11.16.23 - Decarbonization efforts approved for Con Edison’s steam system
' ALBANY, N.Y. — The state’s utility regulator on Thursday approved higher rates for the steam system that serves the Empire State Building, United Nations and other iconic Manhattan buildings.
Why it matters: The Public Service Commission’s approval of the first rate plan for Con Ed’s steam system since 2014 charts a path to reduce emissions and comply with the state’s climate law. Buildings that rely on the steam — currently produced with fossil fuels — are also looking to comply with New York City’s building emissions requirements.
Details: The rate plan, approved at the commission’s regular meeting, increases revenue by about $78 million for Con Edison through higher rates on steam customers. Department of Public Service staff said the bulk of the increase is driven by Con Ed's property taxes, declining steam sales, depreciation of assets and infrastructure investments to support the state’s climate law.
The New York City mayor’s office, Natural Resources Defense Council, Con Ed, DPS staff and a group of large energy users supported the proposal. The three-year rate plan covers the period from November 2023 through October 2026.
Decarbonization efforts: The steam system is viewed as a potential tool to support New York City and state emissions reduction efforts — if it can move away from relying on fossil fuels. A joint planning effort by New York City and utilities called for the steam system to move toward utilizing low-carbon fuels, particularly renewable natural gas.
Con Ed’s steam system could help decarbonize difficult to electrify buildings, that report said.
Part of the rate plan requires Con Ed to develop a pathways report on how to decarbonize the steam system, which currently serves more than 1,500 large buildings from the tip of Manhattan to 96th street — including large apartment buildings, office buildings and commercial spaces.
The company is also directed to craft a steam business development plan to look at expanding the system, which will inform a potential discounted rate for buildings in disadvantaged communities and New York City Housing Authority buildings that switch from oil or gas.
Additionally, the rate plan includes some funding for initial decarbonization efforts. That includes $3 million to conduct preliminary work to install an electric heat pump at the East River steam plant, which could reduce the amount of fossil fuels used there. The plan also includes $500,000 for preliminary work on a small district hot water loop system to serve customers not on the steam system using waste heat. '