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New York Utility Regulators Issue Further Guidance on Utility Thermal Networks

The New York State Public Service Commission recently provided guidance for utilities in the state submitting or re-submitting proposals to develop utility thermal networks.

Under the Utility Thermal Energy Network and Jobs Act that became law in July 2022, the New York PSC required the state’s seven largest investor-owned utilities to each submit at least one proposed thermal network pilot project for review.

The newly issued guidance applies to New York’s seven large IOUs — Consolidated Edison, Orange and Rockland Utilities, New York State Electric & Gas, Rochester Gas and Electric, National Grid USA, Central Hudson Gas & Electric, and National Fuel Gas Distribution — as well as the Long Island Power Authority.

The law aims to reduce greenhouse gas emissions by the creation of utility-scale infrastructure projects that connect multiple buildings into a shared thermal network as an alternative to using fossil fuels for space heating, water heating, and cooling needs.

The PSC said the need for utility thermal energy networks is also driven by the need to reduce or eliminate greenhouse gas emissions under the state’s Climate Leadership and Community Protection Act, noting that buildings are the largest source of GHG emissions in New York State, accounting for 32 percent of overall GHG emissions.

The PSC said the 14 pilot proposals submitted, totaling up to $435 million, represented “a good first step in the development of utility thermal energy network projects, however they included insufficient detail to enable the Commission to fully approve them at this time.”

The commission said its new guidance will enable the further development of the utilities’ proposals and establish “a staged approach that will provide structure, transparency, and clarity regarding what requirements must be met to advance pilot projects.” Utilities will need to submit revised filings no later than December 15. If deemed compliant with the requirements of the order, pilot projects will advance to the next stage, which includes pilot project engineering design and the development of a preliminary customer protection plan.

Then, based on that information and further public comment, the PSC said it would issue subsequent orders addressing whether the individual pilot projects are in the public interest and should proceed to full implementation or be modified.

In addition to creating the regulatory framework for the thermal energy network, the PSC said it is also working with the State Department of Labor 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 promote good jobs for New Yorkers in the expanding decarbonization sector.

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