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State Energy Efficiency Policy Database

New York

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Summary

New York is a leading state on utility-sector energy efficiency programs.  New York’s energy efficiency programs are the result of New York Public Service Commission (PSC) cases dating back to 1996. Customers pay a non-bypassable system benefits charge (SBC) on their utility bills, and the SBC is applied to all customer bills whether they receive service from a local utility or from a competitive supplier. The charge supports a comprehensive set of energy efficiency programs for residential, multifamily, low-income, and commercial/industrial customers, as well as research and development efforts in both the Commission’s Technology & Market Development (T&MD) and Energy Efficiency Portfolio Standard (EEPS) programs.   In addition to the programs authorized by the Commission, two public power authorities not under the Commission’s jurisdiction, the New York Power Authority and the Long Island Power Authority, also offer energy efficiency programs to their customers.

New York has an Energy Efficiency Portfolio Standard with three-year targets for energy savings with a goal of reducing the state’s energy consumption by 15% by 2015.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

New York was one of the first states to establish a system benefits charge (SBC) to support energy efficiency and other public benefits energy programs. The system benefits fund is renewed at the discretion of the New York Public Service Commission (NYPSC). Since establishing initial funding for the systems benefits programs in 1996, the NYPSC has renewed funding levels for five-year periods. The NYPSC’s December 14, 2005 order in Case 05-M-0090 approved a five-year extension of the system benefits charge program from 2006-2011. New York Energy $mart™ energy efficiency, renewable energy, low-income and other programs were funded at approximately $175 million annually. Previous funding provided the programs with $150 million/year.

Additional program funding was approved in June 2008 when the NYPSC issued an Order Establishing Energy Efficiency Portfolio Standard (EEPS) and Approving Programs (Case 07-M-0548). This order adopted a goal of a 15% reduction in electricity usage in the state by 2015. The order increased the annual level of electric system benefits charges from $175 million to $334 million as of October 1, 2008. 

In October 2011, the Commission reauthorized a majority of the EEPS programs for the four-year period ending December 31, 2015, with revised targets and budgets where appropriate - NYSERDA was authorized to operate a limited number of programs through December 31, 2018.  Additionally, three gas efficiency programs run by National Fuel Gas Corporation pursuant to its rate cases were consolidated into the EEPS program. The percentage of funding allocated to low-income programs was also increased.  This Order increased the total EEPS electric and gas efficiency program budget by $2.1 billion; while increasing energy savings targets by 8,310 GWh and 15.9 million dekatherms.

Customers of New York’s regulated electric distribution utilities and natural gas utilities support the statewide energy efficiency and other public benefits energy programs.  These utilities include: Central Hudson Gas and Electric Corporation, Consolidated Edison Company of New York, Inc., New York State Electric and Gas Corporation, Niagara Mohawk Power Corporation, Orange and Rockland Utilities, Rochester Gas and Electric Corporation (RG&E), National Fuel Distribution Corporation, Corning National Gas Corporation, St, Lawrence Gas, Company, Inc., KeySpan Energy Delivery New York and KeySpan Energy Delivery Long Island.

Customers pay a non-bypassable system benefits charge (SBC) on their utility bills. A non-bypassable charge is a charge applied to all customer bills in a given region whether they receive service from a local utility or from a competitive supplier. The New York system benefits charge supports a comprehensive set of energy efficiency programs for customers, including residential, multifamily, low-income, commercial/industrial, and research and development programs. A state government authority, the New York State Energy Research and Development Authority (NYSERDA), administers the SBC programs. NYSERDA and its contractors implement energy efficiency programs. The NYPSC's June 2008 Order Establishing Energy Efficiency Portfolio Standard (EEPS) and Approving Programs (Case 07-M-0548) allows utility companies to administer some of the new, fast-track and expedited programs. Two public power authorities, the New York Power Authority and the Long Island Power Authority, also offer SBC-funded programs.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Alternative Business Models

Following an April 2007 order (Cases 03-E-0640 and 06-G-0746), electric and gas utilities must file proposals for true-up-based decoupling mechanisms in ongoing and new rate cases. All six major electric and all 10 major gas companies have revenue decoupling mechanisms in place.


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August 27, 2013


Reward Structures for Successful Energy Efficiency Programs

In 2008, the Commission established incentives for electric utility energy efficiency programs under the EEPS proceeding.  Energy savings targets for initial program years 2009 through 2011 were combined to create a single target as of December 31, 2011; Beginning in 2012, savings targets will be annual. For the 2009 through 2011 incentive period, a utility earns incentives or incurs negative adjustments for its electric or gas EEPS portfolio based upon the extent to which it achieved its energy savings targets during the years 2009 through 2011.  Maximum potential incentives/negative adjustments for each utility are calculated by multiplying $38.85/MWh for electric savings and $3.00/Dth for gas savings times the utility’s cumulative electric and gas energy savings targets for each portfolio.  If a utility achieves over 80% of a portfolio’s energy savings target, it earns an incentive scaled linearly from zero percent of the available incentive at an 80% achievement level up to 100% at a 100% achievement level.  Portfolio performance of 70-80% neither earns an incentive nor incurs a negative adjustment. Negative adjustments are calculated in a symmetrical manner to the incentives calculation with the full negative adjustment imposed at the 50% achievement level and decreasing linearly to zero percent at the 70% level.

In the 2012 through 2015 incentive period, the Commission established incentive pools totaling $36 million for electric utilities and $14 million for gas utilities, totaled over a four-year incentive period.  The incentive program provides a two tier incentive.  Utilities will be eligible for incentives not only for achievement of their own targets, but also for the achievement of statewide goals. This is intended to encourage utilities to act in cooperation with NYSERDA, which administers programs in all utility territories to enhance achievement of its targets as well. The amount for which each utility is eligible will be based on its proportional share of the utilities’ aggregate targets by the end of 2015.


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August 21, 2013


Energy Efficiency as a Resource

The New York State Energy Planning Board uses the energy savings information from the New York Energy Efficiency program evaluations in the development of periodic "State Energy Plans." These plans contain 20-year forecasts of energy demand and prices and assessments of available energy supplies including energy efficiency, renewable energy, electricity, natural gas, petroleum and coal.


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August 27, 2013


Evaluation, Measurement & Verification
  • Cost-effectiveness test(s) used: TRC
  • Uses a deemed savings database: yes.  A technical reference manual, which provides formulas and input and many input values for savings, is in use (Technical Reference Manual).

The evaluation of ratepayer-funded energy efficiency programs in New York relies on regulatory orders Case 07-M-0458 and Case 07-G-0141,). Both utilities and the New York State Energy Research and Development Authority (NYSERDA) administer the evaluation of programs. New York Evaluation Plan Guidance for EEPS Program Administrators is established for conducting evaluations. Statewide evaluations and evaluations for each utility are conducted. The Total Resource Cost (TRC) is used in New York and is considered to be the primary test for decision making. The rules for benefit-cost tests are stated in Case 07-M-0458 and Case 07-G-0141. The benefit-cost test is required at individual measure and customer program level screening, with exceptions for pilots, and new technologies.


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August 21, 2013


Energy Efficiency Resource Standards

Summary: Electric: 15% annual savings by 2015.  Natural Gas: ~14.7% annual savings by 2020.

 In 2008, the New York State Public Service Commission established the New York Energy Efficiency Portfolio Standard (EEPS) proceeding. As part of a statewide program to reduce electricity usage by 15% of the forecast levels by the year 2015, with comparable results in natural gas conservation, the Commission established interim targets and funding through the year 2011. The Commission required utilities to file energy efficiency programs, and NYSERDA, as well as independent parties, were invited to submit energy efficiency program proposals for Commission approval.

 Through a series of Orders, the Commission authorized the utilities (the six electric investor owned utilities previously authorized in the SBC proceeding, plus Corning National Gas Corporation, St, Lawrence Gas, Company, Inc., KeySpan Energy Delivery New York and KeySpan Energy Delivery Long Island) as well as NYSERDA to conduct EEPS programs. Since June 2008, the Commission approved over 100 electric and gas energy efficiency programs, along with rules to guide implementation and measure results. 

 In 2011, the Commission reauthorized a majority of the EEPS programs for the four-year period ending December 31, 2015, with revised targets and budgets where appropriate - NYSERDA was authorized to operate a limited number of programs through December 31, 2018. Additionally, three gas efficiency programs run by National Fuel Gas Corporation pursuant to its rate cases were consolidated into the EEPS program. The percentage of funding allocated to low-income programs was also increased. The order also suspended a portion of the program that provides utilities with financial incentives for achieving efficiency targets. These incentives were reinstated in March 2012 for the period 2012 – 2015.


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August 27, 2013