Press Releases

LIPA and NYSEIA Announce Roadmap to New Residential Time of Day Rate

December 15, 2021

NYSEIA

FOR IMMEDIATE RELEASE


* New Time of Day Rate Will Allow Customers to Save Money By Using Less Electricity During Peak Hours, Reduce Carbon Emissions, and Support Electrification and Residential Battery Storage


* LIPA Remains Committed to Leading New York in Deploying Solar Towards Governor Hochul’s 10 Gigawatt by 2030 Target


* Agreement Provides for a Three-Year Phase-In of the Customer Benefit Contribution for New Net Metered Customers, Bringing Equity to the Funding of Environmental and Low-Income Assistance Programs


UNIONDALE, NY, December 14, 2021—The Long Island Power Authority (LIPA) and New York State Solar Energy Industries Association (NYSEIA) today announced a roadmap to develop a modern standard residential rate for electric customers on Long Island and the Rockaways. The new Time of Day (TOD) rate, which will be developed and adopted over the next three years with extensive stakeholder input, will allow customers to save money by using cheaper electricity during off-peak hours.


LIPA remains committed to leading deployment of solar in New York and achieving Governor Hochul’s 10 gigawatt by 2030 target. As part of this proposal, LIPA will phase in the Customer Benefit Contribution (CBC) for net-metered customers—which exists in every other part of the state and provides funding for environmental and low-income assistance programs—over three years while the new Time of Day rate is developed. LIPA will also fund an additional “declining block” of incentives for residential solar projects paired with an energy storage system that participate in LIPA’s Dynamic Load Management program.


“Time of Day rates are an innovative way to help customers save money and the environment. Customers will have more control of their electric bills, carbon emissions from the electric grid will decline, and those that adopt electric vehicles, efficient heating, or energy storage will save even more money.” said LIPA Chief Executive Thomas Falcone. “The three-year phase-in of the Customer Benefit Contribution will provide new solar customers on Long Island with a generous amount of time to become part of an important environmental and low-income assistance program that is already in place in the rest of the state,” Falcone added.


“Solar and battery storage systems deliver significant financial savings when paired with Time of Day rates, in addition to resilient, clean, backup power. The solar industry is excited to partner with LIPA and the PSC to develop rates predicated on market forces that will accelerate clean energy deployment, deliver financial and environmental benefits to all ratepayers, and help build the utility grid of the future,” said David G. Schieren, NYSEIA Board Chair and EmPower Solar CEO.


Rory Christian, Chair of the Public Service Commission and CEO of the Department of Public Service, said: “We are excited to partner with LIPA and the solar industry to develop a sustainable and equitable approach to achieve Governor Hochul’s target to deploy 10 gigawatts of solar in New York by 2030. We are continuously evolving the statewide strategies that are necessary to keep our clean energy sector strong, protect consumers, and ensure reliability standards are met. This initiative with LIPA to develop new rate designs for Long Island customers will inform our statewide efforts to achieve our state’s ambitious clean energy goals.”


“This deal removes barriers and will encourage the growth of solar on Long Island. Our region has a great, growing solar industry and we are here to support it,” said Senator Todd Kaminsky.


“I am pleased that LIPA will work with the solar industry to establish a package to ensure the future growth of renewable energy, such as solar energy. Our future is at stake and we must remain committed to empowering every New Yorker to move toward renewable energy options in order to meet the goals set forth in the nation-leading Climate Leadership and Community Protection Act,” said Assemblyman Fred Thiele.


“This collaborative initiative from LIPA and the solar industry is great news for Long Islanders. The new Time of Day Rate will empower customers with new opportunities to save money, provide crucial funding for community services, and help our state meet its clean energy goals,” said Senator Kevin Thomas.


“The agreement for the new residential time-of-day rate is a sensible solution to continue to encourage residential solar power and support our clean energy economy, help manage the grid during peak times, and save customers money. This is a great example of the business community and LIPA working together to achieve renewable energy goals, help Long Island residents, and support innovation,” said Matt Cohen, President & CEO of the Long Island Association.


“Working together, LIPA and the solar industry have successfully threaded the energy needle by continuing to incentivize residents to go green while ensuring those now utilizing solar contribute fairly to maintaining our region’s electric grid. Our hope is that this proven model is replicated across the State of New York,” said Kyle Strober, Executive Director, Association for a Better Long Island.


“More flexible rate structures are a critical part of moving forward with our clean energy transition. I applaud the leadership of LIPA and NYSEIA for tackling the complexity that accompanies forging our way ahead. I’m optimistic that this collaborative approach will allow Long Island to lead on clean energy deployment and better serve ratepayers and the public good, particularly the interests of communities that have been historically underserved,” said Sammy Chu, Chairman USGBC Long Island Chapter.


“The Long Island Business Council supports the proposed reformed contract between LIPA and PSEG. The clearly defined benchmarks in the contract are sound and will provide transparency to ratepayers going forward. Coming together to craft an agreement that works for both parties and their customers is the true art of negotiation. We are pleased to see that this is also the case with the agreement on the CBC,” said Robert Fonti, Suffolk Chairman, and Rich Bivone, Nassau Chairman, of the Long Island Business Council. “This agreement will continue to help drive the rising tide of economic prosperity through the creation of jobs and commerce that will help to float all businesses and boats. As we remain vigilant in protecting businesses from excess costs, we are pleased that the parties involved in the reformed contract and the CBC will continue their efforts at advancing clean energy technologies in a financially responsible manner to better the future of Long Island.”


“This agreement between LIPA and the solar association is needed to avoid negatively impacting the solar installer businesses on Long Island, at a time when it is critical to grow the industry to expand the use of clean renewable energy. The electric energy section will change dramatically in the coming years to achieve a carbon-free electric grid by 2040, it is important for LIPA to implement new policies such as time-of-day pricing, to facilitate that transformation and that those policy changes are timed in coordination with the changes to the rules for solar energy,” said Neal Lewis, Executive Director, Sustainability Institute at Molloy College.


Many utilities have introduced Time of Day rates, which better reflect the cost of providing electricity. Reducing electric use during a few peak hours in the summer reduces LIPA’s need to buy energy from sources that are less environmentally friendly and more expensive. The new Time of Day rate will provide lower rates when cleaner power is abundant and higher prices during the few peak hours when power is more carbon intensive. Developing and implementing new or enhanced electric rate designs is a key part of achieving New York’s Climate Leadership and Community Protection Act goal of a carbon-free electric grid by 2040.


Time of Day rates will bring even greater savings for solar customers with residential energy storage, allowing batteries to power homes during summer peak hours and use grid-energy during cheaper off-peak hours. Time of Day pricing also reduces cost for customers with electric vehicles and heat pumps, allowing customers to use cheaper off-peak hours for extra savings. Time of Day pricing will not be mandatory—customers will still have the option of a fixed rate. LIPA will deploy programs, services, and tools to help customers minimize summer peak usage and bills.


Utilities that have deployed a standard Time of Day rate have seen peak usage decline 6–8 percent or more during the summer months, as customers shift more of their usage to off-peak times of day. The savings are passed along to customers through lower Time of Day rates. The results on Long Island and the Rockaways will inform future statewide utility rate design, as the Public Service Commission takes into consideration differing levels of Advanced Metering Infrastructure deployment and other market characteristics in the rest of New York.


Some facts about Time of Day rates:

* Customers will have the option for a fixed rate—the new Time of Day rate will not be mandatory

* All savings from Time of Day rates are passed along to customers in the form of lower off-peak rates and bills

* More than 80 percent of the hours in a year will have lower, off-peak pricing

* Weekends and holidays are always off-peak pricing, while summer peak hours make up less than 5 percent of the total hours in a year

* Time of Day rates support electric grid modernization and shift energy production to cleaner, lower carbon sources of energy


The Customer Benefit Contribution charge, which exists across New York State and will be phased in on Long Island and the Rockaways over three years, was developed through an extensive public stakeholder process led by the New York Department of Public Service (DPS) and will ensure that all customers contribute proportionally to the cost of providing important customer benefit programs, such as energy efficiency, heat and transportation electrification, renewable energy, and low-income bill discount programs for all customers. Under this new agreement, the full CBC charge for new net-metered LIPA customers will phase in over three years, while a new standard Time of Day rate is developed. LIPA and NYSEIA will also explore additional rate designs for the CBC that similarly fund important customer benefit programs and are complementary with the new Time of Day rate.



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About New York Solar Energy Industries Association


Founded in 1994, New York Solar Energy Industries Association (NYSEIA) is a trade association representing more than 160 solar energy firms in New York and is dedicated to advancing solar energy use and deployment across the state.


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