New York State’s energy czar Richard Kauffman has a broad remit, from building a billion dollar “Green Bank” to remaking shamed utility LIPA, and he’s hit the ground running after taking the job 5 months ago.
“The Governor [Cuomo] announced a billion dollar green bank, so we’re doing the work to set up that entity,” Richard Kauffman, New York State’s Chairman of Energy and Finance recently told Breaking Energy.
The green bank is a fund that draws in private-sector money to match public funds with the goal of spurring investment in clean energy technologies. “The bank’s strategy will be to focus on areas where market gaps exist for financing in the private sector,” said Kauffman.
“The bank will offer credit enhancement products to get them [private banks] to lend more than they otherwise would,” he explained.
The proposal intends to remove clean energy sector uncertainties that can arise from relying too heavily on federal grants, policy, and state-level subsidies. Instead of just handing out money to clean energy companies, the bank will use low-risk bonds and loans to help cleantech projects access the capital they need.
“We don’t want to be in the subsidy business,” Kauffman told Breaking Energy.
Restructuring the Long Island Power Authority is another major initiative Kauffman’s team is undertaking. LIPA came under fire from many sides in the aftermath of Hurricane Sandy, when disorganization, at best, and incompetence, at worst, left millions without power for an extended period. “We are working on a plan that allows LIPA’s operations to be privatized, while the state still owns the assets,” said Kauffman.
The focus is on “Utility 2.0,” he said, speaking about rethinking the utility business model and regulatory regime during a time of increasingly distributed generation – like wind and solar – and rising customer bills.
“We want to work with utilities to see an electric utility system that results in affordable bills, more value to customers and also sees a cleaner, less carbon-intensive system,” Kauffman said.
The large, centralized power plant model is increasingly questioned, as more renewable energy sources connect to the grid and more businesses embrace microgrids as a way to meet power requirements. “Policy makers and industry need to think down the road about what kind of regulatory regime and system we want to have in the state.”
However, while power generation sources and methods are changing, large utilities are not known for being particularly nimble institutions seamlessly shifting course as dictated by technology, regulatory and market currents. Many are entrenched incumbents interested in maintaining the status quo.
Nevertheless, to successfully persevere through this disruptive environment, utilities will need to adapt at some level, or risk being left behind. Asked about feedback from New York’s utility companies, “We’ve had some very constructive conversations,” is the most Kauffman would divulge.
Kauffman will be giving a keynote address at the New York Energy Week Opening Ceremony taking place June 24 at the New York Academy of Sciences in New York City. “We are part of New York and value our relationship and collaboration with our partners in the city,” he said regarding the decision to participate in the first annual New York Energy Week.
Breaking Energy is a NYEW media partner.
