October 8, 2015

Kauffman: Cuomo's Energy Overhaul 'Rev'ing Up in NY

Renewing Energy Vision, the Cuomo administration’s ambitious effort to transform the electricity distribution and generation system in New York, has been taking important steps forward, the state’s top energy official said.

“This is not just about talk,” Richard Kauffman, the state’s chairman of energy and finance, said at City & State’s On Energy conference. “We can point to a record of stuff that we have been doing to bring this vision about.”

The REV initiative envisions a state-of-the-art grid with more distributed generation, which could reduce demand on the energy grid, widespread implementation of smart grid technology to more efficiently balance the energy load, and greater reliance on renewable energy. The plan could also save billions of dollars by reducing the need to build large new power plants or make other major capital investments, potentially saving money for customers as well.

But while many officials and industry experts are optimistic about Cuomo’s plans, some say it’s still unclear how much the comprehensive overhaul will cost, how it will be paid for, and when tangible improvements will be seen.

Some $30 billion will be needed on capital investment over the next 10 years, up from $17 billion over the past decade, Kauffman noted. Instead of investing all of that on maintaining an outdated system, he said, much of it should be spent instead on building out a new, more nimble system.

For example, Con Edison is already moving in that direction with a program underway in Brooklyn to better manage growing demand for electricity.

“Con Ed was going to have to spend over a billion dollars on a new substation,” Kauffman said. “Again, that substation would have about a 54 percent capacity utilization. Instead, Con Ed went out to the market with this problem of load growth, and instead what Con Ed is going to do is spend hundreds of millions of dollars less on distributed energy solutions that include on-site generation, energy efficiency and demand response.”
Kauffman also noted that the first set of REV rules have come out and that 11 demonstration projects with utilities and other third parties are moving forward, with more to be approved in coming months.

He also touted a number of ongoing initiatives that fall under the REV umbrella, including several programs spurring solar power, a state green bank designed to spur private sector investment in renewable energy, a micro-grid competition, and the Energy Highway, which aims to upgrade and expand the state’s aging transmission grid.

“I come from the private sector, and I know that there are some people that can be cynical about what government can get done -- one or two maybe in this room,” Kauffman said. “But I’d put this agenda of completed items against anything that I saw in my 30 years in the private sector before I joined government. We can and we will get things done.”

However, in a state Senate hearing several months ago in May, lawmakers said they wanted more concrete details about REV. At the City & State conference on Wednesday, Kauffman asserted that there had been confusion among state legislators over what the initiative was actually aimed at accomplishing.

“It’s not just about distributed solutions,” Kauffman said. “I think that’s what some of the lawmakers were concerned about. It’s about building this integrated grid, and that’s the kind of grid that we need to have. So it’s a balance between the strong, central station distribution and transmission backbone, and integrating distributed resources.”

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