Objectives

To determine whether the 20% reduction in energy use required by Executive Order 88 was achieved by April 1, 2020, and whether the New York Power Authority (NYPA) provided the required oversight to the Affected State Entities (ASEs) in line with Executive Order 88 Guidelines. The audit covered the period from April 2010 through June 2021.

About the Program

NYPA is a public authority created in 1931 by Title 1 of Article 5 of the Public Authorities Law. NYPA’s mission through December 8, 2020 was to provide clean, low-cost, and reliable energy consistent with its commitment to the environment and safety, while promoting economic development. On December 9, 2020, NYPA revised its mission statement as follows: “Lead the transition to a carbon-free, economically vibrant New York through customer partnerships, innovative energy solutions, and the responsible supply of affordable, clean, and reliable electricity.” NYPA acts through a Board of Trustees (Board) and its Trustees are appointed by the Executive with the advice and consent of the State Senate. NYPA is a fiscally independent public corporation that does not receive State funds or tax revenues or credits for its operations. Chapter 469 of the Laws of 1989 requires the State Comptroller to audit NYPA’s management and operations at least once every 5 years.

NYPA is authorized by the Power Authority Act to help provide a continuous and adequate supply of dependable electricity to the people of the State. It generates, transmits, and sells electricity. NYPA’s primary customers are investor-owned utilities, municipal and rural electric cooperatives, high load factor industrial customers, and commercial/industrial and other not-for-profit businesses located throughout New York State. In addition, customers include various public corporations located in Southeastern New York within the metropolitan area of New York City and certain out-of-state customers.

BuildSmart NY is the program created to carry out Executive Order 88 (Executive Order or EO 88). The Executive Order, which was issued on December 28, 2012, mandated a 20% improvement in the energy efficiency performance of State government buildings by April 2020. The organizations subject to EO 88 – Affected State Entities (ASEs) – include “(i) all State Entities and departments over which the Governor has Executive Authority, and (ii) all public-benefit corporations, public authorities and commissions, for which the Governor appoints the Chair, the Chief Executive, or the majority of Board Members, except for the Port Authority of New York and New Jersey.”

This Executive Order set a goal to reduce the average Source Energy Use Intensity (EUI) by at least 20% from the baseline State fiscal year (SFY) 2010-11.

On April 1, 2020, New York introduced the BuildSmart 2025 program, which expands upon the original program and sets new objectives equivalent to a 34% reduction in energy usage from the baseline year of SFY 2014-15.

On September 20, 2022, Executive Order 22 (EO 22) was issued to ensure that State agencies follow best practices in green purchasing and in their operations by issuing new green purchasing specifications and operational directives. EO 22 further builds upon EO 88 with a goal of 11 trillion BTUs of energy savings to be achieved by 2025 through the BuildSmart 2025 program. Each ASE shall work with NYPA to achieve their allotted portion of the overall savings targeted by 2025.

Key Findings

• NYPA’s 2020 Final Report shows the State did not reach the EO 88 goal of 20% reduction in EUI by April 2020. The actual EUI reduction reported was 14.4%, and when committed projects (incomplete) are added, the reduction in EUI is 22.6%. However, NYPA’s EO 88 Final Report Executive Summary includes 123 projects of 158 that are not scheduled to be completed until as late as 2024.
• NYPA engaged a consultant because it realized it would not meet the goals of the program. Based on its consultant’s advice, NYPA adjusted the baseline data. For example, NYPA made STEM (Science, Technology, Engineering, and Mathematics) adjustments to the State University of New York (SUNY) but not to the City University of New York (CUNY).
• Despite being the administrator of the Executive Order, NYPA did not believe it had the authority to require an ASE to implement the recommendations from the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) Level II audits the entities funded.
• NYPA’s Central Management and Implementation Team did not document its efforts at monitoring ASE compliance with EO 88 and NYPA guidelines. NYPA provided a fact sheet containing data for the ASEs and their projects. NYPA did not provide minutes of meetings with the ASEs, nor was NYPA able to provide all the Quarterly Reports the EO 88 Guidelines require. Additionally, when NYPA annually reported the status of the program, officials shied away from identifying the deficiencies in ASE non-compliance and asserted that they had no recourse to enforce EO 88.

Key Recommendations

Although the audited program has concluded, the lessons learned can provide valuable insights for successor programs such as BuildSmart 2025:

• Ensure that reports of results are based on the actual performance of the program, and clearly disclose the status of the projects that have been completed and those that are in other stages of the process.
• Disclose any adjustments to baseline or annual energy usage that impact the results being reported.
• Meet with agencies and document agency responses to the recommendations from the ASHRAE Level II audits they paid for. This includes the reasons given for any recommendations the entity decides not to implement.