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System Benefits Charge



Snapshot 

In 1996, the New York State Public Service Commission (PSC) called for the establishment of a System Benefits Charge (SBC) to fund public policy initiatives not expected to be adequately addressed by New York's competitive electricity markets. In 1998, the PSC specified SBC funding levels for three years and the framework for energy programs targeting efficiency measures, research and development and the low-income sector. The SBC was renewed for a five year period in 2001 with increased funding and additional focus on programs designed to achieve peak load reductions.

In December 2005, the PSC extended the SBC program or SBC III for an additional five year period (7/1/2006-6/30/2011) with an annual funding level of $175 million. The previous SBC funding level was approximately $150 million annually.

In October 2011, the PSC extended to SBC program for another five-year period (1/1/12-12/31/16) with an annual average budget of $98.8 million.

The SBC program portfolio has been primarily administered by the New York State Energy Research Development Authority (NYSERDA). The SBC programs are designed to serve the diverse needs of New York energy consumers from residential homeowners and tenants to manufacturing plants and commercial office buildings. More information about these programs, including eligibility requirements, can be found on NYSERDA's web page: www.nyserda.org



SBC Five-Year Plan

The PSC in October 2011 approved a new, five-year (1/1/12 to 12/31/16) SBC program or SBC IV valued at $469 million for a suite of energy-related technology and market-development programs to be administered by NYSERDA. The PSC’s extension of the SBC program provides a renewed vision of the program as a means for testing, developing and introducing new technologies, strategies and practices that build the statewide market infrastructure to reliably deliver clean energy to New Yorkers.



On November 11, 2006 NYSERDA petitioned the PSC for reallocation of certain SBC funds.  The PSC granted the petition and requested that NYSERDA update it's Operating Plan accordingly.



SBC Renewal Process 2005-2006

The New York State Department of Public Service (DPS-staff to the PSC) engaged in an SBC program review with the objective of advising the PSC regarding the future of the SBC beyond its funding expiration on June 30, 2006 . On January 28, 2005 , the Secretary to the PSC issued a notice inviting public input on a series of questions critical to Staff's review, with comments due by March 4, 2005.  A notice seeking additional comments on a legislative proposal related to SBC funding was released on April 1, 2005.


The DPS Staff reviewed these comments and prepared a proposal for consideration by the Commission entitled "Staff Proposal for the Extension of the System Benefits Charge (SBC) and the SBC-Funded Public Benefit programs" dated August 30, 2005. Interested parties were asked to comment on the Staff proposal. The details for submitting comments were articulated in the August 31, 2005 notice.
Comments in response to the August 31, 2005 notice are available below.
On December 14, 2005 the PSC approved a five year extension of the SBC program beginning July 1, 2006. The annual funding level was increased from $150 to $175 million.  The Order was issued and effective on December 21, 2005.
Staff approved NYSERDA's five year (2006-2011) SBC Operating Plan on March 3, 2006.

SBC History 1996-1999

The PSC established the SBC in its Opinion No. 96-12, issued on May 20, 1996. The SBC was designed to fund, during the transition to full electric retail competition and possibly thereafter, certain public policy initiatives not expected to be adequately addressed by competitive electric markets. These SBC-funded initiatives were in the areas of:


The PSC's Opinion No. 98-3, issued on January 30, 1998, specified initial SBC funding levels, funding period( July 1, 1998, to June 30, 2001) and named NYSERDA as the PSC's third-party, independent SBC administrator. During this period, SBC collection rates averaged 0.85 mills per kWh, ranging from highs of 1.0 mills per kWh at Consolidated Edison Company of New York, Inc. (Con Edison) and at New York State Electric and Gas Corporation (NYSEG) to a low of 0.6 mills per kWh at Niagara Mohawk Power Corporation (NMPC). Most electricity customers in the state contribute to the SBC.

SBC operating arrangements were finalized among the PSC, DPS staff and NYSERDA in the March 1998 SBC Memorandum of Understanding (MOU). The MOU also directed NYSERDA to solicit public input in developing its draft SBC Operating Plan for the initial three-year SBC period, and to establish an outside SBC advisory group, which would also function as an independent SBC program evaluator.

The PSC's July 2, 1998 Order, approved, with modifications, the SBC Operating Plan. Three-year funding for the SBC was established at $234.3 million. The funding was divided among the following program areas:


Of the $234.3 million total, $172 million----about three-quarters of the total-was allocated to the NYSERDA-operated statewide program, termed "Energy $mart." NYSERDA selected numerous operating contractors for Energy $mart by means of competitive solicitations. Remaining SBC funds were allocated to the utilities to continue some low-income programs and to meet certain previously-incurred demand-side management (DSM) and R&D obligations.



SBC History 2000-2004

The PSC had specified funding for the SBC from July 1, 1998 to June 30, 2001. In anticipation of the funding expiration, DPS staff publicly released a proposal on October 3, 2000 recommending that existing SBC-funded public benefit programs be expanded and extended for a period of five years. The proposal resulted in extensive feedback from the public, which was carefully considered by the PSC.

At its session of January 24, 2001, the PSC released its SBC Extension Order, in Case No. 94-E-0952, of January 26, 2001. The Order extended the SBC program from July 1, 2002, through June 30, 2006, and increased the SBC's annual funding level to $150 million. It also stipulated that future SBC collections from participating utilities would be according to their individual shares of statewide electric revenues during a historic reference year, 1999. For example, customers of Central Hudson Gas and Electric Company (CH) are now paying about 1.0 mill/kWh, while Con Edison customers are now paying about 2.0 mills/kWh. A major new focus of the extended program is on achieving electric peak load reductions to help insure a stable supply of electricity for all New Yorkers.

The PSC provided further direction to the SBC program with two orders issued in 2001. The PSC's April 17, 2001 SBC Order reported how NYSERDA should use approximately $11.9 million annually in supplemental SBC funds, and the PSC's July 3, 2001 SBC Order reallocated minor dollar amounts from the statewide program to the individual low-income energy affordability programs of two participating utilities, NMPC and NYSEG.

After consultation with DPS staff, NYSERDA formally filed its operating plan June 12, 2002 SBC Operating Plan, 2001-2006 (1.22 MB). This new operating plan reflects the PSC's revised overall funding level for the extension of nearly $750 million. This amount specifies $436.3 million for energy efficiency offerings, including $16.5 million for special consumer education and outreach activities; $113.7 million for low-income energy affordability programs; and nearly $200 million for R&D projects, including programs fostering distributed electric generation and combined heat and power installations.

Of the six participating SBC utilities 1, four continued minor, individual SBC efforts through the extension period, at an overall budget of $59.4 million. Chief among these efforts were low-income programs at NMPC and NYSEG, and the satisfaction of certain prior DSM obligations by RG&E. On May 30, 2003, the PSC directed that SBC funding for the NMPC and NYSEG low income programs be transferred, effective July 1, 2004, to NYSERDA citing the advantages of operational and administrative efficiencies and increased program uniformity.



Program Evaluation Reports

The NYSERDA web page contains numerous evaluation related reports focusing on the SBC program portfolio. The documents include annual and quarterly reports and information about obtaining detailed program evaluation reports for specific programs.



You may need Adobe Acrobat Reader to view pdf files.


1. During the initial three-year SBC period, Rochester Gas & Electric Corporation (RG&E) ran its own minor SBC program but did not financially support the statewide Energy $mart program. During the SBC extension, RG&E continued its own minor SBC efforts and is paying its electric revenue-determined share of the Energy $mart program.




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System Benefits Charge updated: 02/13/2014 09:13:39 AM

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