In July 2015, the New York State Public Service Commission (PSC) issued an order establishing a Community Distributed Generation program, effective October 19, 2015. The program is intended to make renewables and other forms of distributed generation (DG) available to end users who are otherwise unable to take advantage of them.

The program framework is centered on net metering of power, authorized under New York Public Service Law § 66-j and § 66-l, from solar generators up to 2 MW; farm waste electrical generators up to 1 MW; CHP and fuel cells up to 10 kw; and wind generation of not more than 2 MW for commercial customers, 500 kw for farm customers and 25 kw for residential customers. Community DG enables a group of customers to join together as members of an entity that is able to contract with a DG developer.

Up to 40 percent of the electricity generated by a project may be consumed on-site by the host, which serves as an anchor for the project. If the project is remotely sited, one member of a group of customers may take up to 40 percent of the output. The balance of 60 percent must be net metered to community members whose energy demand may not exceed 25 kw and all members must be located in the same utility service territory. A sponsor may be any single entity, including a generation facility developer, an energy service company (“ESCO”), a municipal or other government entity, an LLC, a partnership or another form of business or civic association. Community DG can be used to reduce energy costs and is particularly useful in multi-family housing, including co-ops and condos, where the building owner and tenants are separately metered.