N.Y. Public Service Law § 66-c: Conservation of energy

§ 66-c. Conservation of energy. 1. It is hereby declared to be the

policy of this state that it is in the public interest to encourage, at

rates just and reasonable to electric and steam corporation ratepayers,

the development of alternate energy production facilities, co-generation

facilities and small hydro facilities in order to conserve our finite

and expensive energy resources and to provide for their most efficient

utilization when such facilities are needed to fulfill the energy,

capacity or other electric system needs of this state, as determined by

the most recent state energy plan. In furtherance of this declared

policy, the commission shall encourage the participation of utilities in

co-generation, small hydro and alternate energy production facilities

either directly or through subsidiaries formed pursuant to the

provisions of subdivisions three and four of this section. In addition,

the commission shall require any electric corporation or steam

corporation (a) to enter into long-term contracts to purchase or wheel

electricity or useful thermal energy from any alternate energy

production, small hydro or co-generation facility, with an electric

generating capacity of up to eighty megawatts, under such rates, terms

and conditions as the commission shall find just and economically

reasonable to the corporation's ratepayers, non-discriminatory to

co-generators, small hydro producers and alternate energy producers and

further the public policy set forth herein; and (b) to provide

supplemental or back-up power to any alternate energy production, small

hydro or co-generation facility on a non-discriminatory basis and at

just and reasonable rates; provided, however, that nothing contained in

this section shall require any such electric or steam corporation to

construct any additional facilities for such purposes unless such

facilities are paid for in full by the owner or operator of the

co-generation, small hydro or alternate energy production facility.

2. Notwithstanding any other provision of law, the minimum sales price

for purchased electricity from any alternate energy production facility,

co-generation facility or small hydro facility of six cents per

kilowatt hour for each utility, as established by chapter eight hundred

forty-three of the laws of nineteen hundred eighty-one, shall remain in

full force and effect (a) for any contract fully executed by the parties

and filed with the commission on or before June twenty-sixth, nineteen

hundred ninety-two and (i) providing for the purchase of electricity at

such minimum sales price, or (ii) providing for the purchase of

electricity at a utility tariff rate referencing a statutory minimum

sales price, or (iii) providing for the reconciliation or recalculation

of such contract's purchase price by comparison to such statutory

minimum sales price or tariff rate, for the duration of any such

contract and subject to the terms and conditions of such contract and

performance thereunder, provided, however, that such minimum sales price

shall be implemented in accordance with the policies and conditions

established by the commission, and (b) for any such facility concerning

which a final and unappealable judgment of a court of New York state,

rendered prior to January first, nineteen hundred eighty-seven,

determined that such facility was entitled to receive such minimum sales

price, provided that such minimum sales price shall be applicable to all

purchased electricity from such facility irrespective of any

modifications or additions to such facility that may be necessary to

enable such facility to achieve the electric power production capacity

of such facility as set forth in an order of the Federal Energy

Regulatory Commission issued prior to January first, nineteen hundred

eighty-seven granting an application for certification of such facility

as a qualifying facility, and (c) for any such facility which has been

producing electricity in addition to the electricity which is the

subject of a contract previously entered into with an electric

corporation for such facility, which contract provides for the purchase

of electricity in accordance with subdivision (a) of this section;

provided, however, that the minimum sales price shall only be paid for

electricity that does not exceed the maximum annual amount of

electricity produced by such facility as of the effective date of this

subdivision and does not exceed the amount of electricity provided for

in the contract by more than ten percent, and provided, however, that

such minimum sale price shall be implemented for the duration of the

contract in accordance with policies and conditions established by the

commission.

3. Notwithstanding any other provision of law, any gas, electric or

steam corporation shall, upon application to the commission and the

commission's approval thereof, be authorized to establish, and to

finance out of retained earnings, a subsidiary corporation, which

corporation shall have as its sole purpose, except as provided in

subdivision five of this section, the ownership and/or operation, in

whole or in part, of one or more co-generation, small hydro or alternate

energy production facilities. Within a reasonable time after its receipt

of a complete application to establish such subsidiary or to finance

such subsidiary out of retained earnings, the commission shall approve

such application unless it shall find that the proposed subsidiary or

financing may affect the corporation's ability to meet its obligation to

provide safe and adequate service at just and reasonable charges to its

own customers. Any such subsidiary corporation shall be exempt from any

regulation by the commission under this chapter and the commission shall

have no authority to regulate any rates, charges, service terms or

service practices relating to any electricity, gas or steam produced by

any such subsidiary corporation at any such facility except as

specifically provided in subdivision one of this section.

4. (a) Any subsidiary corporation established by an electric, gas or

steam corporation pursuant to the authorization of subdivision three of

this section shall comply with the following criteria:

(1) If any such subsidiary shall obtain the use of transmission

facilities or any services necessary for the sale or purchase of the

energy generated from its co-generation, small hydro or alternate energy

production facilities from any affiliated gas, electric or steam

corporation, it shall do so only pursuant to a tariff filed with the

commission by such gas, electric or steam corporation;

(2) Any such subsidiary corporation shall operate independently from

any affiliated gas, electric or steam corporation in the establishment

and operation of co-generation, small hydro or alternate energy

production facilities and in the sale of energy produced from such

facilities. It shall maintain its own books of account, have separate

officers, utilize separate operating, marketing, installation, and

maintenance personnel, and utilize separate computer facilities;

(3) Any such subsidiary corporation shall deal with any affiliated

gas, electric or steam corporation only on an arm's length basis;

(4) All transactions between such a subsidiary corporation and an

affiliated gas, electric or steam corporation which involve the

transfer, either directly or by accounting or other record entries, of

money, personnel, resources, other assets or anything of value, shall be

reduced to writing. A copy of any contract, agreement, or other

arrangement entered into between such entities shall be filed by the

affiliated gas, electric or steam corporation with the commission within

thirty days after the contract, agreement, or other arrangement is made.

This provision shall not apply to any transaction governed by the

provision of any existing state or federal law, regulation or tariff.

(b) Any gas, electric or steam corporation affiliated with such a

subsidiary corporation shall:

(1) not engage in promoting the sale of energy from the subsidiary's

co-generation, small hydro or alternate energy production facilities;

and

(2) not provide to any such subsidiary corporation any customer

proprietary information, unless such information is made available to

any member of the public upon request on the same terms and conditions

under which such information is made available to the subsidiary.

(c) The rate of return for any gas, electric or steam corporation

affiliated with any such subsidiary corporation shall not be based in

whole or in part on the capitalization of such subsidiary nor shall the

revenue requirements for any such gas, electric or steam corporation be

based on any transactions between the gas, electric or steam corporation

and its subsidiary which are not in compliance with paragraph a of this

subdivision.

5. A subsidiary corporation established pursuant to the authorization

of subdivision three of this section may have as an additional purpose

the ownership and/or operation, in whole or in part, of one or more

facilities located outside this state for the production of electric

power and/or thermal energy, together with any land, work, system,

building, improvement, instrumentality or thing necessary or convenient

to the construction, completion or operation of any such facility,

including also such transmission or distribution facilities located

outside this state as may be necessary to conduct electricity or useful

thermal energy to users located at or near a project site. Except as

expressly provided herein, nothing in this subdivision shall be

construed to modify, alter, limit, restrict, abrogate or enlarge the

application of any other provision of this section. For the purposes of

this subdivision, the term "facilities located outside this state for

the production of electrical power and/or thermal energy" shall mean and

include each of the following:

(i) Any "small hydro facility" as defined in subdivision two-c of

section two of this chapter;

(ii) Any solar, wind turbine, waste management resource recovery,

refuse-derived fuel or wood-burning facility which produces electricity,

gas or useful thermal energy;

(iii) Any facility which is fueled by coal, gas, wood, alcohol, solid

waste refuse-derived fuel, water or oil to the extent oil is used as a

backup fuel for such facility, and which simultaneously or sequentially

produces either electrical or shaft horsepower and useful thermal energy

which is used solely for industrial and/or commercial purposes; and

(iv) Any facility which is fueled by coal, gas, wood, alcohol, solid

waste refuse-derived fuel, water or oil, and which produces electrical

power, shaft horsepower or thermal energy which is used solely for

industrial and/or commercial purposes.