Clean Energy Jobs In New York’s Economic Future

By Garry Brown

As a result of growing concerns about climate change, along with justifiable fears about high energy prices and fossil fuel shortages, we find ourselves at an important crossroad in terms of finding a way to meet future energy needs.

Fossil fuels—oil, natural gas, coal—provide about 50 percent of New York’s energy supply. Fuel prices are low right now, but that will undoubtedly change, especially when the economy improves. If fuel prices spike, so will electricity prices.

Given this reality, we could choose to do nothing. We could allow electricity consumption and dependency on out-of-state fossil fuels to increase; we could spend billions to build fossil fuel power plants to meet demand. That option, however, would simply forestall the inevitable.

Wisely, New York’s chosen to take a different path. Rather than sit on the sidelines, we’ve embarked on a game-changing plan to improve energy efficiency, further develop renewable energy resources, and rationalize our electric system through demand-side management techniques and new technological innovations, like the smart grid.

First and foremost, we must make investments in our homes and businesses to reduce electricity use; second, we must invest in new renewable energy facilities, such as wind farms and solar power plants, to increase the amount of electricity we get from renewable sources; and third, we must improve the overall efficiency of the electric grid.

Like the new trend in agriculture encouraging people to eat locally produced foods, we should encourage people to save energy and use locally produced energy, in an environmentally sound manner.

Seen another way, we can spend $1 to buy out-of-state energy supplies, or we can spend $1 to hire workers and obtain material to improve efficiency, reduce consumption and build renewable power sources. That simple yet powerful equation is at the core of Gov. Paterson’s clean energy agenda and New Economy plan to create jobs and position New York to lead in the innovation economy.

With efforts now underway, New York is fast becoming a leader in the research, development, demonstration and delivery of renewable energy and clean, efficient energy technologies. Currently, more than 34,000 New Yorkers work in jobs related to clean energy. New York now ranks fifth in the nation for such jobs, and more jobs are on the way.

As part of this groundbreaking initiative, the state Public Service Commission has directed $470 million to be spent annually for energy efficiency—an investment that will be roughly doubled by private sector matches. The energy efficiency investments, managed by the New York State Energy Research and Development Authority and six major electric and gas utilities, will be directed at single- and multi-family homes, commercial buildings and industry.

Much can be gained by becoming energy-efficient. One study estimated New York could potentially save one out of every seven kWh through energy efficiency. If we were to attain just one-third of that potential savings, it would yield more than $2.9 billion in net benefits over the next five years.

In addition to energy efficiency efforts, renewable resources are also being targeted. Recently, the governor announced $92 million would be invested to develop new renewable energy projects—an impressive sum that will attract hundreds of millions of dollars in private sector investment.

Investments tied to energy efficiency, renewable energy and new innovations will spur demand for engineers, electricians, plumbers, pipe and steam fitters and HVAC installers, as well as wind turbine builders, solar panel manufacturers and installers, construction companies and a host of other related businesses.

While these investments are indeed substantial, they pale in comparison to the estimated $200 billion New Yorkers will spend on energy through 2015. With this commitment to invest in our future, not only will we lower greenhouse gas emissions, but we will also create much-needed employment opportunities, and that’s good for all concerned.

Garry Brown is Chairman of the New York State Public Service Commission.

Con Edison Must Be Reformed To Avoid Future Disasters

By Assembly Member Michael Gianaris

Deadly explosions. Random electrocutions. Week-long blackouts. While it is difficult to predict the location and time of the next Con Edison disaster, one thing is certain: these calamities will continue until we reform this unaccountable monopoly so that safety, quality service and fair, affordable rates become its priorities.

Con Edison’s failures are well known to its customers. Whether it is the nine-day blackout that devastated my neighborhood in 2006, the 2007 steam-pipe explosion in midtown Manhattan, the numerous stray voltage electrocutions, or this year’s gas explosion in Floral Park that killed Ghanwatti Boodram, a 46-year-old wife and mother of three, Con Edison’s failures have fatal and serious financial consequences for its victims. Unfortunately, rather than accept responsibility and work to prevent future disasters, Con Edison instinctively withholds information to avoid blame and financial liability. To add insult to injury, Con Edison uses its failures to argue for even higher rates (even though we already pay some of the highest in the nation), while simultaneously giving record dividend hikes to its investors.

This cycle must be broken. In theory, Con Edison should be kept in check by the Public Service Commission (PSC), a government agency entrusted with regulating the monopoly and approving rate-hike requests. In practice, Con Edison enjoys little stringent regulation, while the PSC rubberstamps its rate requests with few real concessions.

Following the blackout that brought my neighborhood to a standstill, I led a taskforce of energy experts that recommended critical reforms to force Con Edison to be more responsible and accountable to its customers. I introduced 11 bills to enact these recommendations, including proposals to provide for competition in the industry, remove Con Edison’s absurd immunity from negligence lawsuits and increase governmental oversight of the utility.

As the sole supplier of electricity in New York City, Con Edison can take its customers for granted with no significant consequences for its failures. Anyone who has taken a basic economics class knows that capitalism thrives when competition drives corporations to perform under threat of losing business to a competitor. Absent this threat, Con Edison has proven it cares more about shareholders than customers. It is time to consider creating a competitive marketplace that will force Con Edison to improve or lose business.

Compounding the problem is the fact that, unbeknownst to most people, Con Edison enjoys immunity from negligence lawsuits, which is why it was able to get away with compensating victims of the 2006 blackout, who suffered through sweltering heat in the dark for over a week, with a measly $100 credit toward their bills. Businesses forced to close, some never to reopen, were brushed aside with little or no compensation for their losses. Con Edison must be held responsible for its failings just like other companies that cause harm. Its immunity from negligence suits must be removed.

Finally, the PSC must become a true regulatory body. Rather than abetting Con Edison’s abuse of its customers, the PSC must get tough with the utility and force it to act responsibly. Should Con Edison fail to deliver quality service, the PSC must take action through fines and denials of rate-hike requests. I proposed one way of moving the PSC in the right direction—requiring one of the PSC Commissioners to be a consumer advocate who would represent the interests of the public, not the utilities. It is critical that we take steps like this to put the “public” back in the Public Service Commission.

Clearly this unaccountable monopoly is either unwilling or unable to take steps needed to make New Yorkers safer. We must enact reforms to force Con Edison to change, for all our sakes.

Assembly Member Michael Gianaris, a Democrat representing parts of Queens, is a member of the Consumer Affairs and Protection Committee.

PACE Bonds Can Help Lower New York’s Energy Costs

By Rep. Steve Israel

Whether you are paying Con Ed, the Long Island Power Authority or National Grid, and whether you owe $60 or $6,000 each month, you probably think your utility bill should be lower. And you’d be right: New Yorkers pay the third highest electricity bills of any state in the country.

For years the government and our public utilities have urged us to make energy retrofits on our homes and businesses so we can lower our bills and “go green.” Unfortunately, the economics don’t always add up. Spend $20,000 now to insulate and add solar panels and save $1,500 every year on your energy costs. In 20 years, you might come out ahead—but what if you sell that property in five years? And how many people can actually afford a $20,000 solar panel today? What if you need that money for an unforeseen emergency? The upfront costs for energy retrofits just don’t seem to make economic sense.

New Yorkers need a way to get efficient that comes with immediate savings instead of a financial setback.

That’s why I’m introducing legislation in Congress to make viable an option called “Property Assessed Clean Energy (PACE) Bonds.”

A PACE bond is a small municipal bond where the proceeds are loaned to residential and commercial property owners to finance energy retrofits. Property owners repay the loan over 20 years through a small annual assessment on their property tax bill. With little to no upfront cost for the property owner, the energy savings—estimated between 20 and 40 percent for most projects—are immediately realized. The loan is attached to the property, not the owner, and transfers with the property if it’s sold.

My legislation, which was included in the House-passed climate change bill, will jump-start PACE Bonds by authorizing the Department of Energy to provide 100-percent loan guarantees for the participating municipalities, eliminating risk and expanding PACE Bond programs nationally. We also need action on the state level to make PACE Bonds available to all New Yorkers, and I’m working with Gov. David Paterson and our state leadership on a plan.

Not only do PACE Bonds have environmental and security benefits—reducing carbon emissions, cutting our dependence on foreign oil and decreasing overall energy consumption—they also have the potential to be a major economic stimulus. Buildings account for about 40 percent of total U.S. energy consumption, and those inefficiencies cost us $350 billion per year. Nationally, it is estimated that there is at least $500 billion in energy retrofit work to be done.

New York is particularly well suited to take advantage of the economic benefits of PACE Bonds. Here in New York, we have an older building stock that would benefit enormously from efficiency retrofits. We have a financial community to engage in the municipal bond market. We have clean technology businesses that would create green jobs with the new demand for their services. And we have environmental concerns that PACE Bonds would help address.

We all still have to pay our utility bills, but if we work on solutions like PACE Bonds, property owners can maximize efficiency, reduce carbon emissions and finally start saving money.

Rep. Steve Israel, a Democrat representing parts of Nassau and Suffolk counties, is a member of the House Subcommittee on Energy and Water Development.