Obscure? Perhaps; But No Misnomer: SBC-Funded Energy Efficiency in New York State Significantly Benefits Our Economy and Environment

The New York Times today posted a series of four enlightening articles by reporter Ken Belson on Energy Efficiency* policies, programs, and notable projects happening throughout New York State.  The lead article titled, “An Obscure Fee Pays for Efficient-Energy Projects” sets the scene by describing how an often over-looked and poorly understood energy resource—energy efficiency—and it’s primary vehicle for funding programs** in New York State—the Systems Benefit Charge (SBC)—is in fact a core component in enabling New York to simultaneously grow its economy and achieve a cleaner environment. 

Averaging around above $150 million per year from a miniscule per-mill charge on investor owned utility customer bills, the SBC has garnered over $2.8 billion in private capital financing to improve the ways in which New Yorkers use energy: enabling people to live more comfortably and breathe cleaner air in apartments and homes, improve lighting in schools and hospitals, and deploy new technologies to help New York industries and business thrive in a rapidly changing economy.  In light of shrinking state budgets around the nation in the midst of a deepening recession, energy efficiency offers a secure and profitable investment; and in fact provides an opportunity for state governors to avoid being labeled as “one of fifty Herbert Hoovers” that Paul Krugman noted in today’s New York Times Op-Ed column.

Administered by the award-winning New York State Energy Research and Development Authority (NYSERDA) since 1995, the success of the SBC speaks for itself—from 1998 to 2007:

  • 4,700 in-state jobs created
  • $2.5 to $1 ratio of raising private capital from initial public (SBC) funded investments
  • $570 million of avoided costs each year on monthly electric utility bills
  • 650 megawatts of avoided electricity generation—equal to a large central station power plant

Two accompanying articles in the series, “Power Reduction Keeps Ice Rink Alive, and Solvent,” and “In Queens, Pepsi Is Bottling Soda Under Its Own Steam” show how two very different businesses, both of whom provide valuable employment opportunities and economic development in their respective communities, used cost-shared incentives from SBC funded programs to dramatically reduce their energy bills and increase company profits. 

New York's Governor Paterson was quick to learn about these benefits from energy efficiency and boldly set a goal of achieving a statewide 15 percent reduction in trended energy usage by 2015.  Although some kinks remain in sorting out who and how the additional SBC dollars will be administered (e.g., NYSERDA, utilities, contracted firms using rebates, loans, etc.), New Yorkers be rest assured: the investment in energy efficiency is a good one that pays valuable dividends with green jobs, economic growth, and a cleaner environment.


*For further discussion on NRDC’s longstanding view promoting energy efficiency, check out Peter Lehner’s recent blog post after he participated in a panel discussion on the topic at the National Press Club in Washington, D.C.