New York encourages electrification with new grid planning process, affordability pilot

Dive Brief:

• The New York Public Service Commission on Thursday approved an energy affordability low-income pilot and launched a proceeding to identify and develop future grid infrastructure needs. Both programs aim to support the state’s efforts to electrify homes and transportation.
• A new grid planning framework will ensure utilities are coordinating across geographies and service territories as they expand their distribution grids to accommodate growing demand for power, the PSC said. The commission directed major utilities to propose a long-term coordinated planning process to study and identify necessary upgrades.
• And New York’s Energy Affordability Guarantee will provide about 1,000 low-income customers with “tailored bill assistance” so they spend no more than 6% of their annual household income on electricity when they fully electrify their space and water heating through the EmPower+ program, according to a statement from Gov. Kathleen Hochul’s office. 

Dive Insight:

Electricity demand in New York could almost double over the next two decades, driven by the electrification of heating and transportation and the development of energy intensive industry, according to the state’s grid operator. Regulators last week took steps to ensure the necessary grid buildout is efficient, and the shift away from fossil fuels is not cost prohibitive for low-income families.

“Affordability is a top priority, and we’re making much needed investments to help low-income New Yorkers affordably electrify their homes,” Hochul said. Funding for the multi-year affordability pilot is provided through a $50 million appropriation in the New York 2025 fiscal year budget.

Eligible customers must have annual household income equal to or lower than 60% of the state median income and must also be electrified through the EmPower+ program, which provides no-cost and subsidized energy efficiency and clean energy upgrades for low-to-moderate income households.

In May, New York became the first state to offer home energy rebates funded through the Inflation Reduction Act, making almost $40 million available to low income households through an expansion of the Empower+ program, for insulation and air sealing, heat pumps for space and water heating, and the electrical upgrades necessary to enable those retrofits.

The energy affordability program will be administered by electric and gas utilities, and it will provide eligible customers with bill payment assistance through monthly tiered discounts. The pilot program will help the PSC fill in “important information gaps regarding the electrification of low-income households,” according to the governor’s announcement, including the incremental electricity consumption and cost associated with operating heat pumps across different customer and housing profiles.

“The Energy Affordability Guarantee will enable low-income families to afford their monthly utility bills while reducing their reliance on fossil fuels by fully electrifying their homes,” Office of Temporary and Disability Assistance Commissioner Barbara Guinn said in a statement.

A new grid planning process

Development of a new grid planning process is necessary to support the state’s transition away from fossil fuels, PSC Chair Rory Christian said.

“The Commission is establishing a statewide, collaborative planning framework to ensure that the utilities are ready to support New Yorkers who are increasingly choosing electric vehicles and heating for their homes, business and transportation needs,” Christian said in a statement. “The purpose of this effort is to identify timely electric grid upgrades to support electrification across a number of sectors of the economy.”

The PSC directed major utilities to file a proposal for a “long-term coordinated planning process to study and identify necessary upgrades to support electrification.” The process must account for new electrification loads including the transportation sector and buildings such as housing, or industrial loads related to economic development. 

“The rate at which consumers are electrifying buildings and vehicles has the potential to outpace the existing grid planning processes,” the PSC said. “The new planning framework will also ensure that the utilities leverage shared, best-in-class information and techniques to ensure that each utility is coordinating across geographies and service territories.”

The PSC said it will require utility proposals to include at least two options related to load forecast development: one relying on data from other proceedings, including the work produced by the newly-established Coordinated Grid Planning Process, and utilities’ own bottom-up forecast of granular electric demands.

The PSC noted that the development of a new integrated planning processes, along with the studies and regulatory approvals, “will take a significant amount of time” and there may be “upgrades that, due to load growth expectations or construction time, need to be planned or fully constructed in advance of implementation of the integrated planning process.”

Because of the time involved, the PSC said utilities must submit filings within three months outlining “urgent upgrades” required in their territories. Another filing, due in four months, must propose the new long-term planning processes.