New York: Getting the Price Right for Energy Efficiency

Share Button


New York officials are scrutinizing the cost of energy efficiency – especially when it’s needed fast – as they prepare for the possible shutdown of a nuclear plant.

Energy efficiency insiders will want to keep an eye on this public service commission proceeding for two reasons. First, it offers a potential 100 MW in business opportunity. Second, wide disagreement exists about what the resource will cost.

The 100 MW of energy efficiency would help make up for the potential loss of Indian Point. The nuclear plant’s federal licenses expire over the next couple of years, and it’s not clear whether or not it will win relicensing.  State officials say they must prepare now. New York City relies on Indian Point’s power.

Consolidated Edison wants to provide 100 MW of permanent peak reduction as part of larger mix of generation and transmission to replace the plant.

At issue is the price tag.

Con Edison estimated it will cost as much as $300 million to achieve 100 MW of peak energy reduction. The New York State Energy & Research Development Authority pegs the cost at $155.5 million. And Consumer Power Advocates, an alliance of hospitals, colleges and other large non-profit energy users, estimates $200/kW, compared with Con Edison’s $3,000/kW.

In an April 19 order, the public service commission called the costs “sobering.” The commission wants to find ways to bring the price down. Competitive solicitations can do this, but they are time consuming, the commission said. And the schedule is tight – by energy planning standards.  Licenses for Indian Point’s two units expire in September 2013 and December 2015.

The commission ordered Con Edison to file a plan within 45 days that provides more granular cost estimates and offers ways to lower the price tag.

Why were Con Edison’s initial costs so high? It has to do with the need for speed. The utility believes it must offer high incentives and rebates to get customers to sign on quickly enough to meet the 2016 reduction goal.

The strategy, which targets mostly large energy users, calls for several approaches to peak reduction, such as fuel switching, renewable distributed generation, lighting, and building management and control systems combined with efficient air conditioning.

The programs may go forward even if nuclear plant doesn’t close, according to Garry Brown, chairman of the public service commission

“One of the things we will be looking at is the value of some of these upgrades  —energy efficiency — even if Indian Point stays open. At least some of the projects would probably fall into the category of something that may be valuable under any circumstance,” Brown said at the commission’s April meeting.

Stay tuned. The commission wants to have the program goals and budgets in place before the end of the summer.

Share Button

About Elisa Wood

Elisa Wood is the chief editor of She has been writing about energy for more than three decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.


  1. I have heard Energy Efficiency described as the low hanging fruits, ie easily picked. Since most energy is used to heat/cool homes and offices, that is where most energy can be saved. To reduce energy consumption, money can be spent on new efficient boilers, loft and wall insulation and double glazing etc, but the most cost effective short term measure that we can all adopt now is to turn the room thermostat to its ideal level and wear appropriate clothing. What we need to know is what the ideal temperature is, what we should be wearing and are we anywhere near the ideal. I have developed the eco-wand system to do this. It measures the temperature and humidity of the room and shows what is ideal for the conditions. In effect, it shows the boundary between comfort and economy allowing users to reduce their energy bills now without waiting for the costly refurbishments. Maybe governments should be adopting this approach now.

  2. Dr. UN Nandakumar says:

    The major concern all over the world is how to fix the cost for energy efficiency. Hence the issue is important to all

  3. Hello Elisa,

    I have been working in the areas of AC Power Metering, DC Power Metering, Parallel LED Lightings, and DC Power Line Carrier Communication for some years.

    My view on the price tags for energy would be always comparing the cost of producing 1kW in renewable engergy and the cost of saving 1kW in energy efficiency. However, most of time, people is easily misled by calculating the equipment costs for the energy projects. But, hidden costs of these projects may be surprsingly high and turned into nighmares later. On one hand, there is an O&M cost associated with renewable energy farms; on the other hand, there is an unexpected installation and maintenance cost associated with LED lighting & control retrofits for existing buildings.

    Just some thoughts shared. Thanks and wish you the best!