Utility fees a sticking point; Business groups looking for concrete plan to rein in Green Bank charges
The state’s most powerful business groups want the Cuomo administration to come up with an “exit strategy” for its numerous clean energy subsidy programs as part of the governor’s plan to create a $1 billion Green Bank.
Cuomo has been pushing the Green Bank as a way to fund the state’s clean energy policies using more money from the private sector. Currently, the state provides subsidies for renewable energy programs such as wind farms and solar installations through special fees on utility bills.
While the fees are relatively small for homeowners – perhaps several dollars each month – they can be enormous for businesses, especially those that use large amounts of electricity.
The Cuomo administration has said that the Green Bank will eventually help reduce the state’s reliance on utility customers to underwrite the subsidy programs, which are managed by NYSERDA, the state-run energy authority, and are expected to total $750 million this year.
Cuomo is proposing $210 million in “seed” capital for the Green Bank that would come from existing NYSERDA programs as well as money the state earns from the auction of carbon dioxide allowances under the Regional Greenhouse Gas Initiative to power plant operators. The Green Bank would work with traditional lenders and Wall Street to create loan and investment products for clean energy projects.
Business groups in the state generally support the Green Bank concept. But they want more done by the administration and NYSERDA to detail plans for winding down the fees charged on utility customers, which typically appear on monthly residential bills as the “SBC/RPS” charge.
However, for industrial customers that use large amounts of electricity, the SBC/RPS charge can be enormous. A group of industrial companies in the state that includes companies like Alcoa, Corning, Crucible, QuadGraphics and Wegmans, told state regulators last month that the fees can total more than $1 million a month for a company that runs a factory with an electrical load of 20 megawatts, while for a company with a 40-megawatt load, the cost can be $2 million a month. That’s double or triple the actual delivery charges the company pays its utility.
The industrial group says that the state Public Service Commission, which must approve the Green Bank, should require NYSERDA to come up with a plan to scale back the fees as part of rolling out the Green Bank.
The Business Council of New York is also recommending the same requirement, arguing that the NYSERDA fees are currently at a “damaging level” that “jeopardize business expansion and job retention,” according to a filing made with the PSC last week by Darren Suarez, the group’s director of government relations.
NYSERDA, however, disagrees with the idea, arguing in its own filing with the PSC that a schedule on the elimination of utility fees would be “premature at this time.”
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