2023 New York Laws › PBS - Public Service › Article 4 - Provisions Relating to Gas and Electric Corporations; Regulation of Price of Gas and Electricity › 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.