We will work with the State and utilities to centralize planning for the city's supply and demand initiatives
There is a clear need for a more comprehensive, coordinated, and aggressive planning effort, focused on the specific needs of New York City. That is why we are pursuing State legislation and regulation to establish a New York City Energy Planning Board. (See chart above: Proposed New York City Energy Planning Board; see case study: Long Island Power Authority)

Functions
Comprehensive planning: This entity's primary function would be to review and approve energy plans that include supply and demand strategies to meet the city's needs. This plan would be submitted to the Public Service Commission (PSC) for regulatory and funding approval.

To ensure that these plans are revised regularly, we will urge the State to pass a new energy planning law similar to Article VI, which lapsed four years ago. Article VI required the periodic issuance of a State Energy Plan that assessed capacity needs and identified strategies to meet or manage demand. We believe the law should additionally require the development of localized plans across the state, and should take into account not only peak demand capacity, but also energy consumption, costs to rate payers, environmental impact, and greenhouse gas emissions.

In addition to overseeing the creation of New York City's energy plan, the Board would recommend any necessary ratepayer charges for the fulfillment of its plan to the PSC.

Reducing demand: The Board would set demand reduction targets as part of the city's overall energy plan, recommend funding levels and approve strategies for reaching those goals. A new authority will also be created dedicated to the coordination and implementation of energy efficiency initiatives in New York City.

This authority, a partnership among the organizations involved with energy efficiency programs in New York, would be responsible for developing plans to meet the Board's targets.

Expanding supply: The Board would also set supply targets and recommend a budget for spending on supply initiatives. The Board would facilitate the supply of new clean power to the city by enabling a process to issue long-term contracts to energy supply developers. These contracts would provide a constant revenue stream to pay off investment costs. As a result of this security, power plant owners would be able to attract investors at better financing rates.

One way long-term contracts could be issued is for the State to empower the New York Power Authority (NYPA) or another existing entity to issue and award a power supply request-for-proposals (RFP) that reflects the city's priorities and needs. NYPA already performs this service for government institutions located in the city, including our municipal government, the Metropolitian Transportation Authority (MTA), and the New York City Housing Authority (NYCHA).

Board structure: To ensure a range of perspectives and technical experience, the proposed Board would include representatives from the City, the State, and the utilities.

The City and State representatives would ensure that their respective public policy priorities are reflected in the planning process. The City's representative would also articulate local community perspectives, including environmental justice concerns.

The representative from Con Edison would leverage the company's technical capabilities, understanding of grid and reliability issues, and familiarity with energy efficiency programs to shape the city's electricity and steam plans. Both Con Edison and KeySpan would create their own plans for gas demand and supply.

Additional regulatory changes to promote coordination and to increase investment
There are four additional regulatory changes that will help maximize the coordination between energy efficiency and supply efforts and generate new funding sources.

Today, utilities like Con Edison profit from the volume of energy consumed. In order to encourage greater participation with our energy efficiency efforts, we must separate Con Edison's profits from the amount of energy used in the city and replace it with incentives for reducing demand.

We will also advocate for the creation of a forward capacity market, which pays upfront for future capacity. Under this system, developers can secure prices years in advance, creating a level of financial assurance for backers since they know their initial rates of return. This guarantee can also be applied to energy efficiency strategies; programs that pledge a peak reduction can secure payment as if they were selling additional supply. The money can be invested into further efficiency efforts, providing a new revenue stream for reductions into the future.

The Regional Greenhouse Gas Initiative, a multi-state cap and trade program to reduce greenhouse gas emissions from power plants, could potentially bring millions of additional dollars to energy efficiency initiatives in New York. Starting in 2009, greenhouse gas credits will either be given, sold or auctioned to generators. Generators that use less than their allotted amount will be able to cash in the excess credits; those who need more will be able to buy them from the market. The City will continue to advocate that all of these credits are auctioned to power generators, forcing power plants to purchase credits for each ton of carbon dioxide they produce. This money could then be used to finance more energy efficiency efforts.

Finally, we will advocate for an energy planning law similar to Article VI, which lapsed four years ago, to be implemented on a statewide level. This law would serve as a complement to the New York City Energy Planning Board since energy planning for areas adjacent to the New York metropolitan area, such as the lower Hudson Valley and Long Island, can affect the city. Reducing transmission congestion could reduce prices in the city as well as regional CO2 and other emissions. Therefore, the City will urge passage of a new State planning statute to accomplish these aims.

Progress (as of 4/22/08):
The City submitted a proposal for a New York City Energy Planning Board as part of the Albany legislation submitted in May. The City also filed comments advocating for the Board in June through the Long-Range Electric Resource Plan and Infrastructure Planning proceeding at the NYS Public Service Commission (PSC). The City continues to advocate for the passage of the legislation and to advocate before the PSC for improved long-range planning.

Progress (as of 10/22/08):
The New York City Energy Policy Board (NYC EPB) held its kick-off meeting on August 20. Members include the Governor’s Office, the New York Power Authority, Con Ed, National Grid, the New York City Economic Development Corporation, and the Mayor’s Office of Long-Term Planning and Sustainability.