Fiscal Committee Testimony

By Francis J. Murray, Jr.

Francis J. Murray, Jr., President and CEO, NYSERDA
Testimony before the Legislative Fiscal Committees
Hearing Room B – Legislative Office Building
January 26, 2010

Opening Statement

Good morning Chairman Kruger, Chairman Farrell, Senator DeFrancisco, Assemblyman Hayes and members of the committees. Thank you for the opportunity to testify before all of you today on Governor David Paterson’s Executive Budget proposals as they relate to the New York State Energy Research and Development Authority (NYSERDA).

As you know, New York is facing a $7.4 billion budget deficit and a long-term structural deficit of $60.8 billion over the next five years. Both are addressed in Governor Paterson’s budget through necessary but very difficult decisions. The Governor has also laid out an aggressive economic recovery plan, and NYSERDA is playing a key role in its implementation.

At NYSERDA, we bring together the people, resources and funding for the clean energy world. We work with consumers, businesses, municipalities, and research institutions to create clean-energy strategies, practices, and products that will reduce our dependence on fossil fuels, promote economic development and protect the environment.

Through these efforts, we are working to fulfill Governor Paterson’s vision to create a stronger economy, based upon innovation and knowledge. NYSERDA is a catalyst for the clean energy sector, which will not only lead to a more sustainable environment and secure energy future, but will create new industries that will develop and manufacture clean energy products right here in New York State.

As a public authority supported by dedicated funding streams, we treat our responsibility to dedicate these limited funds with the upmost care to achieve the maximum benefit. As we look ahead toward the 2010-11 State Fiscal Year, there are three dynamics that are guiding us.

First, given the state’s current fiscal situation, we are working to ensure that NYSERDA’s investments are being used effectively to rebuild New York’s economy and create jobs in the growing clean energy sector. Over the past few years, energy has played an important role in economic development, and it will become an increasingly important instrument in the economic development arsenal in the future.

Second, with energy issues impacting the full spectrum of public and private sector entities, we realize the importance of working in partnership with all players. The legislature in particular has been an important partner by providing new initiatives that will help expand our efforts to create jobs across New York State.

And third, as we are working to strategically target funding from the federal stimulus program, the Regional Greenhouse Gas initiative and other sources, we are working to maximize the potential benefits of these funds to achieve both the legislature’s and the governor’s priorities.

So let me first discuss our role in the larger economy. Our investments further economic development through the full cycle of job creation, including research and development, commercialization, job training, and market support. The transition to a clean energy economy is a core component of the Governor’s New Economy Jobs Plan, and is expected to create tens of thousands of jobs in New York. NYSERDA is involved every step of the way.

By supporting the development and commercialization of new technologies, we are delivering significant economic benefits to the state, and creating clean-energy and green-collar jobs. Companies we have assisted have received national and international recognition for their innovations and their potential for growth. Moreover, the technologies developed most often have potential for wider applications and business success. In 2008, energy efficiency and clean energy commercial product sales that were developed through our research and development programs approached $250 million.

One of our newest initiatives is the Clean Energy Business Incubator Program, which offers support for clean energy entrepreneurs and early stage companies through professional networking, business advice and mentorship, technical support and technology transfer, entrepreneurial development and training, and access to angel and venture capital.

Over the past six months, NYSERDA has started four clean energy business incubation programs in Rochester, Syracuse, Buffalo and New York City that will provide this incubation and business acceleration support. Two more incubators in the Capital District and on Long Island are in the process of formation, bringing the total program to six incubators state wide with a four-year budget of $9 million. These incubators now house 17 clean energy companies in various early stages of development.

NYSERDA funds are intended to assist companies throughout the business startup and growth process, and to develop a financially self-sustaining program that will make New York a national center for developing clean energy technologies.

Our programs also help energy consumers – businesses, homeowners, non-profits, and local governments -- save hundreds of millions of dollars each year through energy efficiency. NYSERDA, working in partnership with the Public Service Commission, has the most sophisticated and far-reaching energy efficiency and research and development programs in the nation.

These cost-effective and award-winning programs encourage businesses to use demand response systems, greener buildings, energy efficient appliances, residential and commercial building improvements, clean energy technology development, and much more.

These programs have helped consumers save $600 million annually while reducing greenhouse gases by 2 million tons, the equivalent to removing about 400,000 cars from the State’s roadways every single year. And for every dollar New Yorkers invest through this program, two dollars in total economic and environmental benefits are realized.

Everyday, our programs put scores of New Yorkers to work. With a variety of incentives for installing renewable technologies and undertaking energy efficiency projects, we are helping make these improvements more affordable while creating demand for clean energy jobs in construction, energy auditing, and many other areas. Despite the challenging economy, we have experienced an unprecedented 70 percent increase in the number solar installation businesses established over this past year.

We continue to put building contractors to work. Our Home Performance with ENERGY® Star Program reached a record-breaking month in December as 716 homeowners took advantage of the Home Performance with ENERGY STAR® Program. This program, which has helped nearly 30,000 New York households cut their energy costs and reduce their carbon footprint, has been emulated by state programs around the country and is serving as a model for the national Home Star program, a proposal now being considered by the President and Congress for inclusion in the federal jobs bill.

Second, let me discuss our work with the Legislature and Governor to achieve our clean energy and job creation goals. Actions by the Governor and Legislature have provided critical support for these efforts. This spring, NYSERDA will be rolling out the green residential building program, a legislative initiative signed into law by the Governor in 2008. We also are working on developing the Green Jobs/Green New York program, which we will administer to help households and small businesses finance energy efficiency projects. We have our first advisory group meeting this afternoon. Also, we have partnered with New York City and others to apply for federal grant funds to help implement the Municipal Sustainable Energy Loan Program legislation enacted this past fall.

In addition to helping scores of businesses through our commercial and industrial programs, we also have helped other critical partners, including hospitals, municipalities, and schools, invest in their buildings and energy infrastructure to reduce their energy costs. In the end, these investments benefit all New Yorkers through a more reliable and environmentally-friendly energy system.

NYSERDA continues to work with Governor Paterson to implement his ambitious clean energy agenda to help improve our energy security into the future. The Governor has laid out his vision for the future of New York with a number of initiatives that put our State back on the path to prosperity. In December, Governor Paterson accepted the final 2009 State Energy Plan from the New York State Energy Planning Board. The Energy Plan provides a comprehensive blueprint for New York to continue to transition to a clean energy economy over a 10-year planning horizon, and is the first State energy plan since 2002.

The recommendations and specific action items in the energy plan will make energy more reliable, secure and affordable for New Yorkers, address the threat of climate change and result in a cleaner environment. The plan identifies a number of specific policy initiatives that set forth a vision for a robust and innovative clean energy economy that will stimulate investment, create jobs and meet the energy needs of residents and businesses over the next ten years.

All of our programs today are guided by the ambitious energy goals set by Governor Paterson to significantly reduce our energy use and increase our energy security. We are concentrating a great deal of our resources on Governor Paterson’s “45 by 15” initiative, the most aggressive clean energy program in the nation. The goal of the initiative is that by 2015, 30% of the electricity consumed by New Yorkers will be generated by renewable resources, while at the same time reducing overall projected electric consumption by 15%. In these efforts, the Public Service Commission has been an invaluable partner. The commission’s recent expansion of the state’s renewable generation program not only comes at a critical time for the renewable energy industry in New York, it also puts New York on track to achieve the “45 by 15” clean energy goal.

And finally, I would like to inform you about our work in allocating funding from the RGGI auctions and the federal government. In these times of decreasing resources, we are working to maximize opportunities through every funding source. Last week, NYSERDA held a meeting of the RGGI Operating Plan Advisory Group to discuss the development of a revised operating plan proposal, as well as revisiting the revised budget assumptions in light of the Green Jobs/Green New York bill, and the contribution of RGGI monies into the State’s General Operating Fund.

NYSERDA is administering several programs under the American Recovery and Reinvestment Act (ARRA) to help stimulate our economy, create jobs, assist local governments, and improve our environment. These programs represent more than $140 million of funding to support energy efficiency and renewable energy projects for local governments, schools, hospitals and not-for-profits.

Under the State Energy Program portion of ARRA, NYSERDA is providing $74 million through competitive grants for energy efficiency, renewable energy, and clean fleet projects for schools, hospitals, local governments, public colleges, and not-for-profits; $5 million for technical studies for these sectors; $25 million for capacity based PV projects and to support LIPA’s innovative power purchase program; and $4 million for training and support to assure compliance with New York’s New Energy Code.

To date, NYSERDA has awarded projects representing approximately $61 million and is in the process of executing 318 contracts for these funds. This includes $24 million for 87 projects at schools, hospitals, local governments, colleges and not-for-profits, as well as $10 million awarded to eight companies for installation of PV systems at hundreds of New York homes and businesses. Solicitations have been issued for an additional $54 million and all awards will be made during the first quarter of 2010.

An additional $18 million will be available in February to provide rebates that will encourage 170,000 New Yorkers to trade in their old appliances for new, energy-efficiency appliances.

Although few jobs have been created to date through the program, we expect that hundreds of jobs will be created or retained through the ARRA funding. At this point, while the bulk of the projects have not yet commenced, we are pleased to report that that all the federal stimulus dollars NYSERDA is administering are either under contract, awarded to proposers, or out on the street as competitive solicitations.
We look forward to these funds going out into communities over the next few months. All of these funds are awarded competitively to ensure that the most worthy projects are funded, though we work to ensure geographic equity through the distribution of these federal funds.

In every region of New York State, NYSERDA has helped businesses, municipalities and not-for-profits increase their energy efficiency and maximize their potential for improving our environment. While we have helped thousands of small- and medium-sized companies, we’ve also helped some of the largest companies and most prestigious organizations in this state reduce their energy use. These include the United States Tennis Center in Queens; the New York Times building in Midtown Manhattan; Aviator Sports in Brooklyn; Bard College in the Hudson Valley; General Electric’s Wind Energy Center and Battery manufacturing plant in Schenectady and its digital mammography production center in East Greenbush; Alcoa in the North Country; Welch Allyn in Central New York; Cornell University’s combined heat and power plant; Syracuse University’s construction of the world’s greenest and most efficient data center; Corning Glass in the Southern Tier; and the Ford Motor Company in Western New York. NYSERDA has partnered with each of these organizations to improve the efficiency of their operations and lowering their cost of doing business, while reducing their impact on the environment.

Let me close by saying the staff of the Authority is committed to serving the needs of New York’s energy consumers, and we look forward to a busy and productive year in 2010. We stand ready to work with the Governor, the legislature, our many stakeholders and partners in building a clean, sustainable, and efficient energy future.

Again, thank you for the opportunity to testify before your committees. I would be happy to take any questions you may have.

Overview

Created by legislation in 1975, NYSERDA is a public benefit corporation dedicated to developing and deploying innovation and technology to solve New York’s most difficult energy and environmental problems.

Over the last decade, NYSERDA has leveraged its organizational strengths to assume several new responsibilities to address the State’s energy needs.

In 1998, adding to its already “best in class” research and development programs, NYSERDA assumed responsibility for energy efficiency efforts that were previously administered by the utilities. The System Benefits Charge (SBC) program is funded in the same manner, but at a lower amount, as the programs that were previously administered by the utilities. Of the monies received through the SBC, 95% of the funds have been committed to projects.

In 2004, NYSERDA began administering renewable energy program funds - the Renewable Portfolio Standard (RPS) - dedicated to increasing the proportion of renewable generated electricity used by New York consumers. This was a new assessment with a single statewide administrator, which was identified at the time as the best method for ensuring that the State could get the greatest amount of renewable resource penetration with a single statewide administrator.

In 2008, the Public Service Commission increased funding for energy efficiency efforts through its Energy Efficiency Portfolio Standard (EEPS) proceeding, which will be delivered by both the investor-owned electric utilities and NYSERDA.

We are in the process of finalizing plans for new programs and initiatives to be funded through the sale of pollution allowances under the Regional Greenhouse Gas Initiative (RGGI). This includes the Green Jobs-Green New York program that was enacted into law last year.

The New York Battery and Energy Storage Technology Consortium (NY-BEST™) is an industry-focused coalition working to build a vibrant, world-class, advanced battery, and energy storage sector in New York State. NY-BEST is operating under the guidance of NYSERDA and will be supported with approximately $25 million in seed funding through the sale of pollution allowances under the Clean Air Interstate Rule. NY-BEST builds upon New York’s existing energy storage cluster of companies and research capabilities.

We have met these increasing responsibilities and challenges by continuing to follow principles which have been cornerstones of NYSERDA operations since its inception. Our programs are implemented through competitive contract selection processes which involve outside experts serving on technical evaluation panels. The results of these contract awards are published in reports available to the public on our website to provide full transparency and accountability. We administer our programs by relying on stakeholder input, and by structuring programs which work through energy market participants.

In addition, our programs undergo rigorous annual evaluation of program results, including review and reporting from independent evaluation contractors who report directly to our funding sponsors. These evaluation efforts ensure that our programs are delivering results and that the results are accurate. Our programs also undergo annual independent audit. Lastly, our programs have been subjected to six audits by the Office of the State Comptroller over the last six years, including two audits completed in 2008. In each case these audit reports found that NYSERDA was effective in administering its programs.

Ratepayer funds used to implement the SBC, RPS and EEPS programs are collected from the electric customers of Consolidated Edison, Orange and Rockland, Central Hudson, New York Electric and Gas, the upstate territory of National Grid, and Rochester Gas and Electric. The funding for these programs has been ordered by the Public Service Commission after open public comment processes subject to the Public Service Law.

These funds are not collected from the customers of electric cooperatives, municipal utilities, the municipal customers of the New York Power Authority (NYPA), or the customers of the Long Island Power Authority (LIPA), who are outside the purview of the Public Service Law. In effect, these entities have their own energy efficiency and clean energy programs to meet the needs of their customers.

NYSERDA is nationally recognized for its expertise and ability to address today’s energy, environmental and economic challenges. Our program activities target opportunities across the entire continuum of energy technology development and the full spectrum of energy fuels and uses, ranging from research and development to the deployment of new energy technologies; from energy efficiency to renewable sources of energy; from low-income assistance to education initiatives; and from market transformation to environmental preservation efforts. These programs are also helping to build New York State’s economy by lowering energy consumption, improving energy efficiency, increasing productivity, growing jobs and, creating a sustainable, clean energy economy, which create new opportunities for job-seekers, entrepreneurs and businesses of all sizes.

Our programs - and the energy efficiency programs that NYPA and LIPA deliver on behalf of their customers - have become critical to the reliability of the state’s electric system. The investments to date have deferred the need for the equivalent of four medium sized power plants, while reducing the harmful impact of air emissions and water pollution that threaten people’s health and our environment. Our programs have created and retained thousands of jobs. In fact, we have been building the “green collar” work force long before the term was coined and we continue to develop cutting-edge programs that states throughout the country are emulating.

In addition to the energy reliability, environmental and economic development benefits of clean energy programs, energy efficiency and renewable energy activities provide a key mechanism to helping control energy costs for consumers. As was recently demonstrated in the State Energy Plan, achievement of the “15 by 15” energy efficiency policy goal is expected to reduce the net retail cost of electricity, resulting in aggregate annual bill savings to ratepayers of $600 million to $1.4 billion. With respect to renewable energy programs, achievement of the “30 by 15” renewable energy policy goal is expected to result in aggregate annual bill savings to ratepayers of $93 million to $262 million. These analyses demonstrate net benefits to ratepayers, taking into account the program costs to implement the programs, both in high- and low-cost scenarios. These dramatic impacts will serve as a strong rationale for the continued reliance on these resources to meet our future energy needs.

Programs appropriated through the budget

In addition to the funds administered on behalf of the Public Service Commission, a portion of NYSERDA’s budget is comprised of funding approved through State Budget appropriations. These dollars include support for the following:

With respect to appropriations funded through electric and gas utility assessments under Section 18-a of the Public Service Law, approximately $10 million helps support energy research and development at NYSERDA. Our research and development function is critical to producing deployable solutions to our energy and environmental challenges, while simultaneously providing economic development opportunities for emerging technologies in New York State. In addition, approximately $4 million supports energy policy and planning, and NYSERDA will continue to play an active role in the State’s efforts to routinely develop a statewide energy plan through the re-authorized Article 6 of the Energy Law.

The Budget also includes funding for sub-allocation to the University of Rochester Laser Fusion Lab program of $691,000 and sub-allocation to the Department of Environmental Conservation for its climate change program totaling $1 million.

Reappropriations

There are also $72.5 million in reappropriations contained in the Urban Development Corporation budget for various NYSERDA administered programs funded in the FY06-07 State Budget. These dollars are committed to cellulosic ethanol pilot production facility development; energy and environmental programs such as E85 fueling stations, advanced vehicle R&D, hydrogen transportation and plug-in hybrid vehicles; and investments in energy conservation and efficiency pilot programs.

NYSERDA has received 122 applications from retail gas stations interested in installing E85 or B20 fueling equipment, and has committed or spent about $2.2 million. Fifty of these stations are currently selling E85 fuel to their customers, with four also offering B20. The remaining 72 stations are in process. NYSERDA plans to more broadly market this program in 2010, with the goal of establishing 300 retail biofuels stations.

In addition, approximately $900,000 has been awarded to six petroleum terminal companies in New York State for bio-fuels blending and storage equipment. These companies serve as local sources for distribution of the biofuels to the retail stations.

West Valley

Under NYSERDA’s West Valley Program, the 2010-2011 state budget provides $19.2 million to meet New York’s obligations at the Western New York Nuclear Service Center, the site of the West Valley Demonstration Project.

NYSERDA holds title to the Center on behalf of the State. The Center is the location of a former nuclear fuel reprocessing and radioactive waste disposal operation in Cattaraugus County. Under the West Valley Demonstration Project Act, the U.S. Department of Energy and NYSERDA are working together on a multi-billion dollar cleanup of the highly contaminated facilities at the Center. As required under the federal act, NYSERDA contributes 10% of the total project cost. New York also recently agreed to settle litigation with the federal government to allocate cleanup costs not covered by the Demonstration Project Act, including financial responsibility for one of the Center’s radioactive waste disposal sites, the 15 acre State-Licensed Disposal Area.

NYSERDA’s mission at the Center is to protect our neighbors, our workers, and the environment, while at the same time making sure that USDOE honors its obligations for the West Valley Demonstration Project cleanup. To date, New York State and the federal government have successfully completed a number of significant and challenging cleanup activities at West Valley, including the solidification of liquid high level radioactive waste into glass logs. This spring, the State and Federal governments will be making decisions on the path forward on the decommissioning phase of the cleanup. This is important work will represent another significant step forward in cleaning up the site.

Approximately $2.5 billion has been spent on the cleanup over the last 25 years, including more than $250 million from New York State. NYSERDA’s 2010-2011 West Valley Site Management Program budget is $19.2 million, an increase of just under $6 million from 2009-2010. The increase is due to increased federal spending at the site through the American Recovery and Reinvestment Act (we pay 10% of the federal expenditure), and increased costs associated with non-Demonstration Project cleanup activities, including replacing the impermeable cover on the State-Licensed Disposal Area.

Energy Efficiency Programs

For the most part, however, NYSERDA’s energy efficiency, renewable technology, and clean air programs are supported by funds that are not appropriated in the state budget. The following is an overview of those programs.

NYSERDA, working in partnership with the Public Service Commission, has perhaps the most sophisticated and far-reaching energy efficiency programs in the nation, which are funded by a system benefits charge, or SBC, valued at about $175 million per year. These cost-effective and award-winning programs are the foundation of the work we do and include demand response programs, green buildings, energy efficient appliances, residential and commercial building improvements, clean energy technology development, and much more.

On top of the half billion dollars in annual customer savings, the programs have reduced greenhouse gases 2 million tons on an annual basis, which is the equivalent to removing about 400,000 cars from the State’s roadways. And for every dollar New Yorkers invest through this program, two dollars in total economic and environmental benefits are realized.

These programs have become a critical component of overall system reliability, especially in the transmission-constrained downstate region of the State. They also provide significant customer savings. Through September 2009, the System Benefits Charge programs provide 3454 GWh of annual energy savings, saving customers over $620 million annually on their energy bills, and have created or retained approximately 4,700 jobs. In addition, the program has permanently reduced energy consumption by 755 megawatts, and our peak load reduction program – which is implemented during periods of highest electric use -- can curtail an additional 590 megawatts thereby protecting the electric system during the most vulnerable times.

In partnership with the Public Service Commission, NYSERDA works with utilities and other entities to administer the Energy Efficiency Portfolio Standard (EEPS), a multi-faceted energy efficiency initiative. With a goal of reducing electric usage by 15 percent of projected levels by 2015, the EEPS will cut greenhouse gas emissions, reduce customers’ electric bills, stimulate economic development, and create jobs in the clean energy sector for New Yorkers. NYSERDA is committed to ensuring the success of the Energy Efficiency Portfolio Standard, one of the most aggressive energy efficiency programs in the nation.

The programs NYSERDA administers under EEPS include both natural gas and electric measures and target multiple sectors including Residential, Multifamily, Low-income, Large Industrial, Commercial, as well as Workforce Development programs that focus on preparing New York workers for green-collar and clean-energy sector jobs. The aligned NYSERDA programs include both new initiatives and enhancements of existing program offerings.

Renewable Portfolio Standard

The Renewable Portfolio Standard, or RPS, administered by NYSERDA, is recognized as a critical part of New York’s efforts to lessen our heavy dependence on fossil fuels and reduce harmful air emissions. Governor Paterson’s 45 by 15 initiative is the most aggressive clean energy program in the nation. The goal of the initiative is that by 2015, 30% of the electricity consumed by New Yorkers will be generated by renewable resources, while at the same time reducing overall projected electric consumption by 15%. Through the RPS, NYSERDA stimulates and supports a myriad of projects that include hydropower, wind, biomass, solar, and other eligible technologies.

NYSERDA has designed and implemented the RPS program to adhere to three key principles:

1. transparency
2. competitive and objective project selection
3. cost-effective administration.

Including pending contracts resulting from a recently completed fourth competitive solicitation for large-scale, grid-tied renewable resources, NYSERDA will have contracted with thirty-three new renewable facilities. The total new capacity associated with these 33 facilities is approximately 1,307 MW. Of this capacity, approximately 1,143 MW are operating and 164 are under construction or awaiting interconnection. This includes 1,199 MW of wind, 72 MW of biomass, and 36 MW of hydroelectric. Wind capacity in operation is already almost 25 times the 48 MW that existed just 3 years ago. These new facilities have the capacity to produce upwards of 3.8 million MWh of energy per year, or enough electricity to supply about 635,000 average homes. Of this total production capability, NYSERDA will have contracted for 3.4 million MWh, or 34% of the RPS program goal.

The total economic benefits associated with a cumulative program funding commitment of about $569 million are valued at over $4 billion over the next twenty years. If the energy expected to be generated by these new renewable resources is instead generated by the system-wide mix of conventional, non-renewable generating resources, New York would experience an increased release of emissions amounting to 2,600 tons of nitrogen oxide, 5,200 tons of sulfur dioxide, and 1.9 million tons of carbon dioxide per year.

The Customer-Sited Tier of the Renewable Portfolio Standard supports grid-connected, “behind-the-meter” renewable resources that produce electricity for use on site. Four resources are currently supported by the CST: anaerobic digester gas-to-electricity, fuel cell, solar photovoltaic, and small wind. For PV specifically, demand for PV incentives has been growing steadily since 2003. Between 2008 and 2009, applications for PV incentives more than doubled from $27 million in 2008 to $61 million in 2009 -a 125% increase. These incentives have benefited 882 residents, 235 businesses, and 204 not-for-profit institutions throughout New York. This growth has both increased the use of a sustainable energy source and strengthened the state’s clean energy economy with a more than 70 percent increase in the number of contractors participating in the program.

Clean Energy Research and Development

Our Clean Tech Center Program offers support for entrepreneurs and early stage companies through incubation, acceleration, and retention. Over the past months, NYSERDA has awarded $6 million to establish four clean energy business incubators in Rochester, Syracuse, Buffalo and New York City that will provide business support to accelerate the successful development of early-stage, clean energy technology companies.

NYSERDA funds are intended to assist companies throughout the incubation process, and to develop a financially self-sustaining program that will make New York a national center for developing clean energy technologies. In 2008, energy efficiency and clean energy commercial product sales that were developed through NYSERDA research and development programs easily approached $250 million.

Regional Greenhouse Gas Initiative (RGGI)

New York is also a member state in the Regional Greenhouse Gas Initiative (RGGI), a first in the nation initiative established to reduce greenhouse gases. RGGI is a carbon cap and trade program adopted by ten northeast and Mid-Atlantic States. Under regulations promulgated by the Department of Environmental Conservation and NYSERDA, allowances to emit carbon dioxide in New York are sold as new commodities at competitive auction. NYSERDA worked with the DEC, DPS and the other RGGI states to develop a regional auction platform for the sale of the RGGI allowances, and is serving as the model for the creation of a national program.

New York has participated in five RGGI auctions, and has received a total of approximately $180.7 million in auction proceeds. Pursuant to NYSERDA regulations, in April of 2009, NYSERDA’s Board of Directors approved an Operating Plan that articulated how proceeds collected through March 31, 2012 would be used to implement a variety of energy efficiency, renewable energy and carbon-abatement programs across New York.

NYSERDA is currently working with its partner agencies and stakeholders to revise the original Operating Plan to accommodate a variety of factors including: the recently enacted Green Jobs/Green NY Act, the transfer of $90 million to the General Fund as part of the State’s overall deficit reduction measures, the development of a consent decree for RGGI litigation, the recent reduction in CO2 allowance prices, and the availability of new funding sources such as the American Recovery and Reinvestment Act.

The revised plan includes programs that promote energy efficiency, energy bill savings, emissions reductions, clean technology development and green job creation across all sectors of New York’s economy. Over the next three years, the proposed plan would provide:

• $188.7 million to the Residential, Commercial, Industrial and Municipal sector;
• $51.0 million to the Power Supply & Delivery sector;
• $34.5 million to the Transportation sector;
• $4.5 million to the Agriculture & Bio-energy sector; and,
• $23.0 million for Clean Technology and Industrial Development and for Climate Research and Analysis activities that include the development of a New York State Climate Action Plan.

The Residential and Commercial components of the plan include $112 million for implementing the Green Jobs/Green NY Act. After accounting for the statutory allocation for administration and evaluation expenses, seventy percent of these funds will be dedicated to the residential sector and thirty percent for small businesses. Within these allocations, funds to support energy audits, workforce development, outreach, financing initiatives and the other activities described in the Act will be provided. As specified in the Act, NYSERDA has created an Advisory Council to provide input on how to implement the program.

As mentioned previously, the RGGI Advisory Group convened on January 13th to provide input on the proposed changes to the plan. The Advisory Group consists of stakeholders representing a broad array of energy and environmental interests and includes representatives from both the Senate and Assembly energy and environmental conservation committees. Advisory Group and public stakeholder feedback will be reviewed and integrated into a final proposal that will be provided to NYSERDA’s Board for approval during the late February to early March timeframe. We are preparing to commence broad program implementation soon thereafter.

Combined Heat and Power (CHP)

NYSERDA has a suite of Combined Heat and Power (CHP) programs which work in unison to support the marketplace in a variety of ways. Combined Heat and Power is on-site generation of electric power utilizing both the electrical power and steam or hot water which is created. The CHP Demonstration Program has been in existence since 2000; its mission is to support projects which pioneer solutions to CHP challenges, to showcase successful models for others to follow, and to recognize marketplace patterns.

Collectively, these programs are sponsoring 174 projects to install CHP systems, which comprise 215 MW of new generating capacity. One-third of these projects are operational, the remainder are in design or construction phases. NYSERDA has committed $114 million to support these projects with the partnering sites contributing $463 million, representing $577 million of total construction in NYS.

Twenty-five projects are at sites which will serve as facilities of refuge, including hospitals, schools, nursing homes and are designed to be able to operate even during a grid outage. Additionally, 10 projects are at sites of essential public service such as food distribution centers, waste water treatment plants, regional telecommunication switching centers, governmental emergency command posts, which are also designed to be operable during a grid outage.

Workforce Development

NYSERDA works with a network of universities, community colleges, labor unions and BOCES to deliver state-of-the-art workforce training programs. Over 1750 participants have completed residential energy efficiency training at the Center for Energy Efficiency and Building Science (CEEBS). In the area of clean energy training, NYSERDA funding has supported approximately 1650 participants in New York State. This includes 1311 participants in PV training such as certification preparation course for North American Board of Certified Energy Practitioners (NABCEP), Introduction to PV Technology, PV Installers, and Electrical Theory courses. An additional 210 have been trained in solar thermal, solar sales, and solar hot water courses, and 122 participants have completed geothermal and small wind training.

Our funding has supported the training of 3133 workers in the Commercial/Industrial sector. Approximately one third of these (1076 participants) have received NYSERDA incentives for successfully completing professional certification in energy-related areas such as energy auditing, building operator certification, lighting design, lighting quality, and lighting control technologies. The balance of just over 2000 workers have completed building technology training such as green building design and operation, data center efficiency, commercial kitchen equipment efficiency, and other technology training such as HVAC, Motors, and lighting efficiency.

American Recovery and Reinvestment Act (ARRA) Funds

The availability of ARRA funds has allowed us to address several of the Governor’s priorities to support development of a Clean Energy Economy for New York State, to foster job creation, and to help municipalities, schools, and other institutions reduce their costs through sound energy practices.

NYSERDA itself has applied for approximately $420 million in funds from the American Recovery and Reinvestment Act of 2009. Funding programs include formula grants such as the State Energy Program (SEP), the Energy Efficiency and Conservation Block Grant (EECBG), and the State Energy Efficient Appliance Rebate Program (SEEARP), as well as competitive solicitations supporting CHP, building retrofits, energy efficient building technologies, alternative fuel and vehicle electrification, and Clean Diesel programs. Some programs involve multiple applications, participants, and virtually hundreds of projects. For example, NYSERDA submissions for three Clean Diesel programs included 17 applications and over 230 projects; our submission for a CHP program included one application with 25 participants.

To date, NYSERDA as an applicant has been directly awarded approximately $186.7M in funds under five programs to be dispersed statewide; several applications representing millions of dollars of potential new funding are still pending award by DOE. The five programs and a brief synopsis of each follow:

State Energy Program Formula Grants (SEP) ($123 million)

SEP provides $74 million through competitive grants for energy efficiency, renewable energy, and clean fleet projects for schools, hospitals, local governments, public colleges, and not-for-profits; $5 million for technical studies for these sectors; $25 million for capacity based PV projects and to support LIPA’s innovative power purchase program; and $4 million for training and support to assure compliance with New York’s New Energy Code.

To date, NYSERDA has awarded projects representing approximately $61 million and is in the process of executing 318 contracts for these funds. This includes $24 million for 87 projects at schools, hospitals, local governments, colleges and not-for-profits, as well as $10 million awarded to 8 companies for installation of PV systems at hundreds of New York homes and businesses. Solicitations have been issued for an additional $54 million and all awards will be made during the first quarter of 2010.

Minimal jobs have been reported to date through the program since the bulk of the projects have not yet commenced.

Energy Efficiency and Conservation Block Grants (EECBG) ($29 million)

This program is providing $24 million through competitive grants for small municipalities for energy efficiency, renewable energy, transportation efficiency, and material conservation projects. A solicitation has been issued and proposals are due in February. A regional allocation will assure that small municipalities from throughout the state have an opportunity to receive funds through this program. Projects and their job creation potential will be implemented during 2010 and 2011.

This funding is in addition to the $145 million awarded by DOE directly to New York’s 45 largest municipalities. These municipalities are using funds to address their local priorities.

State Energy Efficient Appliance Rebate Program (SEEARP) ($18.75 million)

Provides consumers who own their own appliances with rebates for purchasing certain energy-efficient refrigerators, clothes washers, freezers and dishwashers. Offers a larger rebate to consumers who recycle their old appliances.Will be offered through appliance retailers across New York during President’s week. Program is expected to be very popular and money should flow quickly

Enhancing State Government Energy Assurance and Planning for Smart Grid ($1.98 mllion). NYSERDA is coordinating a multi-agency effort to develop an energy assurance plan for New York that anticipates existing and emerging risks to its energy systems and develops plans, policies, training, and responses that minimize the likelihood and consequences of disruption to its energy supply.

Clean Cities Projects for the Transportation Sector ($13.2 million)

A competitive grant awarded to NYSERDA for alternative fuel vehicles (AFVs) and infrastructure. Funds will be used for 40 sub-projects to purchase 376 alternative fuel vehicles, 103 fueling/charging stations, conduct an AFV training program, and a firefighter training program for biofuel fires. Projects will be completed by the end of 2011. NYSERDA also lent substantial support to public and private industry, academic leaders, utilities, state organizations, generators, and end-users all looking to put Recovery Act dollars to work for New York State.

NYSERDA provided Letters of Support for new projects (and additional NYSERDA funds in the event of an award) that have resulted in at least $37.1M in ARRA funds for NYS to date. This dollar figure does not include pending projects involving several millions, nor does it include an unspecified amount by which New York will benefit from the Ford and Chrysler programs under the Transportation Electrification effort.

NYSERDA also provided Letters of Support allowing current NSYERDA projects to be used for the cost share requisites of the ARRA. Another $29.5M in ARRA funding has come to NYS by way of these projects. NYSERDA Letters of Recommendation (involving no current or additional NYSERDA funding) encouraged an additional $12M in ARRA awards, with several still outstanding.

It should also be noted that New York State is the recipient of approximately $261.7M in ARRA funds for the purposes of Smart Grid Projects. This entire program area received significant and invaluable assistance from the Smart Grid Consortium, which was established in collaboration with numerous New York organizations and considerable investment from NYSERDA. In addition, one Smart Grid project, granted $29.6M in ARRA funds, received NYSERDA support in the form of a Letter of Support allowing cost share from a current NYSERDA project.