Memorandum in Strong Opposition

S.8384 (Parker) / A.9531 (Cusick)—AN ACT to amend the public service law, in relation to providing net revenues from utility-owned large-scale renewable generation projects to low-income customers and authorizes utility companies to own such projects.

We strongly oppose S.8384 (Parker) / A.9531 (Cusick). This bill would allow utility ownership of renewable generation, in contravention of over 25 years of New York State energy policy that shields electricity ratepayers from the risk of project development. Re-exposing ratepayers to this risk is not in the public interest, especially given rising energy costs. Having utilities build renewables and charge the full cost to ratepayers will not help achieve the targets of the Climate Leadership and Community Protection Act (CLCPA) any faster or cheaper, partly because utilities cannot get through the Renewable Energy Siting Law (Executive Law Section 94-c) process any quicker than private independent power producers (IPP), as everyone needs to follow the same requirements for environmental review.

The New York State Public Service Commission’s (PSC) determination that IPP companies can build and operate generation more efficiently than utilities was one of the main reasons the PSC decided to restructure the electric utility industry in New York over two decades ago. Consistent with this policy, the PSC barred the State’s monopoly utilities from constructing and owning renewable generation because of the potential that such ownership would inhibit entry by private market participants, which could result in less competition and higher costs in the long run. The PSC ruled that a utility should only own distributed energy resources if market participants are unwilling to address the need and no one in the market is providing the solution, which is not the case in New York.