NYC and the Renewable Portfolio Standard Part III: How Con Ed Customers Still Get Screwed

The reason I started looking into the PSC and NYSERDA reports on the Renewal Portfolio Standard in the first place was to figure out if New York City was still getting the short end of the state funding stick, and I’ve come up with an answer – Con Ed customers still contribute far more to the RPS pool than they receive in incentives. While those in Con Ed’s territory picked up about 25.5 percent of the total customer-sited tier funding for PV from 2003 to March 2009, the NYC-based utility puts in around 42 percent of the total incentives funds.

As I noted in my last post on RPS, PV receives far and away the largest portion of the NYSERDA funds, so it seems to me to be a pretty good indicator of where New Yorkers stand when it comes to getting state incentives. Prior to 2006 when the new model for RPS came into effect, Con Ed was paying even more – close to 50 percent of the total funds. The amount each utility has to pay is based on its revenue, and as one of the largest energy suppliers in the world Con Ed obviously pulls in a lot of cash. Though Con Ed customers do receive the largest percentage of funds, the discrepancy is still frustrating.

Of course Con Ed isn’t the only one getting shortchanged. National Grid/Niagara Mohawk, for example, got 23.4 percent of the total through March 2009 but currently contributes a little less than 30 percent of the funds. Rochester Gas & Electric contributes over twice as much as its customers receive, but the figures are much smaller (a little less than 7 percent given to RPS versus about 3 percent received). Although that’s still not as much of a difference in give and take as Con Ed, it means someone must really be reaping the benefits of those three utilities’ generous input.

It appears those bloodsuckers would be the good folks over in Central Hudson Gas & Electric territory. While customers of that utility roped in just over 20 percent of NYSERDA funding from 2003 to March 2009 (the third highest, I might add), Central Hudson pays in just 5 percent of the RPS pot. Five percent! That’s the second lowest contribution of all New York State utilities.

Central Hudson isn’t the only incentives hog. Customers of New York State Electric & Gas and, to a lesser degree, Orange & Rockland also pull in much more than they pay.

I couldn’t really find anything specifically addressing these discrepancies in the PSC documents, but it’s interesting to note that Con Ed raised objections in December 2005 during the latest rounds of negotiations about the broader System Benefits Charge (which follows a similar pattern of shortchanging certain utility zones). PSC’s response was: “Requiring a ‘one-for-one’ arrangement would inherently jeopardize the effectiveness of the SBC program by directing funding towards lesser programs simply for the sake of mathematical parity.” Furthermore, “We expect that there will be an ebb and flow in the balance of funds over time, but that in the long-term, reasonable overall balance will be achieved.”

You can’t really blame NYSERDA for the disparities, however. The reason Central Hudson receives so much of the RPS funding is because customers apply for it. Con Ed customers get shortchanged not because the state picks favorites but because of inherent barriers in New York City that prohibit more renewable energy projects from being carried out. Indeed, even PSC notes: “While institutional impediments in the New York metropolitan area continue to suppress the penetration of PV systems and result in higher installed costs, these issues are slowly being addressed. Future NYSERDA program design will consider additional strategies to increase the penetration of PV and lower the installed cost of systems in high peak demand areas.” Amen to that!

Ultimately, though, it is the individual NYC ratepayer that must foot the bill for RPS. And the individual Con Ed customer pays far more than the individual Central Hudson customer. Effective October 1, 2009, the RPS surcharge for Con Ed is .10 cent per kilowatt hour (an amount that has steadily increased from 2005 when it was .02 cent per kWh). And how much are those Central Hudson customers paying? As of January 5, 2010, just .001 cent per kWh.

That means New Yorkers pay a hundred times more for RPS. While on the whole we may be electricity abusers (what with our energy-sapping skyscrapers and A/C addiction), it’s not hard to see that when it comes to RPS Con Ed customers get screwed.

One response to this post.

  1. […] Last month, Gov. Cuomo’s State of the State Address spoke boldly about renewable energy and other environmental initiatives. One major proposal is the creation of a $1 billion Green Bank for investment in clean energy. Renewable energy projects in New York City tend to have higher price tags than elsewhere in the state, just as a cost of doing business, so any additional help such systems can get will be welcome. However, if the Green Bank will be partially funded by the Renewable Portfolio Standards and System Benefit Charge, it is likely the City will contribute more than it gets back. […]

    Reply

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