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New York Regulators Set Plan to Cut Natural Gas Use

The New York State Public Service Commission (PSC) Thursday established near- and long-term targets for natural gas efficiency that would decrease the amount of natural gas used by home and business owners by nearly 15% over the next 10 years.

The new targets are expected to result in an average annual reduction in gas use of 3.8 Bcf/d by 2020. Combined with reductions anticipated from other sources, estimated gas use by 2020 could decline by 14.7%, independent of any fluctuations in use caused by fuel-switching or other economic factors, said the PSC.

"As a result of our actions today, we have implemented a policy of encouraging end-uses of gas to be as efficient as they can reasonably be made," said PSC Chairman Garry Brown. "This new policy is a critical part of our unprecedented effort to reduce energy consumption statewide and to find ways to make energy use as efficient as possible."

Brown said PSC's actions would help "offset increases in energy bills, an important step at a time of financial hardship for many families. However, it is important to note that we are not adopting a policy of reducing the overall usage of natural gas. Establishing a goal for natural gas efficiency gains should not inhibit beneficial increases in the use of natural gas."

The statewide efficiency effort gives the PSC a process to approve programs and phase-in existing interim utility programs. More than 80% of New York households have access to natural gas, and most of them use natural gas or fuel oil, rather than electricity, for space heating, according to the PSC.

The program portfolio assumptions underlying PSC targets through 2011 would use a mixture of 75% residential programs, of which 20% would be allocated to low-income customers. A quarter of the programs would be designed for commercial/industrial users, with half of the programs allocated to small commercial/industrial customers and half for large commercial/industrial customers.

About $130 million would be collected annually for the gas efficiency initiative, which could be used for a range of programs, such as rebates for efficient appliances for residences and small businesses, improvements in the energy efficiency of multifamily homes and programs to support process improvements for large commercial and industrial customers. Final determination on specific project eligibility would be made in by the PSC in future implementation orders.

In establishing the targets, the order takes into account recent energy efficiency appropriations under the federal American Recovery and Reinvestment Act (ARRA), in particular the large increase in federal funding for low-income weatherization programs, the PSC said.

The New York commission's decision also follows its 2007 Energy Efficiency Portfolio Standard order, which established a goal of reducing electric use by 15% from projected levels by 2015. However, the 2007 order did not establish a quantified goal for natural gas efficiency, but rather stated that targets should be established and programs designed to optimize the state's efficient use of natural gas.

The decision is available at www.dps.state.ny.us under the "Commission Documents" section, Case No. 07-M-0548. Commission orders also are available from PSC's Files Office, 14th Floor, Three Empire State Plaza, Albany, NY 12223; (518) 474-2500.

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