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Gov. Hochul signs energy efficiency standards bills

Gov. Kathy Hochul is pictured with state legislators, including state Sen. Kevin Parker, state Sen. Jessica Ramos, Assemblymember Pat Fahy and Assemblymember Latoya Joyner, as well as labor leaders and climate advocates to sign three energy efficiency-related bills into law.

Higher energy efficiency standards for appliances and higher efficiency standards in state building codes are now state law.

Gov. Kathy Hochul signed three pieces of legislation at the Newlab headquarters in Brooklyn alongside state Sen. Kevin Parker, state Sen. Jessica Ramos, Assemblymember Pat Fahy, Assemblymember Latoya Joyner, labor leaders and climate advocates.

The Advanced Building Codes, Appliance and Equipment Efficiency Standards Act of 2022 bolsters New York’s regulatory and policy environment to support energy efficiency and greenhouse gas reduction strategies in buildings along with expanded appliance standards. The Utility Thermal Energy Network and Jobs Act requires the Public Service Commission (PSC) to develop a regulatory structure for utility thermal energy networks — including district geothermal and other community-scale thermal infrastructure projects — for heating and cooling homes, and to direct utilities to launch pilot projects in their service territories.

The governor also signed legislation requiring prevailing wage for renewable energy projects one megawatt and larger that involve the procurement of renewable energy credits from a public entity.

Together, with the strong promise held by community thermal systems for existing pipe workers and other skilled trades, accelerated action in building efficiency, and strengthened wage standards for renewable energy development, these legislative measures demonstrate the state’s commitment to ensuring projects create quality jobs for New Yorkers in clean energy and planning for a just transition.

“We’re going to be updating our building codes,” Hochul said. “What does that mean? It’s going to help reduce greenhouse emissions from buildings all across the state because the biggest contributor of emissions is buildings. We’ve known that, we’ve recognized that and now we’re doing something about that. That’s one-third of the state’s total greenhouse emissions. Also, this will help our New Yorkers save on energy costs. Boy, does that sound good at a time when our citizens are getting slammed with inflation, high cost of living. And any way we can reduce their cost is so important to them. So help them with their energy costs and rising bills. And New Yorkers is because of this, and I don’t know if this was the intent originally, but expected to save New Yorker would save $15 billion. That includes $6 billion for low and moderate-income households at a time when that is so critically important for them. Stronger energy codes also give will give us $2.5 billion in lifetime savings for homeowners and through our measures through 2030.”

ENERGY CONSERVATION CONSTRUCTION CODE

A.10439/S.9405 requires the New York State Energy Conservation Construction Code to be updated to achieve energy efficiency and greenhouse gas emission reductions in support of the Climate Act. Advanced energy codes could reduce ongoing energy bills, leading to nearly $4 billion in energy savings for building owners by 2030, with potential for even greater savings when factoring in recent inflation and energy cost increase trends. Additionally, this legislation authorizes the New York State Energy Research and Development Authority, in consultation with the Department of State, to adopt efficiency standards for appliances and equipment that reduce energy usage. Expanding appliance standards will reduce emissions and deliver $15 billion in savings to New Yorkers through 2035, including $6 billion to low- and moderate-income households, by reducing wasted energy from the use of less efficient everyday products and appliances. The legislation also authorizes the Governor to designate the President of NYSERDA and the Commissioner of the Department of Environmental Conservation as members of the State Fire Prevention and Building Code Council (Codes Council), to align the work of the Climate Action Council with the Codes Council to achieve the goals of the Climate Act through advances in the building energy code.

Assemblyman Andrew Goodell, R-Jamestown, voted against the bill in the Assembly, saying provisions requiring more expensive energy efficient appliances will hurt many state residents.

“There’s an even stronger and more effective way to promote efficiency and that’s through the marketplace,” Goodell said. “If more efficient appliances cost consumers less money either in the short term or the long term we don’t need to pass legislation do we? Because our residents are smart peopel and our residents will vote with their pocket books. Rather than passing mandates that some of our reisdents won’t be able to afford, it would be helpful if we focus on how we make energy efficiency more affordable rather than more expdensive. To the extent that we’re successful in making energy efficiency more affordable our smart reisdents will move in that direction without state legislation.”

THERMAL ENERGY NETWORKS

Legislation A.10493/S.9422 allows utilities to own, operate, and manage thermal energy networks, as well as supply distributed thermal energy, with Public Service Commission oversight. Heating and cooling networks — also referred to as community thermal or district energy systems — are a resilient, energy efficient, and clean solution that can also help New York state meet its climate goals, according to supporters. Thermal energy networks leverage multiple sources of existing waste heat (such as water, wastewater, and geothermal, among others) and connecting a diverse set of building types on a shared loop, thermal energy networks can provide significant operating and energy cost savings when compared to more traditional heating and cooling methods, while also reducing demand on the electric grid.

“Our second bill, the Utility Thermal Energy Network and Jobs Act, a little shorter, a little tighter,” Hochul said. “I’m liking that one. This will unlock tremendous job opportunities. We’re reducing harmful emissions from buildings. It also replaces fossil fuel underground pipe systems for new clean energy systems. And I think the pipe trades like this one as well. They’re going to be busy – keep those people trained, Joe, we’re going to have a lot more jobs for people. That’ll also support $22.5 million in NYSERDA funding to support thermal energy development. This is an exciting new area, it really truly is when you think about it. Unlocking the possibilities, harnessing that power source and working really in a smart way. Fifteen million dollars has been committed for future studies, detailed designs and construction projects as well. I know that’s going to help protect our environment with lots of good jobs and we like the sound of that.”

Goodell voted against A.10493, citing its requirement that the seven largest gas and electric utility companies will be required to create pilot programs creating thermal energy networks as well as the costs associated with such projects. Assemblyman Joe Giglio, R-Gowanda, voted in favor. Goodell specifically cited the Jamestown Board of Public Utilities’ experience with district heating, which used wastewater from the city’s old coal boilers and ran that hot water through pipes into buildings downtown, allowing the building owners to decommission their boilers and use the city to heat buildings. It was an expensive project that worked well until the coal boilers were retired and the utility moved to an intermittently used natural gas turbine to generate electricity. At that point, the BPU had to build a boiler to run the district heating system.

“They promptly found out it was not cost-effective even after they had paid for all the up front installation costs,” Goodell said. “I like the concept but the concept needs to be driven by reasonable economics or it will be a colossal waste of money. This is a mandate before a cost-benefit study. That’s not an approach I can support, although the concept has merit.”

LOWER PREVAILING WAGE THRESHOLD

A.9598/S.8648 requires prevailing wage for renewable energy projects one megawatt and larger that involve the procurement of renewable energy credits from a public entity, ultimately supporting the Hochul’s new goal for 10 gigawatts of distributed solar power by 2030, enough to annually power nearly 700,000 average-sized homes. New York’s 10 gigawatt roadmap, approved by the Public Service Commission in April, provides a comprehensive strategy to expand the state’s NY-Sun initiative into one of the largest distributed solar programs of its kind in the nation. Hochul said the public investment to achieve 10 gigawatts of solar will spur approximately $4.4 billion in private investment to bring awarded projects to fruition, for a total of $5.9 billion in expected investment over the mid- to late-2020s and 6,000 additional solar jobs across the state.

“Bill three will have solar panel jobs filled by union workers that pay really well because now going forth, they’ll be subject to the prevailing wage,” Hochul said. “This is really important to make sure that as we create these new industries, create these jobs, that those jobs are able to sustain families. So having the prevailing wage apply to this work with the solar panels is going to be really important as well. I want to thank everyone involved in that.”

Both Goodell and Giglio voted against the legislation in the Assembly. Currently, the prevailing wage only has to be paid on projects producing five or more megawatts of power. A.9598 would decrease the amount of power produced to trigger the prevailing wage requirement to one megawatt of power.

“So, what happens when we expand prevailing wage to privately funded projects is we increase the labor cost of those projects from anywhere to 20% to 30% to 35%,” Goodell said. “And as we increase the cost of labor, we make these projects more expensive and there are some projects that no longer will be financially viable. We see that concept in play everywhere we go. You increase the price and fewer projects go forward. We increase the price on renewable energy projects, fewer of them will be built. Fewer renewable energy projects will go on line, fewer employees will be hired to construct them. … For those of us who want to encourage more renewable energy, the last thing we want to do is raise the cost well above what the average cost is in the community.”

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