The most pressing risk to the Jamestown Board of Public Utilities’ operation, at this point, are decisions regarding clean energy at the state level.

The BPU board was presented with their annual Risk Management Program Update during the board’s July board meeting. That program is one way the utility works to make sure power is available and affordable as the energy market in New York state changes to meet the 2019 Climate Leadership and Community Protection Act. Brad Bentley, BPU energy and gas resources manager, presented the annual required presentation to the board, beginning with comparing load history and customers versus loads from this year with last year.

Risk mitigation strategies for the BPU from this section include SC-6 and Key Account programs, the business development coordinator who does projects and events such as the Retool NY conference and facility studies, customer awareness and staying ahead of customer needs, advanced metering infrastructure, local involvement with community organizations, high reliability standards and address the impacts of state’s Climate LEadership and Community Protection Act passed in 2019 that includes encouragement of electrification of vehicles and buildings.

Bentley then discussed costs and rate history through the New York Power Authority and some potential rate increases going forward. Risk mitigation strategies in regards to NYPA include life extension and modernization of the BPU’s operation, long term agreement contract management, New York Association of Public Power involvement to track and manage NYPA Rate Stabilization Reserve Programs, monitoring of invoices, long term trend tracking and analysis, energy schedule planning and post evaluation, and having a regular and good relationship with NYPA.

“We do have our contract secured through 2040 for our supply,” Bentley said.

On the market side of things, Bentley said that the New York Independent System Operator controls the market for wholesale electricity. The ISO is an independent organization formed from the New York Power Pool in 1999 that is responsible for maintaining New York’s electric grid and competitive wholesale electric market place. Bentley briefly looked over the ISO ICAP Market, saying ICAP stands for the New York Installed Capacity market that serves to maintain reliability of the bulk power system by procuring sufficient resource capability to meet expected maximum energy needs plus an installed reserve margin. There is also a UCAP, or Unforced Capacity, which is calculated monthly for generators based on historic availability and maximum demand output.

After discussing the BPU’s UCAP financials, which drives how much per megawatt the BPU gets paid, Bentley discussed the risk mitigation strategies in regards to the ISO and the market. He also looked at ancillary services, risk mitigation strategies for that, National Grid rates and the Clean Energy Standard.

“The way the Clean Energy Standard works for New York state is, we have it based on what we can share, so those costs are allocated from New York State, based on your load,” Bentley said.

Bentley went over current approved CES programs and potential future programs, along with current and future cost exposure for BPU customers. Bentley also discussed Renewable Energy Credits, which are a way for the state to collect money that is used to subsidize new renewable generation such as wind and solar power generation, and the BPU’s risk mitigation strategies for those. Bentley wrapped up his presentation with a few more strategies and numbers and graphs.

After the presentation, General Manager David Leathers noted that this is a “very complicated process.”

“If you look back 20 years, the BPU used to have a financial consultant … out of Washington,” Leathers said. “There was a two month lag between what was presented to us and what ended up in people’s bills.”

Leathers said they took a leap to start this Risk Management Program in-house, and the work talking about risk mitigation is an every day, every week process. Risk mitigation is also in fuel adjustment charges to customers, Leathers said, adding right now those risks are specifically in hydropower and the Clean Energy Standard charges.

“A lot of stuff at the state level, this stuff is going to be raining down so we’ll see how the residents in the state and electric rate payers in the state respond to this,” Leathers said. “Renewable energy credits and zero emission energy credits have been in place for a while and there’s more coming and they’re very significant.”