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Trustees Authorize Energy Efficiency Program Eligibility for Municipal and Rural Co-op Electric Systems

Connie Cullen

May 23, 2006


WHITE PLAINS—The Trustees of the New York Power Authority (NYPA) today authorized eligibility for the state’s 51 municipal and rural electric cooperative systems (muni and co-ops) to participate in NYPA’s Statewide Energy Services Program (Statewide ESP).  This allows the muni and co-ops to obtain low-interest financing from NYPA, providing them with added flexibility in their financing options, to implement expanded energy efficiency and energy conservation programs at their own facilities, and also for their business and residential customers. 

“Today’s action furthers the relationship between the Power Authority and its municipal and co-op customers to help realize Governor Pataki’s commitment to reducing energy use through the latest energy-saving technologies,” said Frank S. McCullough, Jr., chairman, NYPA. “We’ve been working with the leaders in the muni and co-op systems for many years bringing energy audits, weatherization techniques and electric vehicle purchase agreements to their communities.  Now, with the availability of low interest loans from NYPA, the munis and co-ops can undertake a wider variety of projects to better serve their operations and those of their customers.”

“We are pleased to now have this new option of low-interest financing from NYPA available to the MEUA membership as another way to help incorporate the benefits of energy efficiency and conservation into our systems,”  said Robert Mullane, executive director, Municipal Electric Utilities Association (MEUA).

In 2005, the MEUA and NYPA completed a study to determine the economic potential for energy efficiency in the muni and co-op customer market.  The study identified a significant level of potential for cost-effective energy efficiency program activity in this market.  Long-term power sales agreements entered into by NYPA and its muni and co-op customers in 2003 provided for working cooperatively to implement expanded energy efficiency programs for the systems to ensure optimum use of the Authority’s hydroelectric resources.

“By following Governor Pataki’s leadership to exercise greater use of energy efficiency, the muni and co-op systems can stretch their valuable hydroelectric power allocations from NYPA, helping to keep their customer rates lower, to trim energy demand and to contribute to a cleaner environment,” said Timothy S. Carey, president and chief executive officer, NYPA. 

All of the 47 municipal and four rural electric cooperative systems receive hydropower from NYPA, which helps to keep their rates low.  If they exceed their hydropower allocation, the systems use other sources to obtain power, with 14 of those systems using NYPA to fulfill their energy requirements, when needed, with non-hydroelectric resources.

Since the 1980s, NYPA has sponsored a number of energy efficiency programs for its muni and co-op customers, most notable of which was the Watt Busters home energy audit and weatherization program completed in the mid-1990s.  Currently, NYPA offers an electric vehicle purchase program and is working on a number of energy projects for publicly-operated facilities served by the munis and co-ops.  During this time, the munis and co-ops have used other financing.   

Participation in the NYPA Statewide ESP expands the options available to muni and co-op customers for financing energy efficiency projects.  Systems can also finance projects through their own municipalities or membership in the Independent Energy Efficiency Program (IEEP).  Currently, 22 of the state’s municipal electric utilities belong to IEEP.  IEEP is a non-profit organization providing a broad spectrum of energy efficiency services designed for muni and co-op systems in New York. 

Funds expended on IEEP programs are recovered through rates approved by the New York State Public Service Commission and the Power Authority.  Since 2001, municipal utility systems participating in IEEP have made a collective investment of more than $9 million in energy efficiency programs.

Muni and co-op systems who now join the IEEP can begin to implement energy efficiency programs immediately with the new NYPA low-interest financing option.  Low-interest NYPA financing will fund programs of these systems while their IEEP program accounts begin to grow with deposits of that portion of a system’s rates allocated for IEEP programs.  Deposits in a system’s IEEP program account will reimburse NYPA under the terms of a Cost Recover Agreement (CRA) with the system.  Muni and co-op systems, not yet members of IEEP, could work directly with NYPA for this low-interest financing.

Under the new option afforded by NYPA financing, each muni and co-op would launch and administer its own energy efficiency and conservation programs within its own system.  NYPA would then enter into a single CRA with each muni and co-op interested in participating in NYPA’s Statewide ESP.  Each system would be financially responsible to NYPA for any financing provided by the Power Authority for programs it launches within its own system.

NYPA’s role would be to review the eligible measure to ensure it is consistent with the current measures authorized under the Statewide ESP, analyze savings estimates, provide technical assistance as needed and, if requested by a system, provide financing.  Program initiatives undertaken by the systems to comply with the objectives of the recent long-term hydropower sales agreements, whether or not involving Authority financing, are submitted for review and approval by the Authority.

To date, NYPA’s Statewide ESP has reduced energy consumption and peak demand.  These programs have lessened electricity use by nearly 193,000 kilowatts, resulting in savings of almost $93 million annually.  The Statewide ESP includes, but is not limited to, such measures as lighting, motors, heating, ventilating and air-conditioning and controls, boilers, building shell measures and clean energy technologies such as solar power and fuel cells.

About NYPA:

■    NYPA uses no tax money or state credit.  It finances its operations through the sale of bonds and revenues earned in large part through sales of electricity.  ■    NYPA is a leader in promoting energy-efficiency, new energy technologies and electric transportation initiatives.  ■    It is the nation’s largest state-owned electric utility, with 18 generating facilities in various parts of the state and more than 1,400 circuit-miles of transmission lines. 


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