RENEWABLE PORTFOLIO STANDARD ADOPTED
BY NEW YORK STATE

Innovative New Program Will Provide Clean Energy Benefits

Washington, DC – The American Wind Energy Association applauds the New York Public Service Commission, PSC Chairman Flynn and Governor Pataki for their efforts in promoting and adopting a Renewable Portfolio Standard for New York. The Renewable Portfolio Standard (RPS) adopted on Wednesday will establish the state as a leader in the field of renewable energy and ensure that by 2013 New York citizens get 25 percent of their electricity from clean, renewable energy sources such as wind power.

“New York’s leaders have recognized the importance of investing in clean, domestic sources of energy,” said AWEA Deputy Executive Director Tom Gray. “This is a visionary, long-term policy that is a good investment for consumers, the economy and the environment.”

“New Yorkers can expect cleaner air, greater energy independence, job creation and economic benefits as a result of this policy.” says Valerie Strauss of AWEA’s WindPower NY project. “New York’s excellent wind energy resource can and should be tapped to provide fuel-free, clean power while helping farmland preservation and economic development in rural, upstate New York.”

New York becomes the 17th state nationwide to adopt an RPS as a means of stimulating investment in renewable energy within its borders. In scale, the estimated 3,700 megawatts (MW) of new renewable generation it will create by 2013 is comparable to other populous states with RPS laws such as Texas (2,000 MW by 2009, adopted in 1999 under then-Gov. George W. Bush) and California (9,000 MW by 2017). To date, over 93% of the new generating capacity installed nationally because of state RPS provisions has been wind, typically the least-expensive renewable option.

Based upon the Commission’s public statements (the written Commission Order is not yet available), key provisions of the Order include:

• The policy will move the State from around 19 percent renewables currently to 25 percent by the end of 2013.

• The RPS will have two parts: a mandatory program for most of the renewables needed to meet the goal while 1 percent of the goal will be fulfilled via the voluntary green market.

• Two percent of the incremental requirement will be accomplished via support for "behind-the-meter" (utility customer-owned) renewable energy such as fuel cells, photovoltaics, and small wind systems.

• Procurement of the mandatory requirement will be conducted on a centralized basis by NYSERDA (the NY State Energy Research and Development Authority) and funded by a small charge on each retail customer’s bill (similar to the existing System Benefits Charge fund).

• · The timeline for implementation calls for a final plan by year’s end and implementation to begin by the end of 2005 with 2006 as the first full year of the program.

Cost estimates for the program range from $580-750 million, offset by approximately $360 million in expected wholesale price decreases.

“The initial dependence upon centralized support from a State agency makes this RPS different from most others. While this is an important and innovative program that we fully support, we also hope to see a transition from State procurement to procurement directly by utilities and energy service companies,” said Douglas Ward of AWEA’s WindPower NY project.

The cost studies conducted during development of the RPS show that when translated to a residential electricity bill, the additional cost of adding these renewables to New York’s generating portfolio in most cases is less than the cost of one cup of coffee per household per month. And, in fact, depending on the extent of the wholesale price reduction induced by adding renewables and future fossil fuel prices, the RPS may save consumers money.

“In a world of increasingly costly and volatile fuel prices, the RPS is a prudent hedge against future energy costs. Since renewables such as wind power are fuel-free, they can help stabilize and even hold down overall energy prices in the years to come,” said Steven Sullivan, speaking for WindPower NY.

None of the cost calculations even take into account the savings to New Yorkers from reduced air pollution and health costs savings. In fact, the PSC conservatively estimates that the RPS will decrease the emissions of major air pollutants—NOx, SOx, and CO2 by 5.22 percent, 6.04 percent and 7.42 percent respectively, and even more in the downstate region. Mercury and particulate matter emissions will also be reduced.

The PSC initiated the New York RPS proceeding in March 2003 after Governor Pataki announced the 25 percent renewable goal in his January 2003 State-of-the-State address. The proceeding has taken more than 19 months and involved more than 150 intervening parties, making it one of the largest NY PSC proceedings in history. AWEA looks forward to working with the PSC, NYSERDA, and the intervening parties to ensure smooth and rapid implementation of this innovative policy.

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AWEA, formed in 1974, is the national trade association of the U.S. wind energy industry. The association’s membership includes turbine manufacturers, wind project developers, utilities, academicians, and interested individuals. More information on wind energy is available at the AWEA web site: www.awea.org

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