New York State System Benefits Charge

I attended a presentation recently given by a representative from Pathstone, which is described on its website as a “not-for-profit regional community development and human service organization providing services to farmworkers, low-income families and economically depressed communities throughout New York, Pennsylvania, New Jersey, Ohio, Indiana, Vermont, Virginia and Puerto Rico. PathStone has successfully operated a wide array of programs funded by federal, state, local, faith-based and private sources.”

The representative, from Pathstone’s Energy Program, gave an overview of various energy-related benefits available, including home energy assessments, assistance with applying for matching grants, and low-interest loans. It sounded great, until I asked him how they were funded, and I’m pretty sure I understood that their main funding was from something called an SBC charge added to people’s RG&G bills. He also mentioned that rental properties with fewer than 4 units can apply for assistance with grants for energy efficiency upgrades (e.g., a new water heater or insulation), and that the basis for determining grant eligibility is not based on the assets or income of the landlord, but rather the income of the tenant seeking the upgrade. This seemed like a bit of a scam to me, although I can understand that a low-income tenant can be burdened by a higher-than-necessary heating bill if a landlord is too stingy to improve the building’s energy efficiency.

Still, it prompted me to look at my RG&E bill, since the representative said the monthly SBC charge was roughly $4. Now, I know my bill is not representative of the average usage, but my last month’s SBC/RPS charge was $20.50, and last winter, well, suffice it to say it was much higher (it’s calculated at $.00726/kwh). So what is this SBC/RPS charge? The New York State Department of Service website describes the System Benefits Charge (SBC), established in 1996, as funding “public policy initiatives not expected to be adequately addressed by New York's competitive electricity markets. In 1998, the PSC specified SBC funding levels for three years and the framework for energy programs targeting efficiency measures, research and development and the low-income sector. The SBC was renewed for a five year period in 2001 with increased funding and additional focus on programs designed to achieve peak load reductions.” The SBC continues to be renewed in 5-year increments, and the current annual average budget is roughly $100 million. The most recent “extension of the SBC program provides a renewed vision of the program as a means for testing, developing and introducing new technologies, strategies and practices that build the statewide market infrastructure to reliably deliver clean energy to New Yorkers.”

I couldn’t find a reasonable explanation of the Renewable Portfolio Standard (RPS), but I did see that the SBC/RPS charge includes the Energy Efficiency Portfolio Standard, which funds rebates that encourage people to purchase and install high-efficiency energy appliances (from something as substantial as installing Energy Star certified appliances to… installing energy-efficient light bulbs. What? Yes, even with no income verification, if you follow the proper procedures, you can get 10% back, up to $300, for changing your light bulbs! All of this funded by this subtle monthly fee on your own bill!). And this is how sneaky the fee is – even though it acts and feels like a redistributive tax, it itself is taxed by New York State.

  

So if you upgrade your appliances, or furnace, or, yes, light bulbs, do not feel guilty about applying for a rebate from the New York State. Because in fact, all you’re doing is getting your own money back (and maybe a bit of mine…).

For more information on the SBC charge, visit: http://www.nyserda.ny.gov/About/System-Benefits-Charge