable generation capacity that can be
owned by utility companies in New York to twenty-five percent of the
total generation capacity needed to achieve the State's renewable energy
goals.

Finally, section two directs that the Commission shall issue such
orders, rules and regulations as may be necessary and appropriate to
implement this legislation and further directs the commission (within 60
days after the bill becomes law) to commence a proceeding necessary and
appropriate to implement the provisions of this new section of the
public service law.

Section three amends section 66-r of the public service law and defines
a covered renewable energy system.

Section three also establishes a Buy American requirement for the
procurement of iron or structural steel parts used in the performance of
each contract for the construction, reconstruction, alteration, repair,
improvement or maintenance of a covered renewable energy system. Such a
requirement may be waived if the requirement is not in the public inter-
est, would result in unreasonable costs, or the components or parts are
not manufactured in the United States in sufficient quantity or quality.

Section four amends section 224-d of the labor law and defines "covered
renewable energy system."

The bill is effective immediately.

 
JUSTIFICATION:

The primary objectives of this legislation are to aid New York State in
meeting its 70% renewable energy by 2030 and 100% zero-emission elec-
tricity by 2040 goals (as mandated by the CLCPA) and ensure that low-in-
come customers share in the benefits of the clean energy future by
providing them with electric bill credits.

It is vitally important that low-income customers are not left behind in
the clean energy transition. These customers' involvement in energy
efficiency programs and their adoption rate for distributed energy
resources is very low. Generally, low-income customers do not have
access to on-site solar and are under-represented in community distrib-
uted generation. If these adoption levels continue, low-income customers
could experience increased energy bills from the energy transition,
while not reaping many of its benefits.

The need for this legislation is immense and immediate.

Only 3.5% of the electric energy production in New York State is from
existing non-hydro renewables (i.e., wind, solar, and biomass) compris-
ing approximately 2,100 MW built under the existing model with NYSERDA
contracts, since 2005. In order to meet the ambitious and critically
important renewable energy goals of the CLCPA, it is estimated that the
State will need to add new renewable generation at a rate four times
faster than the past sixteen years. This Herculean task will require an
all hands-on-deck approach, one that this legislation seeks to further.

Since 1998 regulated utilities have been discouraged by the Public
Service Commission from owning and operating electric generation in New
York even though utilities have considerable expertise in renewables.

This legislation strikes the right balance between bringing additional
market participants into the fold to help the state achieve its clean
energy goals while ensuring the continuation of a robust private devel-
oper market. This is achieved in two ways: first, by requiring that all
renewable generation facilities built pursuant to this legislation be
done by a third-party private developer pursuant to a competitive
bidding process. Secondly, the legislation imposes a total limit on the
amount of generating capacity utilities would be authorized to own,
reserving the rest to other market participants.

Further, this legislation ensures that labor is respected through the
applicability of prevailing wage and Buy America requirements.

 
LOWER COST FOR CUSTOMERS

This legislation both directly lowers costs for low-income customers
through bill credits but also lowers overall costs for all utility
customers by limiting the return on projects to a regulated rate set by
the Public Service Commission, utilizing utilities' lower capital cost
through high credit ratings, and retaining residual value of projects
after a 20-year cost recovery period.

 
BETTER RESULTS FOR NEW YORK STATE

Under this legislation, customers retain value for the life of the
facility and utilities would be prohibited from selling energy and
renewable credits to other States. Further, utility-owned renewables
would earn a regulated rate of return for 20 years and then would oper-
ate in New York without any premium for the next 20+ years.

Additionally, New York utilities have a long-term interest in the state
and will not "flip" projects unless required to divest by the PSC, in
which case proceeds of the sale of such projects would go to customers.

 
PRIOR LEGISLATIVE HISTORY:

New Legislation

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
Immediately.

2021-S9426 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9426
 
                             I N  S E N A T E
 
                               May 26, 2022
                                ___________
 
 Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
   printed to be committed to the Committee on  Energy  and  Telecommuni-
   cations
 
 AN ACT to amend the public service law and the labor law, in relation to
   providing net revenues from utility-owned large-scale renewable gener-
   ation  projects  to low-income customers and authorizes utility compa-
   nies to own such projects

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Legislative findings and intent. 1. New York state recog-
 nizes the deleterious impacts of climate change  including  increasingly
 frequent catastrophic weather events.
   2.  Pursuant  to the New  York  state climate leadership and community
 protection act (CLCPA), New York  state  seeks  to  dramatically  reduce
 greenhouse  gas  emissions  and move its electric generation from fossil
 fuel-based generation to renewable-based generation. New York state  has
 mandated  that seventy percent of electricity come from renewable energy
 sources by year 2030 and one hundred percent of  electricity  come  from
 carbon neutral sources by 2040.
   3.  Further, New York state recognizes that the current pace of devel-
 opment of in-state renewable energy resources is  insufficient  to  meet
 the state's statutory renewable generation goals on schedule.
   4.  Because  New  York  state seeks to accomplish these energy-related
 goals and standards as soon as practicable allowing regulated  utilities
 to  own  and operate renewable generation is essential to achieving such
 goals and to provide a consistent and affordable supply of  carbon-free,
 renewably generated electricity by 2030, through 2050 and beyond.
   5.  New  York  state  seeks  to continue to develop in-state renewable
 energy projects that will drive down costs, benefit customers  receiving
 retail  electric  delivery  particularly  those customers who are low to
 moderate income.
   6. New York state has a proprietary interest in these  projects  being
 efficiently  built  and  operated without unnecessary disruptions, which

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD14768-06-2

 S. 9426                             2
 
 justifies the use of project labor agreements  and  labor  peace  agree-
 ments.
   § 2. The public service law is amended by adding a new section 66-t to
 read as follows:
   §  66-T.  REGULATED  LARGE  SCALE RENEWABLE GENERATION. 1. IN ORDER TO
 SUPPORT THE STATE IN MEETING STATE ENERGY-RELATED GOALS  AND  STANDARDS,
 CORPORATIONS  SUBJECT TO THE PROVISIONS OF THIS ARTICLE PROVIDING RETAIL
 ELECTRIC SERVICE SHALL BE AUTHORIZED TO OWN AND OPERATE RENEWABLE ENERGY
 GENERATING FACILITIES IN NEW YORK  STATE.  SUCH  CORPORATIONS  SHALL  BE
 AUTHORIZED  TO  OWN AND OPERATE SUCH FACILITIES INDIVIDUALLY OR IN PART-
 NERSHIP WITH OTHER PERSONS DOING BUSINESS IN NEW YORK.
   2. A CORPORATION OWNING AND OPERATING A  RENEWABLE  ENERGY  GENERATION
 FACILITY  PURSUANT  TO  THIS SECTION SHALL PROVIDE ALL NET REVENUES FROM
 SUCH FACILITY TO LOW-INCOME CUSTOMERS IN THE FORM OF BILL CREDITS, WHICH
 SHALL BE IN ADDITION TO ANY OTHER PROGRAM  OR  BENEFIT  OFFERED  BY  THE
 CORPORATION TO ASSIST SUCH CUSTOMERS.
   3.  IN  ADDITION TO THE PROVISIONS OF SUBDIVISION TWO OF THIS SECTION,
 ANY RENEWABLE ENERGY GENERATING FACILITY OWNED  BY  SUCH  A  CORPORATION
 SHALL BE:
   (A)  SUBJECT  TO COMMISSION OVERSIGHT IN ORDER TO ENSURE THAT: (I) THE
 POWER GENERATED AT SUCH FACILITIES REMAINS IN-STATE FOR THE  BENEFIT  OF
 CUSTOMERS  AND  THE  STATE;  (II) THE POWER GENERATED AT SUCH FACILITIES
 SHALL NOT BE EXPORTED OUT-OF-STATE; AND (III)  ANY  REPOWERING  OF  SUCH
 GENERATING  FACILITIES  SHALL  COMPLY  WITH  ALL  REQUIREMENTS  OF  THIS
 SECTION;
   (B) BUILT, PURSUANT TO  A  COMPETITIVE  THIRD-PARTY  BIDDING  PROCESS,
 WHICH SHALL BE ISSUED BY THE CORPORATION;
   (C)  SUBJECT  TO  SECTION  SIXTY-SIX-R OF THIS ARTICLE AND SECTION TWO
 HUNDRED TWENTY-FOUR-D OF THE LABOR LAW; AND
   (D) OWNED AND OPERATED IN A MANNER THAT PROVIDES BENEFICIAL  COST  AND
 RATE IMPACTS TO CUSTOMERS.
   4.  THE COMMISSION SHALL ESTABLISH A GENERATION CAPACITY LIMIT FOR THE
 TOTAL  GENERATION  CAPACITY  OWNED  BY  CORPORATIONS  PURSUANT  TO  THIS
 SECTION.    THE  TOTAL  GENERATION CAPACITY SHALL NOT EXCEED TWENTY-FIVE
 PERCENT OF THE TOTAL GENERATION CAPACITY NEEDED TO ACHIEVE THE RENEWABLE
 ENERGY GOALS DESCRIBED IN SECTION SIXTY-SIX-P OF THIS ARTICLE.
   5. THE COMMISSION SHALL ISSUE SUCH ORDERS, RULES  AND  REGULATIONS  AS
 MAY BE NECESSARY AND APPROPRIATE TO IMPLEMENT THIS SECTION.
   §  3.  Section 66-r of the public service law, as added by section 2-a
 of part AA of chapter 56 of the laws of 2021,  is  amended  to  read  as
 follows:
   §  66-r. Requirements for certain renewable energy systems. 1. For the
 purposes of this section, a "covered renewable energy  system"  means  a
 renewable  energy system, as such term is defined in section sixty-six-p
 of this article, with a capacity of greater than five  megawatts  alter-
 nating  current  and  which involves the procurement of renewable energy
 credits by a public entity, or a third party acting on  behalf  and  for
 the  benefit of a public entity. "COVERED RENEWABLE ENERGY SYSTEM" SHALL
 ALSO INCLUDE ANY GENERATION  FACILITY  AUTHORIZED  PURSUANT  TO  SECTION
 SIXTY-SIX-T OF THIS ARTICLE.
   2.  For  purposes  of this section, "public entity" shall include, but
 shall not be limited to, the state, a local development  corporation  as
 defined  in  subdivision  eight  of  section eighteen hundred one of the
 public authorities law or section fourteen hundred eleven  of  the  not-
 for-profit  corporation  law,  a  municipal  corporation  as  defined in
 section one hundred nineteen-n of the general municipal law,  an  indus-
 S. 9426                             3
 
 trial  development  agency  formed pursuant to article eighteen-A of the
 general municipal  law  or  industrial  development  authorities  formed
 pursuant  to article eight of the public authorities law, and any state,
 local  or  interstate or international authorities as defined in section
 two of the public authorities law; and shall include any  trust  created
 by any such entities.
   3.  The commission shall require that the owner of the covered renewa-
 ble energy system, or a third party acting on the owner's behalf, as  an
 ongoing  condition  of  any  renewable  energy  credits agreement with a
 public entity, OR AS AN ONGOING CONDITION OF ITS AUTHORIZATION TO  OPER-
 ATE  AND SUPPORT THE STATE IN MEETING ENERGY-RELATED GOALS, shall stipu-
 late to the fiscal officer that it will enter into a labor peace  agree-
 ment  with  at  least one bona fide labor organization either where such
 bona fide labor organization is actively representing employees  provid-
 ing  necessary  operations  and  maintenance  services for the renewable
 energy system at the time of such agreement or upon  notice  by  a  bona
 fide  labor  organization  that is attempting to represent employees who
 will provide necessary  operations  and  maintenance  services  for  the
 renewable energy system employed in the state. The maintenance of such a
 labor  peace  agreement  shall  be  an ongoing material condition of any
 continuation of payments under a renewable energy credits  agreement  OR
 AUTHORIZATION  BY  THE  COMMISSION.  For purposes of this section "labor
 peace agreement" means an agreement between an entity and  labor  organ-
 ization  that,  at a minimum, protects the state's proprietary interests
 by prohibiting labor organizations and members from engaging in  picket-
 ing,  work stoppages, boycotts, and any other economic interference with
 the relevant renewable energy system. "Renewable energy  credits  agree-
 ment"  shall  mean  any public entity contract that provides production-
 based payments to a renewable energy project as defined in this section.
   4.(a) (1) Any public entity, in each contract for construction, recon-
 struction, alteration, repair, improvement or maintenance of  a  covered
 renewable  energy  system  which involves the procurement of a renewable
 energy credits agreement by a public entity, or a third party acting  on
 behalf and for the benefit of a public entity, the "public work" for the
 purposes  of  this  subdivision,  shall  ensure that such contract shall
 contain a provision that the iron and structural steel used or  supplied
 in  the  performance of the contract or any subcontract thereto and that
 is permanently incorporated into the public work, shall be  produced  or
 made  in whole or substantial part in the United States, its territories
 or possessions. In the case of a structural  iron  or  structural  steel
 product all manufacturing must take place in the United States, from the
 initial melting stage through the application of coatings, except metal-
 lurgical  processes involving the refinement of steel additives. For the
 purposes of this subdivision, "permanently incorporated" shall  mean  an
 iron  or steel product that is required to remain in place at the end of
 the project contract, in a fixed location, affixed to the public work to
 which it was incorporated. Iron and steel products that are  capable  of
 being  moved  from  one location to another are not permanently incorpo-
 rated into a public work.
   (2) ANY CORPORATION IN EACH CONTRACT FOR CONSTRUCTION, RECONSTRUCTION,
 ALTERATION, REPAIR, IMPROVEMENT OR MAINTENANCE OF  A  COVERED  RENEWABLE
 ENERGY  SYSTEM  AUTHORIZED PURSUANT TO SECTION SIXTY-SIX-T OF THIS ARTI-
 CLE, OR A THIRD PARTY ACTING ON BEHALF AND FOR THE BENEFIT OF THE CORPO-
 RATION, THE "PUBLIC WORK" FOR THE PURPOSES OF  THIS  SUBDIVISION,  SHALL
 ENSURE  THAT SUCH CONTRACT SHALL CONTAIN A PROVISION THAT THE STRUCTURAL
 IRON AND STRUCTURAL STEEL USED OR SUPPLIED IN  THE  PERFORMANCE  OF  THE
 S. 9426                             4
 
 CONTRACT OR ANY SUBCONTRACT THERETO AND THAT IS PERMANENTLY INCORPORATED
 INTO  THE PUBLIC WORK, SHALL BE PRODUCED OR MADE IN WHOLE OR SUBSTANTIAL
 PART IN THE UNITED STATES, ITS TERRITORIES OR POSSESSIONS. IN  THE  CASE
 OF  A STRUCTURAL IRON OR STRUCTURAL STEEL PRODUCT ALL MANUFACTURING MUST
 TAKE PLACE IN THE UNITED STATES, FROM THE INITIAL MELTING STAGE  THROUGH
 THE  APPLICATION  OF  COATINGS, EXCEPT METALLURGICAL PROCESSES INVOLVING
 THE REFINEMENT OF STEEL ADDITIVES. FOR THE PURPOSES OF THIS SUBDIVISION,
 "PERMANENTLY INCORPORATED" SHALL MEAN AN IRON OR STEEL PRODUCT  THAT  IS
 REQUIRED  TO  REMAIN  IN  PLACE AT THE END OF THE PROJECT CONTRACT, IN A
 FIXED LOCATION, AFFIXED TO THE PUBLIC WORK TO WHICH IT WAS INCORPORATED.
 IRON AND STEEL PRODUCTS  THAT  ARE  CAPABLE  OF  BEING  MOVED  FROM  ONE
 LOCATION TO ANOTHER ARE NOT PERMANENTLY INCORPORATED INTO A PUBLIC WORK.
   (b)  The  provisions  of  paragraph  (a) of this subdivision shall not
 apply if the head of the  department  or  agency  OR  CORPORATION  UNDER
 SUBPARAGRAPH  (1) OF PARAGRAPH (A) constructing the public works, in his
 or her sole discretion, determines that the provisions would not  be  in
 the public interest, would result in unreasonable costs, or that obtain-
 ing  such  steel or iron in the United States would increase the cost of
 the contract by an unreasonable amount, or such iron or steel, including
 without limitation  structural  iron  and  structural  steel  cannot  be
 produced  or  made  in  the  United  States in sufficient and reasonably
 available quantities and  of  satisfactory  quality.  The  head  of  the
 department  or  agency  constructing the public works shall include this
 determination in an advertisement  or  solicitation  of  a  request  for
 proposal,  invitation for bid, or solicitation of proposal, or any other
 method provided for by law or regulation for soliciting a response  from
 offerors intending to result in a contract pursuant to this subdivision.
 The  provisions of paragraph (a) of this subdivision shall not apply for
 equipment purchased by a covered renewable energy system  prior  to  the
 effective date of this [chapter] SECTION.
   (c) The head of the department or agency constructing the public works
 may,  at  his  or  her  sole discretion, provide for a solicitation of a
 request for proposal, invitation for bid, or solicitation  of  proposal,
 or  any  other method provided for by law or regulation for soliciting a
 response from offerors intending to result in  a  contract  pursuant  to
 this  paragraph  involving a competitive process in which the evaluation
 of competing bids gives  significant  consideration  in  the  evaluation
 process  to  the  procurement  of equipment and supplies from businesses
 located in New York state.
   5. Whenever changes are proposed to  any  public  procurement  process
 involving  the program described in subdivision two of this section, the
 commission shall make  simultaneous  recommendations  to  the  temporary
 president of the senate and speaker of the assembly, regarding necessary
 changes  to  this  section, if any, in meeting the goals outlined in the
 legislative findings and intent of [the chapter by  which  this  section
 was  enacted]  PART  AA OF CHAPTER FIFTY-SIX OF THE LAWS OF TWO THOUSAND
 TWENTY-ONE.
   § 4. Subdivision 1 of section 224-d of the  labor  law,  as  added  by
 section  2  of  part AA of chapter 56 of the laws of 2021, is amended to
 read as follows:
   1. For purposes of this section, a "covered renewable  energy  system"
 means  a  renewable  energy  system,  as such term is defined in section
 sixty-six-p of the public service law, with a capacity of  greater  than
 five megawatts alternating current and which involves the procurement of
 renewable  energy credits by a public entity, or a third party acting on
 behalf and for the benefit of a public entity. "COVERED RENEWABLE ENERGY
 S. 9426                             5

 SYSTEM" SHALL ALSO INCLUDE ANY GENERATION FACILITY  AUTHORIZED  PURSUANT
 TO SECTION SIXTY-SIX-T OF THE PUBLIC SERVICE LAW.
   §  5.  No  later than sixty days after the effective date of this act,
 the public service commission shall commence a proceeding necessary  and
 appropriate  to  implement  the provisions of section 66-t of the public
 service law.
   § 6. This act shall take effect immediately.

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