New York energy czar calls for complete overhaul of electricity system

New York energy czar calls for complete overhaul of electricity system
By Mark Hallum

Richard Kauffman, chairman of Energy and Finance for New York, stood before an audience of representatives from clean energy companies throughout the city and state Tuesday to discuss Gov. Andrew Cuomo’s Reforming the Energy Vision program. The goal is to reduce greenhouse gas emissions by 80 percent, generate 50 percent of electricity from renewable sources and decrease energy consumption in buildings by 23 percent by 2050.

The presentation took place at the Queens Chamber of Commerce at 72-20 Astoria Blvd. was accompanied by remarks from President of National Grid New York Ken Daly and Con Edison VP Matthew Ketschke. The discussion centered on the financial preparations for a major overhaul of the current energy infrastructure across the state.

Kauffman said an important aspect of making REV happen is integrating renewable energy sources without causing rates for utilities to go up.

“What we’re doing in New York really involves meaningful change of everything. The utility industry is a regulated business and businesses which provided very reliable service for a very long time. But the world’s changing and we’re asking the utilities to change with the world. That’s been a real challenge for the industry and for government,” he said.

According to Kauffman, the current electricity grid was set in place by George Westinghouse and Nikola Tesla back in the 19th century and was never designed for large-scale renewable energy so that large power plants could distribute electricity to city centers. The power system of tomorrow, he proposed, must have electricity being distributed on a supply-and-demand basis and site flexibility to create a more renewable integrated and hybrid-like grid.

Kauffman contended that it was not the lack of technology keeping this grid from becoming a reality but rather the failure of policy and regulations.

“If we want to build a new energy system, we need to put in new policy because the old policies were just rebuilding the old system,” he said, adding that policy initiative is central to REV.

The current system is also financially inefficient as well, according to Kauffman. There are currently no incentives for utilities companies to look to more energy efficient alternatives, he said. Energy companies do not have the financial opportunity to innovate, serve customers and make a profit for themselves. Another example of financial inefficiency Kauffman cited is the fact that electric utilization capacities are designed to accommodate the amount of energy used during the hottest days of the year. Average utilization is about 54 percent. By managing these financial aspects better, utility companies can increase their profit margins and invest in modern infrastructure.

Updating the housing stock is another challenge for the REV program. Some 70 percent of the houses in the state are more than 70 years old, and updating them under the current system of offering government grants for updates would take 500 years, Kauffman said.

Kauffman said it presents a business opportunity for companies to do these updates with no money down from the customer or utilities companies. Businesses that take part in this aspect of installing renewable energy in homes could profit from a customer origination fee from utilities companies.

In closing, Kauffman said it would be easy for utility companies to keep things the way they are, but more profitable and efficient to incorporate the changes proposed by the state government.

Reach reporter Mark Hallum by e-mail at mhallum@cnglocal.com or by phone at (718) 260–4564.