Advances New York’s Commitment To Decarbonize Buildings Across the State
Designed To Demonstrate Innovative Alternatives to Meet Buildings’ Heating and Cooling Needs
Governor Kathy Hochul today announced that the New York State Public Service Commission initiated a proceeding to implement the Utility Thermal Energy Network and Jobs Act, which will advance efforts to decarbonize buildings across the state. Implementation of this law will reduce greenhouse gas emissions by allowing for the creation of utility-scale infrastructure projects that connect multiple buildings into a shared thermal network. Utility thermal networks present an opportunity for utilities to provide thermal energy to customers rather than fossil-based natural gas to meet their space heating, water heating, and cooling needs.
“Ahead of Climate Week, New York is taking a bold step to further support the use of clean-energy technology,” Governor Hochul said. “Buildings are the largest source of greenhouse gas emissions in New York State – accounting for 32 percent of overall emissions – and the Utility Thermal Energy Network and Jobs Act will help significantly reduce climate change emissions and create greener, healthier places to live and work across the Empire State.”
In addition to creating the regulatory framework for the thermal energy network, the New York Public Services Commission (PSC) will work to ensure the development of and access to well-trained, highly skilled trade persons needed to support timely, reliable, high-quality thermal energy network projects and promotes good jobs for New Yorkers in the expanding decarbonization sector.
As part of this process, the PSC will require the seven largest, investor-owned utilities — Consolidated Edison Company of New York, Inc., Orange and Rockland Utilities, Inc., New York State Electric & Gas Corporation, Rochester Gas and Electric Corporation, National Grid USA (Niagara Mohawk Power Corporation d/b/a National Grid, The Brooklyn Union Gas Company d/b/a National Grid NY, and KeySpan Gas East Corporation d/b/a National Grid), Central Hudson Gas & Electric Corporation, and National Fuel Gas Distribution Corporation — to each submit up at least one and up to five proposed thermal network pilot projects for review, with at least one pilot project located in a disadvantaged community within each utility service territory. The PSC will also establish a thermal-energy networks working group to assist the utilities in the development of pilot project proposals prior to submission to the PSC for review and to develop proposed rules and regulations for utility thermal service.
New York Public Services Commission Chair Rory M. Christian said, “The Commission has a long-standing history of supporting cost-effective energy efficiency aimed at reducing on-site energy consumption and more recently building electrification. At the conclusion of this process, customers will have more choices for their heating needs and utilities will have exciting new opportunities aligned with New York’s ambitious climate and energy goals.”
The need for utility thermal energy networks is driven by the goal to significantly reduce or eliminate greenhouse gas (GHG) emissions from the combustion of fuels in buildings as part of the Climate Leadership and Community Protection Act (CLCPA). Buildings are the largest source of GHG emissions in New York State, accounting for 32 percent of overall GHG emissions. The challenge to reducing GHG emissions from buildings is exacerbated by the fact that building emissions derive mostly from the on-site combustion of natural gas, which provides New Yorkers with basic necessities: heat, domestic hot water, and cooking. For this reason, it is essential that the transition away from natural gas for use in New York’s building stock be undertaken in due course to ensure the continuation of safe and reliable utility service.
The PSC has recently taken action to reduce building emissions. The Commission adopted procedures requiring the gas utilities to submit long-term plans that comply with the State’s greenhouse gas emission reduction goals established under the CLCPA. Based on a finding of potential and existing gaps between forecasted demand and gas supply in gas service areas, the PSC required the gas utilities to address these gaps through consideration of non-pipe alternatives, such as demand response programs, energy efficiency, and/or electrification via heat pumps and geothermal technologies.
The CLCPA requires significant decreases in carbon-based emissions over the next decades. It is important to provide new business opportunities for the State’s gas utilities given the likelihood that gas-based appliances like boilers, furnaces and hot water heaters may be replaced by electrified appliances to ensure compliance with the CLCPA. Given the importance of the issues facing our environment and the potential utility thermal networks offer, experience from these pilot projects will be critical to advancing scalable opportunities to electrify New York’s building stock.
State Senator Kevin S. Parker said, “As we battle climate change, work towards our CLCPA goals and create a clean energy economy, thermal energy networks are going to be an important tool. This legislation recognizes their importance and directs utilities to develop them in order to create full-time jobs at a living wage with benefits. Thank you, Governor Hochul, for recognizing this important nexus between creating jobs and fighting climate change and signing this critical legislation into law.”
Assemblymember Latoya Joyner said, “The implementation of the Utility Thermal Energy Network Act is a key step forward as New York reduces greenhouse gas emissions and enhances access to quality jobs for years to come. I look forward to working with Governor Hochul as we build upon this important legislation to achieve the goals established under the CLCPA.”
Sonal Jessel, Director of Policy at WE ACT for Environmental Justice said, “The CLCPA mandates a necessary timeline for transitioning off of gas, and now the Utility Thermal Energy Network and Jobs Act will help us do just that by transforming our utilities and allowing the State to transform our buildings heating and cooling systems at scale. We thank Governor Hochul and the Commission for kicking off planning for the implementation of this law through the proceeding, and we look forward to a greener New York.”
Mario Cilento, President, NYS AFL-CIO said, “Earlier this summer, the legislature passed, and Governor Hochul signed, historic legislation to authorize utility companies to establish geothermal networks. The union movement was proud to support this law and work with environmental, community and employer groups to help get this done. We applaud Governor Hochul and the Public Service Commission for moving quickly to implement this vital new program so that New York leads the way in combatting climate change while adhering to strong labor standards that protect workers and ensure we create good union jobs.”
Gary LaBarbera, President of the New York State Building & Construction Trades Council said, “If New York is to continue to set global standards in clean energy initiatives, it is imperative that we remain committed to modernizing our infrastructure and utilities through projects that also create good paying union jobs for our hard-working members and stimulate immediate economic growth. We thank Governor Hochul for signing the Utility Thermal Energy Network and Jobs Act into law, a crucial measure that will not only advance our state’s clean energy ambitions, but also provide our state’s tradesmen and tradeswomen with countless middle class career opportunities. We look forward to working with the Public Service Commission to implement this important policy and begin transitioning homes across New York to more sustainable renewable energy networks.”
John J. Murphy, International Representative United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry said, “Utility scale thermal energy networks will rapidly advance building decarbonization and reduce costs for customers with little impact to the electric grid even during peak periods while providing a just transition for thousands of middle-class New Yorkers who were at risk of being excluded from the clean energy transition.”
Lisa Dix, New York Director for the Building Decarbonization Coalition said, “Utility Thermal Energy Networks must be central to New York’s strategy to decarbonize our homes, schools, workplaces and communities at scale. We commend Governor Hochul for her leadership and her commitment to ensuring that rapid decarbonization of New York’s buildings will go hand in hand with uplifting workers, creating union jobs, investing in our communities most impacted by climate change, and spurring economic and market development. We look forward to working with the Governor and the Public Service Commission to make the Thermal Energy Network pilot program a success.”
Julie Tighe, President of the League of Conservation Voters said, “Scaling up and establishing thermal energy networks in our neighborhoods is how we’ll make clean energy affordable for everyday New Yorkers and place our state firmly on the path to decarbonization. That this path is paved with prevailing-wage union jobs means it’s a win not just for our environment, but for workers and our economy as well. We applaud Governor Hochul for her tireless leadership in this effort and the Public Service Commission for wasting no time in beginning this important proceeding.”
Jessica Azulay, Executive Director of Alliance for a Green Economy (AGREE) said, “In New York, we are working together to chart the path to community-scale renewable heating and cooling with Thermal Energy Networks, which will ensure customers, workers, and the environment are protected. We look forward to working with the Governor Hochul, the Public Service Commission, our friends in organized labor, and the utilities to pilot the next generation of heating and cooling infrastructure in New York State.”
Maritza Silva-Farrell, Executive Director of ALIGN said, “The implementation of The Utility Thermal Energy Network and Jobs Act will be a critical step to transforming New York’s electric and gas utilities and making just transition a reality for thousands of workers in the industry. It will reduce greenhouse gas emissions and will help us meet the goals of the Climate Community and Leadership Protection Act. This project is a shining example of industry, workers, and the community working together towards a common goal. We applaud Governor Hochul and the Public Service Commission for kicking off the proceeding for Thermal Energy Networks.”
Roger Downs, Conservation Director for the Sierra Club Atlantic Chapter said, “Removing the regulatory barriers to utility thermal energy networks will be transformational in reducing carbon emissions within our building sector, creating healthier living environments, and producing a new wave of family supporting jobs for the communities that need them most. Governor Hochul’s joint vision with the legislature to combine climate innovation with equity principles takes a big step today for a building decarbonization plan that will bring greater health and prosperity to all New Yorkers.”
New York State’s Nation-Leading Climate Plan
New York State’s nation-leading climate agenda is the most aggressive climate and clean energy initiative in the nation, calling for an orderly and just transition to clean energy that creates jobs and continues fostering a green economy as New York State recovers from the COVID-19 pandemic. Enshrined into law through the Climate Leadership and Community Protection Act, New York is on a path to achieve its mandated goal of a zero-emission electricity sector by 2040, including 70 percent renewable energy generation by 2030, and to reach economy wide carbon neutrality. It builds on New York’s unprecedented investments to ramp-up clean energy including over $35 billion in 120 largescale renewable and transmission projects across the state, $6.8 billion to reduce buildings emissions, $1.8 billion to scale up solar, more than $1 billion for clean transportation initiatives, and over $1.6 billion in NY Green Bank commitments. Combined, these investments are supporting nearly 158,000 jobs in New York’s clean energy sector in 2020, a 2,100 percent growth in the distributed solar sector since 2011 and a commitment to develop 9,000 megawatts of offshore wind by 2035. Under the Climate Act, New York will build on this progress and reduce greenhouse gas emissions by 85 percent from 1990 levels by 2050, while ensuring that at least 35 percent with a goal of 40 percent of the benefits of clean energy investments are directed to disadvantaged communities, and advance progress towards the state’s 2025 energy efficiency target of reducing on-site energy consumption by 185 trillion BTUs of end-use energy savings.
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