nypa customer energy solutions developing the services side of the business
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NYPA Customer ENERGY SOLUTIONS Developing the services side of the business. Multiple Intervenors Annual Meeting - October 8, 2014 Michael Huvane – Vice President, Marketing Kristin Barbato – Vice President, Customer Energy Solutions. NYPA Background. - PowerPoint PPT PresentationTRANSCRIPT
NYPA CUSTOMER ENERGY SOLUTIONS
DEVELOPING THE SERVICES SIDE OF THE BUSINESS
Multiple Intervenors Annual Meeting - October 8, 2014
Michael Huvane – Vice President, Marketing
Kristin Barbato – Vice President, Customer Energy Solutions
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NYPA Background• Largest state public power organization in the U.S. • Public authority of the State of New York• Owns and operates 16 power plants• Operates more than 1,400 circuit-miles of the state’s
transmission system• Does not use any tax revenues or state credits• One of New York State’s valuable partners in economic
development
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NYPA Organizational Structure
Gil Quiniones President & CEO
James Pasquale SVP ED&EE
Michael Lupo
VP MA&A
Michael Huvane
VP Marketing
Kristin Barbato
VP CES
Paul Belnick
VP EE
Energy EfficiencyCustomer Energy
Solutions
Economic DevelopmentAccount Management
Power Contracts
PricingLoad Forecasting
Tariff Administration
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ReCharge New York• Governor Cuomo’s statewide economic
development electric power program• 910 Megawatts (MW)
• 50% NYPA hydro / 50% market power
• Competitive application process: Focus on job creation or retention for existing, expanding or new businesses
• At least 200 MW for attracting new businesses to NYS or the expansion of existing businesses and up to 100 MW for small businesses and not-for-profits
• Long-term contracts up to 7 years
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ReCharge New York
• 656 MW allocated for retention• 81 MW allocated for expansion• 660 customers• 383,000 jobs retained/created • $31.5 billion capital investment
commitments
Update as of
October 2014:
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Western NY (WNY) Hydropower Programs
• Low cost power available to facilities located within a 30-mile radius of NYPA’s Niagara Power Project
• Consists of 445 MW of Replacement Power (RP) and 250 MW of Expansion Power (EP), with 20 MW of EP available to businesses located in Chautauqua County
• Awarded on a competitive basis to businesses creating new jobs, expanding or building new facilities
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Western NY Hydropower Programs
• 651 MW of 695 MW allocated to 126 customers
• Tied to the retention and creation of over 31,500 jobs in Western NY
• Over $2.3 billion in capital investments committed to in Western NY
Update as of
October 2014:
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Western New York Power Proceeds Act
• Signed into law by Governor Cuomo in 2012• Created Western NY Power Proceeds Allocation Board
• Consists of 5 members• Solicits and reviews applications• Makes recommendations for awards to the NYPA Trustees
• Established Western NY Economic Development Fund
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WNY Economic Development Fund
• Net earnings from the sale of unutilized Expansion and Replacement power are accrued and deposited into the WNY Economic Development Fund (WNYEDF)
• A minimum of 15% of the Fund must go towards energy-related projects
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WNY Economic Development Fund
• Total fund deposits of over $37 million to date
• Over $14 million in approved awards have supported the creation/retention of nearly 3,000 jobs
• Total aggregate cost of the 24 projects supported to date through the fund is in excess of $200 million.
Update as of
October 2014:
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Preservation Power• Low cost power from NYPA’s
St. Lawrence-FDR Power Project
• Available to eligible businesses in Franklin, Jefferson and St. Lawrence Counties
• Awarded to businesses that want to expand and to new businesses that would like to locate in the region.
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Preservation Power
• 484 MW of 490 MW allocated to 4 customers
• Tied to the creation and retention of nearly 1,500 jobs in the three counties.
• Over $600 million in capital investments committed to
Update as of
October 2014:
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North Country Economic Development Fund (NCEDF)
• Loan fund created from $10 million deposit by Alcoa under terms of their long-term agreement with NYPA for the sale of hydropower.
• For economic development in the 7 North Country counties as well as Herkimer County and the Akwesasne Mohawk Reservation
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NYPA’s Customer Energy Solutions
• The Challenge• The Opportunity• The Vision• The Approach• Key Next Steps
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The Challenge• General
• Customers are seeking cost savings• Capital projects are their top priority• However, they’re interested in a wide range of services• Customers desire ease of use, responsiveness, and technical capability
• Specific to NYPA• Customers are confused about NYPA’s offerings• Customers view NYPA’s processes as lengthy and bureaucratic• Customers perceive NYPA’s pricing of capital projects as more expensive
than average
“Setting up a new vendor is a complicated process, so if we could buy multiple services from NYPA that would make things easier. We’ve been pleased with NYPA services thus far, so we would expect these other services to be at that high level as well.”
Source: Market Intelligence Report conducted for NYPA, July and August, 2014
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The Opportunity• Customers view NYPA as trustworthy, responsive, and knowledgeable• NYPA’s capital project implementation abilities match the needs of customers• NYPA’s ability to provide easy access to multiple vendors matches customers’
desire for a wide range of services• Customers are open to partnering with NYPA on new energy projects • NYPA can address customers’ concerns by realigning its service functions
and processes, and marketing its offerings more clearly
“This ‘economic potential’ is valued at $100.9 billion in net benefits (in 2012 dollars). The ‘achievable potential’ (in New York State), a subset of the economic potential, is valued at $30 billion in net benefits (in 2012 dollars). ‘Achievable potential’ represents the cost effective energy efficiency potential given current market barriers related to technologies, spending, energy efficiency goals, and policies.”
Source: Market Intelligence Report conducted for NYPA, July and August, 2014
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The Vision• Customer Energy Solutions – Start up!• Goals
• Build the “demand” side of NYPA’s business to be on par with the “supply” side of NYPA’s business
• Become and remain our customers’ trusted energy advisor• Serve as a marketplace for accessing energy services• Internally coordinate and externally present “one NYPA” with fully
integrated service offerings• Proactively address the energy needs of our customers• Recover costs on a net CES basis
• Core Ideology
NYPA will deliver results, value, and satisfaction for customers
The Approach: Customer’s Future View of NYPA
Tariffs
Financing
Fees
Efficiency Distributed Generation
Advanced Infrastructure
Data Analytics Management & Operations
Planning Engineering Environmental & Regulatory
Generation, Transmission, & Supply
Traditional Utility
Capital Investment
Advisory / Operational
Cost RecoveryEnergy Services & Solutions
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The Approach: NYPA’s Internal “Supply Chain” Functions
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Marketing (“Strategy & Programs”)
Development (“Inquiry to
Order”)
Delivery (“Order to
Remittance”)
Support (“Invoicing,
Metrics, Performance”)
Public
SchoolsLocalStateFederal
The Approach: Customer Segmentation
PrivateResidentialNot-for-
ProfitIndustrialCommercial
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The Approach: Priority Service & Customer Matches
Exte
nsiv
e Ex
perie
nce,
Re
sour
ces
No
Reso
urce
s,
Expe
rienc
e
Lim
ited
Reso
urce
s,
Expe
rienc
e
Mod
erat
e Re
sour
ces,
Ex
perie
nce
Not a Current Customer
Supply-Only Customer
Limited Service Customer
Extensive Service Customer
Deepen Relationships
Gai
n Ex
perie
nce
Operations for State &
Local Segments
More Assessments & Projects for State & Local
Segments
Assessments & Projects for Commercial, Industrial, &
NFP Segments
Serv
ice
Read
ines
s
Customer Relationship21
More Assessments & Projects for Public School
Segment
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Key Next Steps
• Business Plan integrates CES functions with current and
future programs / initiatives
• Other Strategic Initiatives
• State Policy – Reforming the Energy Vision (REV)
• Customer Programs (EE INC, K-Solar, BuildSmart NY, NY Energy
Manager)
• Begin CES functional alignment with customer engagement
• Establish the near-term and long-term budget to support services expansion
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Thank you…
Michael Huvane
New York Power Authority
(914) 390-8117
Kristin Barbato
New York Power Authority
(914) 390-8252