A new audit by the state fiscal watchdog faults New York’s slow progress toward its climate protection goals and warns that the full cost of the effort still has not been quantified, five years after the goals were signed into law.
State Comptroller Thomas DiNapoli said July 17 the audit by his staff found New York was moving in the right direction but better planning, monitoring and risk assessment are needed.
The audit finds fault with the state Public Service Commission (PSC), which with its staff in the Department of Public Service (DPS) draws up regulations for pursuing the climate goals. To a lesser extent, it finds fault with the New York State Energy Research and Development Authority (NYSERDA), which awards the development contracts that will help achieve the climate goals.
In their rebuttals, the PSC and NYSERDA stand by their efforts. The PSC said the audit discounts much of the work done and overlooks some of the factors that have limited progress. NYSERDA thanked the Office of State Comptroller (OSC) for its detailed analysis and said it has taken steps to address some of the feedback, but it pushed back on other criticisms.
The audit began in early 2022 and encompasses a period when the state’s pipeline of contracted clean energy projects swelled impressively amid strong policy support then collapsed amid strong industrywide headwinds.
The Department of Public Service and NYSERDA predicted in a draft review issued July 1 that the state will fall short, perhaps far short of its first major target: 70% renewable energy by 2030. (See NY Expects to Miss 2030 Renewable Energy Target.)
In announcing the audit, DiNapoli said: “New York has been a leader in its efforts to reduce greenhouse gas emissions and the threats caused by climate change, and identifying existing and emerging challenges will improve the likelihood that we succeed.”
CLCPA Turns 5
Then-Gov. Andrew Cuomo (D) signed the state’s landmark Climate Leadership and Community Protection Act (CLCPA) into law on July 18, 2019, surrounded by supporters of the measure.
Many blue states tout their climate protection and decarbonization efforts, and some even claim to be nation leading. New York’s effort legitimately could be called one of the strongest in the nation at the time — former Vice President Al Gore, who shared the 2007 Nobel Peace Prize for his efforts to protect the planet, joined Cuomo for the signing ceremony.
But New York also would sit near the top of any list of states where renewable energy projects are slow and expensive to complete.
It took more than three years just to produce a scoping plan for the CLCPA. Meanwhile, the clock was ticking on the CLCPA’s legal mandates of 70% renewable energy by 2030, 100% emissions-free power by 2040 and greenhouse gas emissions at least 85% lower than 1990 levels by 2050.
While New York was planning, drafting and reviewing, the world moved ahead. A global pandemic and a European war drove up costs, rendering untenable dozens of contracts for 11 GW of renewable energy projects.
For the past nine months, New York has been scrambling to regain its lost momentum. It has had partial successes, at a cost in time and money.
Findings, Recommendations
The audit highlights several findings:
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- PSC is using outdated data and at times incorrect calculations for planning purposes.
- PSC has not started to address all existing and emerging issues that could increase demand for electricity and lower supply.
- PSC has taken steps to address some risks and issues but has not begun to formally review progress toward CLCPA goals, raising the risk that the CLCPA’s goals will be missed.
New York has not quantified the cost of transitioning to renewable energy, nor provided a reasonable estimate, nor specified a source of funding. This leaves the cost to utility ratepayers who already have faced sharp rate increases over the past two decades and in many cases already are having trouble paying their bills.
The audit highlights several recommendations:
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- Begin the required comprehensive review of the CLCPA, including assessment of progress toward the goals, distribution of systems by load and size and annual funding commitments and expenditures.
- Continuously analyze risks to minimize impact on ability to meet CLCPA goals.
- Analyze the expected cost of the clean energy transition and of meeting CLCPA goals, then update that analysis periodically and report the results to the public.
- Determine how much of this cost ratepayers reasonably can be expected to cover and look for alternative sources of funding.
PSC Response
As is customary, the OSC audit included the response of the audited agencies. The comments by PSC Chair Rory Christian and the counter comments by the auditors added 25 pages to the 29-page audit.
PSC also sent a prepared statement to NetZero Insider:
“DPS is pleased to note that OSC found that the PSC and NYSERDA have taken considerable steps to transition to renewable energy in compliance with the Climate Leadership and Community Protection Act (CLCPA) and Clean Energy Standard (CES), but is disappointed that OSC overlooks several significant steps taken and factors that have impacted progress to date.
“Indeed, in the five years since the CLCPA was enacted, the PSC modified the existing CES to comply with the law, directed NYSERDA to continue undertaking solicitations for new renewable projects in the face of unprecedented and evolving market conditions outside of New York’s control, approved $5 billion in transmission investments to support renewable projects, worked with federal, State and local governments on renewable energy initiatives that have reduced the ratepayer costs of complying with CLCPA (potentially saving ratepayers billions of dollars), partnered with the Legislature to streamline the siting laws for renewables and transmission projects, advanced critical planning proceedings to ensure the energy transition is done in a safe and reliable manner, and expanded utility affordability initiatives.
“Much of this work appears to have been discounted in the OSC report, and the Department’s response highlights several instances where it disagrees with OSC’s findings.”
NYSERDA Response
The audit’s criticism of NYSERDA was narrower, focusing on some of the methodology it used for evaluating bids and awarding contracts. NYSERDA President Doreen Harris’ response to the audit was proportionately narrow, at just four pages.
In an interview, she said:
“The comptroller found us to be in full compliance with the Public Service Commission orders. And ultimately, the recommendations within the audit are almost exclusively already being incorporated within our record keeping and the implementation of our solicitations.”
Harris said goals such as 70% renewables by 2030 are more than aspirational or inspirational; they establish a market size to attract the considerable private sector investment and consumer support that is needed for CLCPA to succeed.
The idea is that a maturation of technologies and markets needs to happen for CLCPA’s goals to be achieved, and the existence of those goals helps these markets and technologies mature.
Harris sees this happening already in registrations for battery electric vehicles, heat pump sales and the installed capacity of community solar in New York.
“Change happens in ways that reach inflection points, inflection points where the market reaches a level of maturity and uptake that it essentially takes off,” she said. “When I look at the data, not even in the super long term but literally over the last couple of years, [it shows] we have reached those inflection points [with] many technologies that are necessary to not only make progress toward these goals, but also be well on our way toward achieving them.”
Despite all the cost escalations and contract cancellations seen in the past year, progress is being made in New York, even if there is less than had been anticipated.
Harris spoke to NetZero Insider on July 17 after helping lead a ceremonial groundbreaking for Sunrise Wind, an offshore wind project that will be among the largest capacity additions to the state’s grid in decades — 924 MW — if it is completed as planned. Its initial contract was among the dozens canceled statewide in 2023 and 2024, but it was brought back into the portfolio in June. (See Empire, Sunrise Wind Back Under Contract in NY.)
More Money
But what of the cost concerns the audit raises?
In July 2023, the PSC commissioners heard the first annual report from DPS staff on efforts to implement the CLCPA. A conservative estimate was offered of money already spent or authorized to meet CLCPA goals: $43.76 billion.
But there was no estimate of how much more would be needed, which took some commissioners aback. (See Energy Transition Costs Give NY Utility Commissioners Pause.)
A year later, Harris did not offer any cost estimate. She pointed instead to the Scoping Plan, an extensively detailed publication stretching 445 pages where cost estimates are buried within calculations — the benefits to society of decarbonizing will be $400 billion to $415 billion greater than the cost, for example.
These figures were derived before the massive cost increases of 2023. And they include assumptions such as $1.9 billion in savings over a 30-year period from decreased frequency of trip-and-fall accidents in low- and moderate-income households.
The auditors are not the first observers frustrated in their quest for a clearly stated price tag.
The unknown costs of implementing the CLCPA became a frequent talking point for John Howard in his recently concluded five-year tenure on the PSC, which neatly overlapped the first five years of the CLCPA’s existence.
“My own personal back-of-the-envelope thinking is about a half a trillion,” he told NetZero Insider, but that is only an estimate, one he had to produce because no one had a hard number for him.
The audit was correct in flagging the risks of not stating the full cost, Howard said.
“Oh, yeah — I mean, they are self-evident. On the issue of cost transparency, look, you’re a reporter. We have several good reporters trying to get these numbers. They just don’t want to be released. They can be known. They can be estimates. But the sticker shock will scare people away, so it doesn’t happen.”
He continued: “The hard numbers are an illusion because you can’t find them. If the Office of State Comptroller can’t find the numbers, well, then who’s gonna find the numbers?”
Howard said the integration analysis used to calculate the negative net cost of implementing the CLCPA is the wrong pitch for New Yorkers.
The costs are being revealed piecemeal, but they are broad and immediate: Utility bills going up 2% for a particular wind farm or 3% for a particular transmission project, for example. The benefits, meanwhile, will be realized unevenly over decades through hard-to-quantify metrics such as reduced asthma symptoms or fewer cases of carbon monoxide poisoning.
“It’s easy to say ‘yeah, we can afford it’ when you don’t tell anybody what it’s gonna cost ya,” said Howard, adding that he does believe climate change is real and needs to be addressed.
“Do it as transparently as possible, because if you’re asking New Yorkers to pay this giant new vig, you need to get them to say yes. By not telling them, it’s the worst thing you could do.”
