New York Governor Andrew Cuomo last week announced the New York State Public Service Commission's approval of a 10-year, $5 billion Clean Energy Fund to accelerate the growth of New York's clean energy economy, address climate change, strengthen resiliency in the face of extreme weather and lower energy bills for New Yorkers starting this year. Additionally, the fund will attract and leverage third-party capital to support the Governor's aggressive Clean Energy Standard, one of the nation's most ambitious goals to meet 50% of our electricity needs with renewable resources by 2030.
The $5 billion Clean Energy Fund, to be administered by the New York State Energy Research and Development Authority, builds on the progress the state is already making in developing a robust clean tech sector. The fund is projected to result in more than $39 billion in customer bill savings over the next 10 years through projects and private-public partnerships. In addition to the $39 billion in overall customer savings, consumers and businesses are expected to see lower costs of $1.5 billion over the next 10 years, including an immediate reduction of $91 million from 2016 electric and gas costs compared to 2015.
The fund will operate four major portfolios:
- Market Development ($2.7 billion): NYSERDA will undertake a variety of activities to stimulate consumer demand for clean energy alternatives, energy efficiency while helping to build clean energy supply chains to meet that growing customer demand. At least $234.5 million must be invested in initiatives that benefit low-to-moderate income New Yorkers during the first three years of the fund;
- NY-Sun ($961 million): The fund finalizes the funding and confirms the long-term commitment for NY-Sun and for the growing solar electric market and industry in New York State, by supporting rapid and continued cost reduction. This will continue to make solar energy more affordable and accessible for residential and commercial solar customers, and will drive the growth of the solar industry in New York, which currently employs more than 7,000 people across 538 solar companies in the state;
- NY Green Bank ($782 million): To leverage private sector investment, expand the availability of capital and increase confidence in lending for clean energy projects, the fund will complete the capitalization of the innovative NY Green Bank. The fund will increase NY Green Bank's total investment to $1 billion and will leverage an estimated $8 billion in private investment;
- Innovation and Research ($717 million): As New York State moves to a cleaner, more efficient, and more widely distributed energy system, the Clean Energy Fund will help spur innovations through research and technology development that will drive clean-tech business growth and job creation while providing more energy choices to residential and business customers.
At last week's State of the State address, Governor Cuomo officially proposed the creation of a Clean Energy Standard and directed the Public Service Commission to establish enforceable mandates for renewable power by June. The Commission approved a public process to adopt a Clean Energy Standard that will also include a separate support mechanism for upstate nuclear power plants. Since nuclear facilities do not produce greenhouse gas emissions, they will help the State transition to a future under the Clean Energy Standard without losing ground on emission reductions statewide.
The Commission also took other steps to advance Governor Cuomo's Reforming the Energy Vision Strategy, or REV, by directing major electric and gas utilities to develop new, cutting-edge energy efficiency programs, on both a regional and statewide basis. It also established a benefit-cost analysis framework for evaluating new energy proposals, such as smaller, cleaner power plants, to determine whether they meet the energy- and cost-saving goals of REV.
In the Clean Energy Fund order, the Commission also allocated $150 million for the development of new Large Scale Renewables power projects in 2016. As the Commission develops a Clean Energy Standard, it will create new incentives for large scale renewables and a new mechanism to prevent the premature retirement of safe, upstate nuclear power plants during this transition.