The New York Public Service Commission on Thursday approved several programs to speed up the state’s transition to renewable energy.

The measures include money for communities hosting solar or wind resources and those losing old power plants and their tax payments, new regulations on handling utility and customer data related to energy usage, and a mechanism for utilities to bypass rate case proceedings in local transmission planning.

The PSC also granted a certificate of environmental compatibility and public need to New York Transco to build a new, double-circuit 54-mile 345/115-kV transmission line, estimated at $530 million, along the Hudson River from near Albany down to Duchess County (Case No. 19-T-0684). The commission also approved the 20-mile, 345-kV Empire State Line project by NextEra Energy Transmission New York in the western part of the state (Case No. 18-E-0765).

New York state agencies last month released a study that urges faster permitting, planning and approval to build the transmission needed to integrate nearly 40 GW of new renewable energy into the grid over the coming decades. (See NY Grid Study Pushes Meshed OSW Tx, Coordination.)

The commission’s fast pace is being driven by New York’s Climate Leadership and Community Protection Act (CLCPA), which requires the state to consume 70% renewable electricity by 2030, switch to 100% zero-emission power by 2040 and reduce greenhouse gas emissions to 85% below 1990 levels by midcentury.

Utility Leverage

The PSC unanimously approved a “Phase One” local transmission planning mechanism that allows utilities to bypass the usual rate case process and acquire funding approval by petitioning the commission for such authority (Case No. 20-E-0197).

The state’s investor-owned utilities on Nov. 2 jointly filed a report in which they collectively proposed to undertake about $7 billion in transmission and distribution upgrades by 2025 (Phase One) and another $10 billion in projects for the following five years (Phase Two). (See Meshed OSW Tx Grid May Work Best, NY Officials Hear.)

The commission’s order said that relying strictly on rate case cycles to provide for cost recovery of proposed Phase One projects may delay achievement of CLCPA goals.

“However, we expect that this mechanism will be needed only in the short term … and once those [CLCPA] deadlines and requirements are incorporated into the utilities’ capital planning processes and rate plans, the commission does not anticipate a continuing need to rely on petitions for incremental funding of Phase One projects,” it wrote.

“In my eyes, this is a thoughtful and practical item founded on an open and thorough process founded on ample opportunity for input, and in fact ample and helpful uptake on that opportunity,” said PSC Chair John B. Rhodes. “It represents the next milestone to developing out the grid that we know we will need, in today’s case both on the distribution and local transmission side of the grid.”

“This really does mark the change in how transmission planning moves from serving native load, exclusively at lowest cost, to a more environmentally sensitive and environmentally driven system,” Commissioner John Howard said. “Most of the items here on Phase One were going to go forward regardless of the CLCPA, and we do get some tremendous environmental benefits by their construction.”

Most comments on the docket supported approval of the proposed Phase One projects, but the state’s Utility Intervention Unit, the City of New York and LS Power Grid New York filed comments opposing some or all of the projects on the basis that they either go beyond the scope of the PSC’s initial grid study order last May or that the utilities failed to provide adequate details or cost information.

In its comments, Multiple Intervenors, a coalition of about 60 large industrial, commercial and institutional energy customers, asked “that more robust cost-containment measures be applied to CLCPA-driven projects and especially those approved outside of the rate case process.” The group recommended NYISO’s public policy transmission planning process as a framework under which “developers submit highly detailed proposals” to allow the ISO to assess viability and sufficiency.

Relying on Property Taxes

The PSC unanimously approved a program that provides bill credits to residential electric customers in municipalities in which major renewable energy facilities are located, possibly dampening local opposition to such projects (Case No. 20-E-0249).

The type and size of the facility determine the amount of the credit. Any new solar or wind project greater than 25 MW that goes into service after April 2020 will be required to pay the utility serving the affected municipalities an annual fee of $500/MW and $1,000/MW of nameplate capacity, respectively.

Howard was not entirely pleased with the host community benefit program but said he was encouraged by the provisions to assess its effectiveness every two years.

“In the interim I would urge all municipalities that border host communities for large-scale renewable projects engage in the siting process to assure that any affected residences receive compensation under this program,” he said.

Two other energy-related items on the consent agenda had one or two votes in opposition, either from one or both of the Republican members on the five-member commission.

Commissioner Diane X. Burman provided the only dissenting vote on creating an integrated energy data resource that will provide a platform for collecting, integrating, managing and accessing customer and system data from the state’s energy utilities (Case No. 20-M-0082).

“While I think that the proposal for a statewide integrated energy data resource may have some merit, it is something we should not undertake as a commission right now,” Burman said, adding that the arrangement needs more discussion. “Frankly, I think we can and should wait until the new, permanent chair to decide if this is the direction … to have staff deeply invested in.”

Both Burman and Howard voted against authorizing the New York State Energy Research and Development Authority (NYSERDA) to provide approximately $12.5 million each year through 2029 to help local communities offset the loss of property taxes that typically occurs when a large power plant closes (Case No. 20-E-0473).

The plant closing mitigation program will not be backed by imposing incremental funding obligations on ratepayers. Instead, NYSERDA would transfer Regional Greenhouse Gas Initiative (RGGI) funding to Empire State Development for the program, with aid not to exceed $112.5 million in total through 2029.

“I must say I’m very troubled by this item for several reasons, first being the use of RGGI funds to compensate communities for loss of property tax revenues due to power plant closures,” Howard said.

The legislature has the power to compensate the loss of tax revenue in various ways, and the new program “takes off any veil” from RGGI and related fees on emitters or ratepayers being taxes, and in fact fungible, thus able to be used for purposes not foreseen when the environmental programs were created, he said.

“This is a perfect example of our state’s overreliance on property taxes to fund essential local services,” Howard said. “No state taxes energy infrastructure to the extent that we do in New York. … We also need to understand that massive capital investments to meet the carbon reduction goals of the CLCPA will only exacerbate this very flawed system.”

The PSC approved a resolution to petition Gov. Andrew Cuomo to increase the number of commissioners on the board from five to seven, given the increasing workload for commissioners and staff. The session closed with PSC Secretary Michelle Phillips reading a resolution from staff and commissioners thanking Rhodes, whose term ended Feb. 1, for his “faithful service to the residents of New York.”