Bill Text: NY S09422 | 2021-2022 | General Assembly | Introduced


Bill Title: Establishes the "utility thermal energy network and jobs act" to promote the development of thermal energy networks throughout the state and to provide jobs to transitioning utility workers who have lost or are at risk of losing their employment.

Spectrum: Moderate Partisan Bill (Democrat 5-1)

Status: (Passed) 2022-07-05 - SIGNED CHAP.375 [S09422 Detail]

Download: New_York-2021-S09422-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          9422

                    IN SENATE

                                      May 25, 2022
                                       ___________

        Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
          printed to be committed to the Committee on  Energy  and  Telecommuni-
          cations

        AN  ACT to amend the public service law, the transportation corporations
          law, the labor law and the public  authorities  law,  in  relation  to
          thermal energy networks

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Short title. This act shall be known and may  be  cited  as
     2  the "utility thermal energy network and jobs act".
     3    §  2.  Legislative  findings  and  intent.  The  legislature finds and
     4  declares that:
     5    1. New York State has a strong  interest  in  ensuring  that  building
     6  emissions  goals  of the Climate Leadership and Community Protection Act
     7  (CLCPA) are met. Buildings are New York's largest source  of  greenhouse
     8  gasses  and  other  climate  emissions,  due to the combustion of fossil
     9  fuels for heating, domestic hot water, cooking, and other end uses;
    10    2. The decarbonization of buildings must be pursued in a  manner  that
    11  is  affordable,  accessible, preserves and creates living-wage jobs, and
    12  retains the knowledge and experience of the existing utility union work-
    13  force;
    14    3. Thermal energy networks have the potential to decarbonize buildings
    15  at the community and utility scale and help achieve  the  goals  of  the
    16  CLCPA;
    17    4.  Thermal  energy  networks  consist  of pipe loops between multiple
    18  buildings and energy sources  carrying  water  at  ambient  temperature;
    19  building  owners can connect to the ambient temperature loops with water
    20  source heat pumps installed within the building, which can be  used  for
    21  heating and cooling and hot water services;
    22    5. Many utilities in New York State have been seeking to develop ther-
    23  mal  energy  networks, but legal and regulatory barriers and the current
    24  and outdated public service  law  framework  have  prevented  them  from
    25  moving these proposals forward;

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD15957-02-2

        S. 9422                             2

     1    6. New York State has a strong interest in ensuring an adequate supply
     2  of reliable electrical power and, therefore, needs to promote the devel-
     3  opment  of  alternative  power sources and take steps to assure reliable
     4  deliverability. Thermal energy networks  are  highly  efficient  because
     5  they  utilize  and exchange thermal energy from many underground sources
     6  and buildings, including recycled thermal energy, minimizing  impact  on
     7  the electricity grid;
     8    7.  Access  to thermal energy networks has the potential to reduce the
     9  up front and operating costs of building electrification for customers;
    10    8. Utilities' access  to  capital,  their  experience  with  networked
    11  infrastructure  in  public  rights of way, and the requirement that they
    12  serve all customers, positions them well to develop  and  scale  thermal
    13  energy  networks  that are accessible to all customers and to coordinate
    14  the development of thermal energy networks with any  downsizing  of  the
    15  utility gas system;
    16    9. New York State also has a proprietary interest in the efficient and
    17  reliable  delivery of energy and the energy infrastructure of the state,
    18  which interest is acknowledged throughout the public service law.  Util-
    19  ity corporations and other power suppliers share  these  interests  and,
    20  moreover,  have  a duty to protect proprietary interests in the projects
    21  they fund and such investments of ratepayer resources can  be  protected
    22  by establishing effective contractor qualification and performance stan-
    23  dards,  including  requirements  for  prevailing  wage  rates, bona fide
    24  apprenticeship criteria, and project labor agreements;
    25    10. The construction industry is highly skilled and  labor  intensive,
    26  and  the installation of modern thermal energy networks involves partic-
    27  ularly complex work, and, therefore, effective  qualification  standards
    28  for  craft  labor  personnel  employed  on these projects are critically
    29  needed to promote successful project delivery;
    30    11. Finally, the legislature finds that  these  facts  are  especially
    31  vital  now  because the construction industry is experiencing widespread
    32  skill shortages across the country, which are crippling existing capital
    33  projects  and  threatening  projects  planned  for   the   future.   The
    34  construction  of  thermal  energy networks will utilize many of the same
    35  skills that today's  utility  and  building  trades  workforces  already
    36  possess;
    37    12. Thus, it is the intent of the legislature that passage of this act
    38  is for the following purposes:
    39    a.  To  remove  the  legal  barriers to utility development of thermal
    40  energy networks and require the public service commission  to  authorize
    41  and  direct  utilities  to  immediately commence piloting thermal energy
    42  networks in each and every utility territory;
    43    b. To direct and authorize the public service commission to develop  a
    44  regulatory  structure  for  utility  thermal energy networks that scales
    45  affordable and accessible building electrification, protects  customers,
    46  and  balances the role of incumbent monopoly utilities with other market
    47  and public actors;
    48    c. To promote the successful planning and delivery of  thermal  energy
    49  networks  and protect critical investments in such projects by requiring
    50  the use of appropriate quality craft  labor  policies  that  ensure  the
    51  development  of and access to an adequate supply of well trained, highly
    52  skilled craft persons needed to support timely,  reliable,  high-quality
    53  projects;
    54    d.  To  promote  strong  economic  development and good jobs for local
    55  residents in the expanding decarbonized sector by requiring  application
    56  of  progressive  state  labor and employment policies that ensure public

        S. 9422                             3

     1  utility investments and  related  state  subsidies  create  unparalleled
     2  skill  training  and  employment  opportunities for residents in project
     3  areas through the use of local prevailing wage standards and successful,
     4  bona  fide  apprenticeship  programs,  or project labor agreements which
     5  incorporate prevailing wage and training  standards  and  provide  addi-
     6  tional benefits for project owners and workers; and
     7    e. To promote the use of pre-apprenticeship programs that will fortify
     8  and  expand existing apprenticeship programs through systematic outreach
     9  efforts to recruit and assist persons from underrepresented and  low-in-
    10  come  communities  by  providing  such  persons with remedial education,
    11  social services and unique opportunities for  direct  access  into  high
    12  quality  apprenticeship  programs  and gainful employment in the growing
    13  building decarbonization workforce.
    14    § 3. Section 2 of the public service law is amended by adding two  new
    15  subdivisions 28 and 29 to read as follows:
    16    28.  "Thermal  energy,"  when  used  in this chapter, shall mean piped
    17  non-combustible fluids used for transferring heat into and out of build-
    18  ings for the purpose of eliminating any resultant on-site greenhouse gas
    19  emissions of all types of heating and cooling processes, including,  but
    20  not  limited  to,  comfort  heating and cooling, domestic hot water, and
    21  refrigeration.
    22    29. "Thermal energy network," when used in this  chapter,  shall  mean
    23  all real estate, fixtures and personal property operated, owned, used or
    24  to  be  used  for or in connection with or to facilitate a utility-scale
    25  distribution infrastructure project that supplies thermal energy.
    26    § 4. Subdivision 11 of section 2 of the public service law, as amended
    27  by chapter 159 of the laws of 1992, is amended to read as follows:
    28    11. The term "gas corporation," when used in  this  chapter,  includes
    29  every  corporation, company, association, joint-stock association, part-
    30  nership and person, their lessees, trustees or  receivers  appointed  by
    31  any  court  whatsoever,  owning,  operating or managing any gas plant or
    32  thermal energy network (a) except where gas  is  made  or  produced  and
    33  distributed  by  the maker on or through private property solely for its
    34  own use or the use of its tenants and not for sale to others, (b) except
    35  where compressed natural gas is sold, distributed or furnished solely as
    36  a fuel for use in motor vehicles, (c) except where manufactured  gas  is
    37  sold  by  the  producer  only for use or resale by a gas corporation and
    38  such gas of the producer and any affiliated producers does not exceed in
    39  any one year thirty per cent of the total  gas  sold  by  any  purchaser
    40  thereof  in  the area in which such manufactured gas is resold either as
    41  manufactured gas or as a component of mixed gas, and  (d)  except  where
    42  gas  is  made  or  produced  solely  from  one  or more alternate energy
    43  production facilities or distributed solely from one  or  more  of  such
    44  facilities  to users located at or near a project site; provided, howev-
    45  er, that any producer not included within the  meaning  of  "gas  corpo-
    46  ration"  by reason of exception (c) or (d) shall nevertheless be consid-
    47  ered a gas corporation  for  the  purposes  of  commission  jurisdiction
    48  relating to the safety of the construction, operation, or maintenance of
    49  plants manufacturing pipeline quality gas.
    50    § 5. Subdivision 13 of section 2 of the public service law, as amended
    51  by chapter 843 of the laws of 1981, is amended to read as follows:
    52    13.  The  term  "electric  corporation,"  when  used  in this chapter,
    53  includes every corporation, company,  association,  joint-stock  associ-
    54  ation,  partnership  and  person,  their  lessees, trustees or receivers
    55  appointed by any court whatsoever (other than a railroad or street rail-
    56  road corporation generating electricity solely for  railroad  or  street

        S. 9422                             4

     1  railroad  purposes  or  for  the  use of its tenants and not for sale to
     2  others) owning, operating or managing  any  electric  plant  or  thermal
     3  energy  network  except where electricity or thermal energy is generated
     4  or distributed by the producer solely on or through private property for
     5  railroad  or  street  railroad purposes or for its own use or the use of
     6  its tenants and not for sale to others; or except where  electricity  is
     7  generated  by  the producer solely from one or more co-generation, small
     8  hydro or alternate energy production facilities  or  distributed  solely
     9  from  one  or  more  of  such  facilities  to users located at or near a
    10  project site.
    11    § 6. Subdivision 1 of section 5 of the public service law  is  amended
    12  by adding a new paragraph i to read as follows:
    13    i.  To  thermal  energy  provided by gas corporations, electric corpo-
    14  rations, or combination gas and electric corporations.
    15    § 7. Paragraphs (c) and (d) of subdivision 6  of  section  65  of  the
    16  public  service law, paragraph (c) as amended by chapter 204 of the laws
    17  of 2010 and paragraph (d) as amended by chapter 388 of the laws of 2011,
    18  are amended and a new paragraph (e) is added to read as follows:
    19    (c) for a remote meter reading device upon the request and consent  of
    20  the customer; [or]
    21    (d)  for  installation of capital improvements and fixtures to promote
    22  energy efficiency upon the request and consent of the customer,  includ-
    23  ing  but  not  limited to the performance of qualified energy efficiency
    24  services for  customers  participating  in  green  jobs-green  New  York
    25  on-bill recovery pursuant to section sixty-six-m of this article[.]; or
    26    (e) for the provision of thermal energy service.
    27    §  8.  Section 10 of the transportation corporations law is amended to
    28  read as follows:
    29    § 10. Definitions. A gas corporation is  a  corporation  organized  to
    30  manufacture,  to  produce  or otherwise acquire and to supply for public
    31  use artificial or natural gas [or], a mixture  of  both  artificial  and
    32  natural  gases or thermal energy for light, heat or power and for light-
    33  ing the streets and public and private buildings of cities, villages and
    34  towns in this state. An electric corporation is a corporation  organized
    35  to  manufacture,  to  produce  or  otherwise  acquire, and to supply for
    36  public use electricity or thermal energy for light, heat or  power,  and
    37  for  lighting  streets,  avenues, public parks and places and public and
    38  private buildings of cities, villages and towns within this state. A gas
    39  and electric corporation is a corporation organized for purposes of both
    40  a gas corporation and an electric  corporation.  For  purposes  of  this
    41  article,  "thermal  energy"  shall  have  the same meaning as defined by
    42  subdivision twenty-eight of section two of the public service law.
    43    § 9. Subdivisions 1, 2, 3 and the opening paragraph of subdivision 3-b
    44  of section 11 of the transportation corporations law, subdivision  3  as
    45  amended  by chapter 622 of the laws of 1947 and the opening paragraph of
    46  subdivision 3-b as amended by chapter 840  of  the  laws  of  1977,  are
    47  amended to read as follows:
    48    1.    A  gas corporation and a gas and electric corporation shall have
    49  power to manufacture gas, and to acquire thermal energy  or  natural  or
    50  artificial  gas  and  to  mix  the gases and to sell and furnish thermal
    51  energy for heating or cooling or gas for light, heat or  power;  and  to
    52  lay  conductors,  pipes,  conduits,  ducts and other fixtures for gas or
    53  thermal energy networks in the streets, highways and public  places,  in
    54  each  city,  village  and  town  in  the county or counties named in its
    55  certificate of incorporation, with the consent of the municipal authori-

        S. 9422                             5

     1  ties of such city, village or town,  and  under  such  reasonable  regu-
     2  lations as they may prescribe.
     3    2. Every corporation having authority under any general or special law
     4  or under any charter or franchise, to lay down, erect or maintain pipes,
     5  conduits,  ducts  or other fixtures in, over or under the streets, high-
     6  ways and public places of any municipality for the purpose of furnishing
     7  or distributing natural gas or thermal energy, may  acquire  and  supply
     8  for public use artificial gas or thermal energy.
     9    Where  any  gas  corporation  is  serving natural gas under permits or
    10  franchises permitting the laying or maintaining of mains  or  pipes  and
    11  conveying  natural  gas, and the supply of natural gas has become inade-
    12  quate or insufficient to give reasonable service  to  consumers  in  the
    13  municipalities  served by it, such gas corporation may supply artificial
    14  gas or a mixture of natural and artificial gases or thermal energy under
    15  such permits or franchises.
    16    3. An electric corporation and a gas and  electric  corporation  shall
    17  have power to generate, acquire and supply electricity or thermal energy
    18  for  heat,  cooling  or  power in cities, towns and villages within this
    19  state, and to light the streets, highways and public places thereof, and
    20  the public and private buildings therein; and to make, sell or lease all
    21  machines, instruments, apparatus and other equipments therefor, and  for
    22  transmitting  and  distributing  electricity  or thermal energy, to lay,
    23  erect and construct suitable wires or other conductors, with the  neces-
    24  sary  poles,  pipes,  thermal  energy networks or other fixtures in, on,
    25  over and under the streets, avenues, public parks  and  places  in  such
    26  cities, towns or villages, with the consent of the municipal authorities
    27  thereof,  and  in  such manner and under such reasonable regulations, as
    28  they may prescribe.
    29    The construction, use and maintenance by an  electric  corporation  of
    30  transmission, distribution and service lines and wires or thermal energy
    31  networks  in,  over or under any street, highway or public place and the
    32  construction, use and maintenance by a gas corporation of  transmission,
    33  distribution  and  service  pipes, conduits, ducts or other fixtures in,
    34  over or under any trees, highway or public place, as  may  be  necessary
    35  for  its  corporate  purposes, are hereby declared to be public uses and
    36  purposes.
    37    § 10. Subdivision 1 of section 224-d of the labor  law,  as  added  by
    38  section 2 of part AA of chapter 56 of the laws of 2021, is amended and a
    39  new subdivision 8 is added to read as follows:
    40    1.   For purposes of this section, a "covered renewable energy system"
    41  means (a) a renewable energy system, as such term is defined in  section
    42  sixty-six-p  of  the public service law, with a capacity of greater than
    43  five megawatts alternating current and which involves the procurement of
    44  renewable energy credits by a public entity, or a third party acting  on
    45  behalf and for the benefit of a public entity; or (b) any "thermal ener-
    46  gy  network" as defined by subdivision twenty-nine of section two of the
    47  public service law.
    48    8. Any thermal energy network covered by this  section  shall  require
    49  all  contractors  and subcontractors performing construction work to use
    50  apprenticeship agreements, as defined by article  twenty-three  of  this
    51  chapter,  with pre-apprenticeship direct entry providers registered with
    52  the department.
    53    § 11. The public service law is amended by adding a new  section  66-t
    54  to read as follows:
    55    §  66-t.  Thermal  energy  network  development. 1. The public service
    56  commission shall initiate a proceeding within three months of the effec-

        S. 9422                             6

     1  tive date of this section to support the development of  thermal  energy
     2  networks  for  the  purpose  of meeting the greenhouse gas emissions and
     3  equity goals of the climate leadership  and  community  protection  act.
     4  The  matters  the  commission  shall  consider  in such proceeding shall
     5  include, but shall not be limited to, the appropriate ownership, market,
     6  and  rate  structures  for  thermal  energy  networks  and  whether  the
     7  provision of thermal energy services by gas and/or electric utilities is
     8  in  the public interest. The commission shall promulgate rules and regu-
     9  lations within two years to: (a) create fair  market  access  rules  for
    10  utility-owned  thermal  energy  networks  to  accept thermal energy that
    11  aligns with the climate justice and greenhouse gas emissions  reductions
    12  requirements  of the climate leadership and community protection act and
    13  that does not increase greenhouse gas emissions  or  co-pollutants;  (b)
    14  exempt  small-scale  thermal energy networks not owned by utilities from
    15  commission regulation; (c) promote the training and transition of utili-
    16  ty workers impacted by this act; and (d) encourage third  party  partic-
    17  ipation and competition where it will maximize benefits to customers.
    18    2.  Within three months of the effective date of this section, each of
    19  the  seven largest gas, electric, or combination gas and electric corpo-
    20  rations shall submit to the commission for review and approval at  least
    21  one  and as many as five proposed pilot thermal energy network projects.
    22  In developing the pilot project proposals, at least one pilot project in
    23  each utility territory shall be proposed in a disadvantaged community as
    24  defined in subdivision five of  section  75-0101  of  the  environmental
    25  conservation law, and if a utility proposes four or more pilot projects,
    26  at least two shall be proposed in disadvantaged communities. Each utili-
    27  ty  shall coordinate with other utility participants, the New York state
    28  energy research and development authority, and consultants  with  exper-
    29  tise  on successful pilot projects to ensure that the pilot projects are
    30  diverse and  designed  to  inform  the  commission's  decisions  in  the
    31  proceeding  on  the  various  ownership, market, and rate structures for
    32  thermal energy networks.  The  pilot  project  proposals  shall  include
    33  specific customer protection plans and shall  be made publicly available
    34  on  the  commission's  website  and shall be subject to a public comment
    35  period of no less than thirty days. Within six months of  the  effective
    36  date  of  this  section, the commission shall determine whether it is in
    37  the public interest to approve  or  modify  such  pilot  thermal  energy
    38  network  projects  and shall issue an order directing each gas, electric
    39  or combination gas and electric corporation to implement  such  proposed
    40  or modified pilot thermal energy network projects. In considering wheth-
    41  er pilot thermal energy network projects are in the public interest, the
    42  commission  shall consider whether the pilot project will develop infor-
    43  mation useful for the commission's promulgation of regulations governing
    44  thermal energy networks, whether the pilot project furthers the  climate
    45  justice  and/or  emissions  reduction mandates of the climate leadership
    46  and community protection act, whether the pilot project advances  finan-
    47  cial and technical approaches to equitable and affordable building elec-
    48  trification, and whether the pilot project creates benefits to customers
    49  and  society  at large, including but not limited to public health bene-
    50  fits in areas  with  disproportionate  environmental  or  public  health
    51  burdens, job retention/creation, reliability, and increased affordabili-
    52  ty of renewable thermal energy options.
    53    3.  Each  gas,  electric,  or  combination gas and utility corporation
    54  shall report  to  the  commission,  on  a  quarterly  basis,  and  until
    55  completion  of the pilot thermal energy network project as determined by
    56  the commission, the status of each pilot thermal energy network project.

        S. 9422                             7

     1  The commission shall post and make publicly available  such  reports  on
     2  its  website.  The report shall include, but not be limited to, the: (a)
     3  stage of development of each pilot project; (b) barriers to development;
     4  (c)  number  of  customers  served;  (d) costs of the pilot project; (e)
     5  number of jobs retained or created by the pilot  project;  and  (f)  any
     6  other  such  information the commission deems to be in the public inter-
     7  est.
     8    4. Any thermal energy network created under this section shall  demon-
     9  strate  that  the  gas  or electric corporation has entered into a labor
    10  peace agreement with a bona fide labor organization of jurisdiction that
    11  is actively engaged in representing gas and electric corporation employ-
    12  ees. The labor peace agreement shall apply to  the  employees  necessary
    13  for  the  maintenance and operation of such thermal energy network.  The
    14  labor peace agreement shall be an ongoing material condition of authori-
    15  zation to maintain and operate such thermal energy networks. The employ-
    16  ees eligible for these  positions  shall  first  be  selected  from  and
    17  offered to a pool of transitioning utility workers who have lost, or are
    18  at  risk  of  losing, their employment with a utility downsizing its gas
    19  transmission and distribution system. Such list of  potential  employees
    20  shall  be  provided by affected unions and provided to the department of
    21  labor.  The department of labor shall update and provide  such  list  to
    22  the  gas or electric corporation ninety days prior to purchase, acquisi-
    23  tion, and/or construction of any thermal energy  network  created  under
    24  this section.
    25    §  12.  The  public authorities law is amended by adding a new section
    26  1020-ll to read as follows:
    27    § 1020-ll. Pilot thermal energy network projects. Within three  months
    28  of  the  effective  date  of this section, the authority and its service
    29  provider shall submit for review to the department of public service  at
    30  least  one  and  as  many  as five proposed pilot thermal energy network
    31  projects as defined in subdivision twenty-nine of  section  two  of  the
    32  public  service  law.  Within  six  months of the effective date of this
    33  section, and upon recommendation by the department  of  public  service,
    34  the  authority  shall  determine whether it is in the public interest to
    35  approve or modify such pilot thermal energy network projects  and  shall
    36  direct the service provider to implement such proposed or modified pilot
    37  thermal  energy  network  projects. The authority shall promulgate rules
    38  and regulations consistent with the standards set forth in  subdivisions
    39  two and three of section sixty-six-t of the public service law.
    40    § 13. This act shall take effect immediately.
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