Comments on the Build Public Renewables Act
July 28, 2022
On June 1, 2022, the New York Senate passed S.6453-C, a bill that directs NYPA to purchase, develop, and operate renewable energy projects in New York State, among other provisions.
The solar industry unequivocally agrees with the intent of this bill in that it is critical for New York State to meet its clean energy targets and that State authorities have a crucial role to play in this effort.
However, we dispute the premise that the actions proposed in this bill will accelerate solar development, save ratepayer and/or taxpayer costs, or create additional jobs in comparison to the current framework in New York State. We also have sincere concerns about NYPA’s capability and capacity to efficiently develop, engineer, construct, maintain, and operate a significant fleet of renewable energy generation projects. Additionally, we are worried that this Act if implemented would divert essential and limited NYPA resources away from its existing clean energy roles, all while failing to address the most significant remaining hurdles to meeting our CLCPA goals.
NYPA currently has distinct and important missions in helping New York achieve our climate, resiliency, and equitability goals; chief among NYPA’s role is grid management and planning.
NYPA’s function in public transmission and energy storage investments is key to connecting upstate renewables to downstate residents, while also curtailing unnecessary transmission buildouts. Similarly, the distributed solar and storage industries are key to avoided transmission costs; New York could save over $28 billion in total resource costs by leveraging additional local solar and storage from the private sector. NYPA has established expertise and experience in grid planning as owners of 1,400 circuit miles of high-voltage transmission lines along with sixteen power plants.
Yet, solar developers are increasingly struggling to find hosting capacity to add more clean energy projects to New York’s antiquated grid system. This will not change by passage of this bill. Instead, NYPA could reasonably focus more state resources on upgrading its own bulk transmission network, in coordination with helping investor-owned utilities in NYPA’s territory efficiently upgrade their distribution networks. In this effort, NYPA could also play a more active role in the ongoing Coordinated Grid Planning Process (CGPP) with the intent of establishing a more robust and effective plan to efficiently upgrade New York’s bulk transmission and distribution networks.
NYPA also has significant roles in electrification and energy efficiency, however, has apparently struggled to deliver on these existing clean energy imperatives.
Regarding electrification and the necessity to build out electric vehicle (EV) charging infrastructure, a February 2022 audit by the NYS Comptroller determined: “NYPA’s Evolve NY installation of EV high-speed chargers did not reach its phase 1 goals, and Evolve NY charger deployment is as much as 2 years behind schedule.” Regarding energy efficiency, NYPA can have a significant role in advising, financing, and implementing deep building retrofits in all publicly owned buildings in New York, from the village police station to New York City Hall to the Empire State Plaza to the entire operations of the Department of Corrections.
Also, NYPA should have an established and specific commitment to public schools and prioritize Title 1 schools to be an agent for eliminating pollutants in communities that often suffer from high asthma rates because of disinvestment and previous practices for fossil fuel plant siting. On the other hand, asking NYPA to expand its mission to also include renewable project development risks overwhelming NYPA’s already strained staff and further diluting the benefits it is currently tasked with providing to New York residents.
NYPA has already been granted broad authority to procure renewable energy projects, yet has failed to materialize this prerogative.
NYPA was granted expanded authority in 2019 and 2020 to buy renewable energy on behalf of any public entity in New York State; to have priority in building new transmission upgrades; to build transmission infrastructure offshore; and to build electric vehicle charging stations. NYPA pledged in 2019 to procure one million megawatt- hours of renewable energy, yet ultimately procured zero; and again in 2021 NYPA issued a large solicitation which resulted in two awards, yet by our understanding neither award has materialized an actual contract for electricity generation. Before we rely further on NYPA to meet our CLCPA goals, perhaps NYPA could be inquired as to why they have failed to meet their existing clean energy commitments.
NYPA’s ability to finance new renewable energy projects while concurrently abandoning its fossil fuel investments is questionable at best.
Currently, while only a portion of renewable energy development is subsidized via NY-Sun and Clean Energy Standard programs, this Act would mandate that the whole development cycle and associated costs for clean energy projects be borne by the customer/ratepayer/taxpayer. This exacerbates development risks and costs for NYPA and its customers, as any time a project fails to move forward at whatever stage for whatever reason, the State would be on the hook for that lost investment. For reference, NYPA’s current financing model for energy efficiency programs passes financial risks on to customers. This begs the question whether or not this Act envisions a similar NYPA financing model to serve often much more expensive/risky renewable energy projects?
This Act also raises questions about how this will impact NYPA’s balance sheet, and concurrently its financing rates; aggressive expansion of NYPA’s debt may well lead to a downgrading of its currently beneficial credit rating, thereby locking New York State development cycles into uncertain and fluctuating finance rates. Concurrently, this may serve to jeopardize existing NYPA programs that rely on beneficial financing rates.
Also, early forced retirement of NYPA’s fossil fuel plants could lead to stranded assets for the State, further exacerbating financial burden to NYPA’s ratepayers. Furthermore, there are questions about how NYPA would efficiently find the available expertise to scale up and skill up in-house staff to enact such a wholesale change in their current mission, absent expensively pilfering expertise from the private development sector.
NYPA has the faculty to advance CLCPA goals outside scope of BPRA.
NYPA could support distributed renewables and efficiency services by relieving roadblocks for project financing by providing grants or access to upfront capital at no or very low cost, rather than transferring direct development risk to customers as proposed by this Act. Further, NYPA could establish these programs so that they support disadvantaged communities and do not create new debt burdens. NYPA could also facilitate the deployment of Advanced Metering Infrastructure (AMI), the democratization of utility and customer usage data, and increased access and transparency in the interconnection and grid planning processes with help identifying equitable transmission and storage infrastructure upgrades.
Though this Act is well-intentioned, it seemingly fails to address the main remaining barriers to distributed clean energy development in New York State: interconnection agreements through distribution utilities, not owned by NYPA; permitting through local jurisdictions; tax agreements through local IDAs or municipalities. The BPRA ultimately finds itself as an unnecessary intrusion into a market that has seen tremendous growth thanks to private industry development. The BPRA provides no evidence that NYPA can more effectively or efficiently deploy solar projects in light of the aforementioned barriers, and risks stifling private development at a time when accelerating solar deployment is critical to achieving New York’s renewable energy goals. NYPA should focus on its existing obligations, and not adversely interfere with the private development model that has yielded tremendous success. NYPA is at its best and provides the most value when it successfully partners with private sector renewable and transmission developers.