The New York Public Service Commission (“PSC”) issued an Order on December 19, 2013 reallocating $165.6 million from existing energy efficiency programs to fund the initial capitalization of Governor Andrew Cuomo’s proposed $1 billion Green Bank. The Green Bank’s goal is to promote clean energy technologies by attracting private capital through a variety of sustainable public/private financing arrangements that will eliminate current market barriers that make economically viable clean energy projects currently not financeable.
The Green Bank will operate as a division of the New York State Energy Research and Development Authority (“NYSERDA”). It will be led by an Executive Director and include an Advisory Committee composed of experts in the field to advise the Green Bank and NYSERDA as well as an Investment Committee composed primarily of NYSERDA employees to review investment decisions and policies.
The PSC’s Order is a response to a petition submitted in September 2013 by NYSERDA. The PSC solicited comments in response to NYSERDA’s petition through October 28, 2013 before issuing the Order authorizing the Green Bank initial capitalization.
The reallocated monies will come from NYSERDA’s Energy Efficiency Portfolio Standard (“EEPS”) I and System Benefits Charge (“SBC”) III funds, uncommitted utility EEPS funds, and NYSERDA Renewable Portfolio Standard (“RPS”). The allocation is as follows:
(1) NYSERDA EEPS I Funds: $3.5 million;
(2) NYSERDA SBC III Funds: $22.1 million;
(3) NYSERDA Utility EEEPS Funds: $90 million; and
(4) NYSERDA RPS Funds: $50 million.
NYSERDA also intends to allocate $44.7 million in 2013 Regional Greenhouse Gas Initiative (“RGGI”) proceeds to the Green Bank, with further RGGI auction proceeds possibly going toward the Green Bank.
The PSC stated that the Green Bank intends to supplement existing programs, not replace them. The PSC in 2013 collected more than $700 million from ratepayers to fund these existing programs which aimed at eventually benefitting ratepayers in a variety of ways including reducing/lowering: the price of clean energy technology, dependence on fossil fuels, energy bills, and emissions of greenhouse gases and other pollutants. The monies raised previously for such programs were spent in grants and one-time subsidies, which the Green Bank aims to change into a more sustainable model that will attract financing at a commercial level. The cessation of the grant-based model means the PSC will not need to continuously collect ratepayer money to sustain the grants and one-time subsidies.