Dive Brief:
- New York Gov. Kathy Hochul, D, on Wednesday proposed authorizing the New York Power Authority, to finance, build, own, operate and maintain renewable energy projects.
- NYPA could capitalize on billions of dollars in the federal Inflation Reduction Act if the Legislature approves the governor’s plan, which is part of her $227 billion fiscal year 2024 budget proposal, she said in releasing the spending plan. It also would help New York meet its renewable energy targets, Hochul said.
- The proposal won partial backing from Public Power NY, a coalition of socialist and environmental organizations pushing for public ownership of energy. The Alliance for Clean Energy New York, ACE NY, a group of environmental organizations, renewable energy companies and unions, opposes the plan. It said it prefers a “combination of private enterprise, in close collaboration with government agencies.”
Dive Insight:
If approved by the Legislature, the shift will be significant for NYPA, which finances construction with bond sales to private investors and repays bondholders with proceeds from operations. The nation’s largest state power organization operates 16 generating facilities and more than 1,400 circuit-miles of transmission lines.
Hochul also called for NYPA to provide bill credits to electricity consumers in disadvantaged communities, phase out electricity production from its gas-fired peaker power plants by 2035 and support workforce training in renewable energy.
Public Power NY, which includes Democratic Socialists of America chapters in several New York cities and counties, and Sunrise Movement groups advocating on climate change issues, said Hochul’s plan “takes tentative steps in the right direction, but New Yorkers deserve to go all the way.”
It called for prevailing wages for workers in the clean energy sector and project labor agreements with unions at construction sites.
Hochul’s plan included components of the Build Public Renewables Act that passed the state Senate last year, but failed to advance in the Assembly.
Public Power NY and its allies criticized the governor’s plan for omitting a “true mandate” for NYPA to build renewables, “not just reviewing our lack of progress” and shutting peaker plants by 2035, five years later than called for in the Build Public Renewables Act.
Anne Reynolds, executive director of ACE NY, said in a statement that Hochul’s proposal falls short.
Renewable energy projects are not being deployed fast enough and NYPA should be involved in helping break down barriers to renewable energy development, she said. But ACE NY does “not agree with this approach,” she said, referring to the governor’s plan.
Reynolds said renewable energy projects are hindered by transmission constraints, “onerous permitting processes, nonstandardized project taxation and an interconnection process that takes too long and is too expensive.”
“This proposal does not solve – or even help to solve – any of these problems,” she said. “A better approach would be to harness NYPA’s resources and expertise to invest in the transmission system to unbottle opportunities to site wind and solar energy projects and open up new areas for projects, in addition to making other improvements to the investment landscape in New York.”
The New York Independent System Operator warned last June that reliability margins on the electric grid are shrinking as more fossil fuel generators retire and non-dispatchable renewables are added.
The state enacted legislation in 2019 with requirements to reduce greenhouse gas emissions 40% from 1990 levels by 2030 and 85% by 2050. The Climate Leadership and Community Protection Act also requires 70% renewable electricity and a 100% zero emissions grid by 2040.
