$27 Million Set Aside as Reward for Electricity Demand Reduction by New York State

new york city power plant photo

photo: Wally Gobetz

If the wide-ranging renewable energy vision that New York City Mayor Michael Bloomberg articulated last week at the National Clean Energy Summit are to be truly able to have a significant effect on fossil fuel usage, energy efficiency programs and demand reduction efforts will have to be increased. The problem doing that, from the perspective of the bottom line of utilities is that, in general, they make more money when they sell more energy. There isn't great financial incentive for utilities to overly encourage reduction in energy use.

Utilities Rewarded for Reducing Demand
The state of New York is addressing this problem with a new energy efficiency reward program which targets utilities. Under the program the New York State Public Service Commission has set aside $27 million to be awarded to utilities to develop programs which would assist electric consumers to improve their energy efficiency.
The goal of the program is to forestall expected increases in energy consumption over the next eight years—the specific target set out is to reduce electric consumption by about 694,000 MWh (15%) by 2015.

"Negative Financial Adjustments" for Utilities Which Fail to Hit Targets
The Commission is in the process of finalizing specific reduction targets for the state's electric utilities. Currently for Con Edison, this means that if it manages to reduce demand by about 255,000 MWh it will receive a reward of $9.92 million. If it fails to meet this goal it would be subject to a similarly sized negative financial adjustment. Different reduction targets will be set for different utilities.

NYC to Get Additional Funds
In addition to the $27 million provided to fund programs throughout the state, an additional $5 million will be made available to fund demand reduction in New York City.

Don't know if it would qualify under this program, but ConEd just announced that it has instaleld a green roof on one of its buildings in Long Island City in an effort to reduce energy usage and storm water runoff.

:: New York State Public Service Commission
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