New York Signals Continued Support for Energy Storage as Governor Signs Procurement Target Legislation
On November 29, 2017, New York Gov. Andrew Cuomo (D) signed Assembly Bill A6571. Passed by the New York legislature in June 2017, this legislation directs the New York Public Service Commission (PSC) to undertake two efforts: (1) institute a proceeding to establish the Energy Storage Deployment Program within 90 days; and (2) set a target by January 1, 2018, for the installation of qualified energy storage systems across the state by 2030.
Energy Storage Development Program: The PSC must establish the Energy Storage Development Program that the New York State Energy Research and Development Authority (NYSERDA) and the Long Island Power Authority (LIPA) will administer “to encourage the installation of ‘qualified energy storage systems.’” Under this legislation, a “qualified” energy storage system is one that uses commercially available technology (including mechanical, chemical, or thermal technologies) that can absorb energy, store it for a period of time, and dispatch cost effectively in a manner that advances at least one of the following goals:
- Assists in the integration of variable energy resources;
- Reduces emissions of greenhouse gasses;
- Reduces demand for peak electrical generation;
- Defers or substitutes for an investment in generation, transmission, or distribution assets; or
- Improves the reliable operation of the electrical transmission or distribution grid.
Installation Target: In consultation with NYSERDA and LIPA, the PSC must set a target for the installation of “qualified energy storage systems” throughout the state by 2030. The PSC must establish a formal proceeding to consider this Energy Storage Deployment Program within 90 days of the effective date of the statute. The legislation directs the PSC to consider several factors, including:
- The establishment of the Energy Storage Development Program;
- The estimated annual expenditures associated with the program for each calendar year from 2018 through 2030;
- Avoided or deferred costs associated with transmission, distribution or capacity;
- Minimization of peak load in a constrained area; and
- Storage systems connected to customers’ facilities or connected directly to transmission or distribution facilities.
The PSC’s January 1, 2018 deadline for establishing the 2030 installation target may slip. Although the legislature passed the bill in June 2017, Gov. Cuomo signed the bill into law only one month remaining. Moreover, Governor Cuomo’s approval memorandum explained that the legislation as drafted may not be consistent with New York’s Reforming the Energy Vision (REV) strategy. Governor Cuomo stated that he would like to resolve his concerns with the bill’s fiscal commitments through the annual budget negotiations with the legislature. His signing memo further explained that his administration has agreed with the legislature to pass legislation in the upcoming session to address his substantive concerns, which may indicate that Gov. Cuomo’s administration will have a more active role in crafting the ultimate direction of the state’s energy storage policy. Despite the uncertain timing of the installation target’s implementation, Gov. Cuomo’s support continues the trend of encouraging energy storage development in New York.
Given the uncertainty in how New York and its agencies will develop and implement the energy storage target and the interplay between the Energy Storage Development Program and REV, stakeholders will want to monitor how the PSC implements these legislative mandates. Considering the PSC’s March 2017 directive requiring the state’s utilities to install at least two energy storage projects at separate substations or feeders, however, the signing of this legislation sends a strong signal that New York is committed to increasing energy storage deployments within the state.