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Green Alert: The Need to Rescue NewYork's Renewable Energy PortfolioStandardEdward Hyde ClarkePublished online: 08 May 2014.
To cite this article: Edward Hyde Clarke (2014) Green Alert: The Need to Rescue New York'sRenewable Energy Portfolio Standard, Environmental Claims Journal, 26:2, 107-125, DOI:10.1080/10406026.2014.872970
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Environmental Claims Journal, 26(2):107–125, 2014Copyright C© Taylor & Francis Group, LLCISSN: 1040-6026 print / 1547-657X onlineDOI: 10.1080/10406026.2014.872970
Green Alert: The Need to RescueNew York’s Renewable EnergyPortfolio Standard
EDWARD HYDE CLARKE
New York is set to miss the 2015 Renewable Energy Portfolio Standard deadline,due in a large part to over-reliance on in-state generation projects. Althoughmuch of the current discussion and articles written about New York energypolicies are focused on hydrofracking, clean and renewable energy should notbe lost in the discussion and the state cannot afford to miss a major energypolicy goal. This article provides an analysis of the current energy policies of theCuomo administration and highlights a major out-of-state generation project,the Champlain Hudson Power Express.
INTRODUCTION
New York law requires that a state energy planning board (board) conveneand discuss clean and renewable energy in the state and make policy recom-mendations on the state’s energy plan moving forward.1 One component ofthe state energy plan is the renewable energy portfolio standard (RPS). In2004 the Public Service Commission (Commission) implemented regulations
An earlier version of this article was originally published in volume 33, number 2 of The New YorkEnvironmental Lawyer (Fall/Winter 2013), a publication of the Environmental Law Section of theNew York State Bar Association.Edward Hyde Clarke is a student at Albany Law School, an executive editor on the Albany LawReview, and a member of the Student Editorial Board for The New York Environmental Lawyer. He isthe first-place winner of the NYSBA (New York State Bar Association) Environmental Law Section’s2013 Prof. William R. Ginsberg Memorial Essay Contest for this article.Address correspondence to Edward Hyde Clarke, Albany Law School, 80 New Scotland Avenue,Albany, NY 12208. E-mail: [email protected]
1 N.Y. Energy Law § 6–102 (McKinney 2013). The board consists of New York Department of State,New York Empire State Development Corporation, New York State Energy Research and Devel-opment Authority, New York State Department of Public Service, New York State Department ofEnvironmental Conservation, New York State Department of Health, New York State Department ofLabor, New York State Department of Transportation, New York State Division of Homeland Securityand Emergency Services, Department of Agriculture and Markets, Appointments by the Governor,Assembly, and Senate, New York Independent System Operator (nonvoting). 2013 Energy PlanningBoard, N.Y. State Energy Plan, http://www.nysenergyplan.com/board.html
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to create the RPS.2 In order for an energy source to qualify for the RPS, it musthave an attribute that “include[s] any and all reductions in harmful pollutantsand emissions, such as carbon dioxide and oxides of sulfur and nitrogen.”3
The main goal is to not only increase renewable energy in New York State,but to avoid negatively impacting the state’s ability to be competitive in themarketplace.4 The initial goal of the RPS was to increase “the amount ofrenewable electricity used by consumers to 25% by 2013.”5 Since the initialregulations were adopted, the goal has been increased to 30 percent by 2015.6
In order to make recommendations moving forward, the Board must conduct“[a]n assessment of current energy policies and programs.”7
Governor Andrew M. Cuomo has shown a great commitment fromhis administration to increase renewable energy in New York State and toencourage in-state generation to reach the RPS goal. The governor signed thePower Act of 2011 into law, which has led to three promising initiatives inthe state: the reauthorization and change to article X of the Public ServiceLaw, the New York-Sun initiative, and the New York Energy Highway, eachof which will be described in detail below. Although it is believed theseinitiatives will ultimately increase renewable energy consumption in the state,several studies reveal that the administration will likely come up short ofreaching the 2015 goal. The latest report issued by the New York State EnergyResearch and Development Authority (NYSERDA), the executive agencycharged with responsibility for both tracking the progress of and supportingthe RPS, projects that New York is on target to meet its goal for small-scalegeneration projects.8 These are often relatively low in overall production andare installed by the individual consumer.9 However, the report makes no suchassurance for the main tier component of the program which accounts for themajor utility scale resources, or the projects that generate the most power.10 Asof 2012, the main tier component had 1,456 megawatts (MW)11 in operation
2 N.Y. State Energy Research and Development Authority, The New York State Renewable Port-folio Standard Performance Report 3 (2012) (Performance Report), http://www.nyserda.ny.gov/Publications/Program-Planning-Status-and-Evaluation-Reports/Renewable-Portfolio-Standard-Reports.aspx
3 Id., 5.4 Id.5 Id., 3.6 Id.7 Id.8 Id., 4. The small scale generation projects are known as the customer-sited tier (CST) projects.
These projects include photovoltaic (PV), fuel cell, and anaerobic digesters. See New York RenewablePortfolio Standard, NYSERDA, http://www.nyserda.ny.gov/Program-Planning/Renewable-Portfolio-Standard.aspx#customer
9 New York Renewable Portfolio Standard, supra note 1.10 Id.11 Robin J. Lunt, “Recharging U.S. Energy Policy: Advocating for a National Renewable Portfolio
Standard,” UCLA Journal of Environmental Law & Policy 25 (2006–2007), 371, 387 n. 60 (explaining
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and another 384 MW being developed or under construction.12 The main tierhad reached 48 percent of its goal, meaning that the state must add close to1,577 MW by 2015 in order to reach its goal.13
In spite of the fact that New York will likely not reach the goal by2015, success and the continuance of this program are crucial to both energysecurity and economic recovery in New York. Governor Cuomo has publiclyrecognized the jobs and tax relief that can be generated from increasing cleanenergy on the grid. This article demonstrates that the board must considerpolicy recommendations that will help New York realize its clean energygoals, including out-of-state generation.
NYSERDA recently submitted a petition for modification of the RPSmain tier program to the board, lobbying that eligibility of main tier projectsshould be limited to in-state projects only.14 It is NYSERDA’s position thatlimiting eligibility to New York projects will lead to (1) environmental im-provement; (2) energy security; and (3) economic benefits to New York.15
However, shown in this article, limiting projects to in-state generation will bedetrimental to New York’s overall clean energy goals.16 New York should bewelcoming out-of-state projects, like the Champlain Hudson Power Express(CHPE)17 New York is having the most difficulty in obtaining the main tiercomponent of the RPS program. The CHPE is a 1,000 MW project, of which94 percent of the generated power comes from hydro and wind. This energyproduction represents over 66 percent of what is needed to reach the RPSgoal.
The State Energy Planning Board should adopt a state energy plan thatexpands the scope of projects that qualify for the RPS goal and extend the2015 deadline to 2017. By extending the date, it will allow for any majorgeneration projects that have not been approved to contribute to the goal. TheCHPE project has the ability to meet all of the goals identified by NYSERDAand, because capacity is so close, will ensure the state’s clean energy goalis met upon completion. The extension will retain NYSERDA’s ability to
that “MW stands for megawatt, or one million watts. (One kilowatt = 1000 watts). Watts are themeasurement used to describe how much electricity could be produced at any given time, whereas theamount consumed over a period of time is described as a watt-hour”).
12 Id.13 Id., 3.14 Case 03-E-0188, Proceeding on Motion of the Commission Regarding a Retail Renewable Portfolio
Standard, NYSERDA Petition (Petition), December 14, 2012, 1, http://www3.dps.ny.gov/W/PSCWeb.nsf/All/1008ED2F934294AE85257687006F38BD?OpenDocument#psc
15 Id.16 See Case 03-E-0188, Proceeding on Motion of the Commission Regarding a Retail Renewable Portfolio
Standard, Consolidated Edison and Orange and Rockland Utilities Comments (Comments), Febru-ary 19, 2013, 2, http://www3.dps.ny.gov/W/PSCWeb.nsf/All/1008ED2F934294AE85257687006F38BD?OpenDocument#psc
17 See infra pages 119–124 analyzing the Champlain Hudson Power Express.
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fund incentives to companies for delivering clean energy to consumers andas a result, not overly delay obtaining a major policy goal.18 New York’sgreen energy infrastructure is at a crossroads. At a time when the RPS goalis not being met, the state should not be limiting resources, but rather ex-panding program criteria and extending deadlines to ensure the program’ssuccess.
WHERE IS NEW YORK NOW? BACKGROUND AND INITIATIVESTAKEN BY GOVERNOR CUOMO
New York first publicly recognized the problems associated with dependenceon foreign fuel and the impacts that it can have on the environment in its2002 State Energy Plan.19 Through the end of 2011, NYSERDA reportedthat 47 percent of the goal for 2015 had been met. It is projected that if the30 percent goal is met by 2015 that New York will gain approximately $6billion in economic benefits.20 Although these benefits are just estimates, thisis a significant incentive at a time when state government faces a number ofdeficits and is forced to cut spending from a number of programs.
During his term, Governor Cuomo has taken a number of steps to in-crease renewable energy in New York State in his effort to ensure that NewYork meets its RPS standards by 2015. The governor recognized that the “[k]eyto powering our economic growth is expanding our energy infrastructure.”21
Most notably, the governor has signed the Power New York Act of 2011.The Power New York Act of 2011 (A08510, same as S 5844), sponsored
by Kevin Cahill in the assembly and George Maziarz in the senate, was signedinto law by Governor Cuomo on August 4, 2011. The purpose of the bill is to:
Establish an on-bill recovery mechanism for the “Green Jobs/Green New York”program which was added by chapter 487 of the laws of 2009, reauthorize andmodernize Article X of the Public Service Law, regarding siting of major electricgenerating facilities in a manner that enhances public participation and augmentsenvironmental justice, and require a study with respect to increasing generation fromphotovoltaic devices in New York.22
There are three results from signing this bill: the reauthorization and changeto Article X, the New York-Sun initiative, and the New York Energy Highway.
18 Currently “funded through quarterly payments made to NYSERDA by Central Hudson, Con Edison,NYS Electric and Gas, National Grid, Orange and Rockland, and Rochester Gas and Electric.”
19 Performance Report, supra note 2, 4.20 Id., 20.21 N.Y. Energy Highway Task Force, New York Energy Highway Blueprint (2012), 3, http://www.
nyenergyhighway.com/Content/pdf/Blueprint FINAL.pdf22 Bill summary, http://assembly.state.ny.us/leg/?bn=A08510&term=2011
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All three of these initiatives have been major steps towards helping New Yorkincrease renewable energy in the state and are part of the policy assessmentperformed by the board in crafting New York’s Energy Plan.
REAUTHORIZATION OF ARTICLE X
The original provision of article X, which expired in 2003, provided for amultiagency planning board for siting power generators sized 80 megawatts(MW) or larger.23 Facilities that were not covered by the law had to dealwith the numerous levels of local and state government.24 As explained in thePower New York Act, the new article X includes facilities that generate 25megawatts, which encompass more than power plants in its regulatory reach. 25
In addition, the new article X gives power to the New York Department ofEnvironmental Conservation to focus on reducing carbon dioxide producedby the facility.
The big change is that article X now includes wind projects. Many windprojects that may have been held up by local laws can now be streamlinedinto the “one stop shopping” process that was once only available for powerplants. Wind is a major component of the main tier part of the RPS standard.Wind developers will still have to conduct a site evaluation and ensure thatthere is a certain amount of wind power generated before they will investtheir money and capital in to the project.26 The benefit of article X is now thecompany will have the ability to go to just one planning board, simplifyingthe process and hopefully encouraging more companies to go through thenecessary administrative process.
In assessing the impact this will have on the overall goals of renew-able energy development in the state, the board must understand that NewYork is not close to reaching its potential of 5,000 MW of land-based windgeneration. Further, it is not clear to what extent any new wind projectswould be developed in time to benefit the state in reaching the RPS goal.27
The main issue is the amount of power that the projects are able to pro-duce. NYSERDA claims that its programs have been instrumental in securingwind farms totaling an amount of 41.5 MW of power.28 This is a relativelylow fraction considering the state’s actual capacity. New York lags behind
23 Id. (referring to the bill memo).24 Id.25 Id.26 Large Wind Farm Developments, NYSERDA, http://www.nyserda.ny.gov/Renewables/Large-
Wind.aspx?sc database=web27 Large Wind Farm Developments, NYSERDA (2013), http://www.nyserda.ny.gov/Renewables/Large-
Wind.aspx (NYSERDA is currently working with developers that would account for 425 MW ofpower, from four different projects).
28 Id. (large wind farm developments).
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when it comes to wind generation when compared to other states.29 Earlierthis year, the American Wind Energy Association released numbers on theamount of wind power that was added over the course of 2012.30 The U.S.wind industry added 13,000 MW in 2012, which is the most that has everbeen added in a single year.31 The concern for New York is that it is noteven in the top ten of wind producers in the country.32 Colorado ranks tenthin the country at 496 MW of wind generation capability.33 It is clear thatNew York has not harnessed the amount of new wind generation that is be-ing utilized in other parts of the country, and therefore it is unclear whetherthe reauthorization of article X is enough to help the state realize its RPSgoal.
The other issue that wind projects are facing is that one of the majorfederal tax subsidies for projects expired on January 1, 2013.34 Predictions arethat the loss of these subsidies will impact installations all over the countryand that overall projects will likely fall by 90 percent over the upcomingyear.35 It is thought that the expiration of the credit and the uncertainty thatsurrounds whether or not it will be extended and for how long it will beextended will bring the nation’s wind farm projects to a “virtual standstill.”36
Unfortunately, the expiration of the tax credit is nothing new for the industry.The uncertainty of the financial support limits developers who have to planand submit a number of documents for the lengthy environmental assessmentprocess.37
Therefore, although article X and streamlining the permitting of windprojects was a positive step taken by the administration, this article demon-strates that this will not be significant enough for New York to achieve theRPS goal.
THE NEW YORK-SUN INITIATIVE
We will continue to establish New York’s technology leadership in this importantemerging market while balancing investments in other renewable resources and
29 American Wind Energy Association, “Wind energy top source for new generation in 2012;American wind power installed new record of 13,124 MW,” press release, January 20, 2013),http://www.awea.org/newsroom/pressreleases/officialyearendnumbersreleased.cfm
30 Id.31 Id.32 Id.33 Id.34 Matthew L. Wald, “Developers of Wind Farms Run a Race Against the Calendar,” New York Times
December 28, 2012, B1, http://www.nytimes.com/2012/12/28/science/earth/wind-farm-developers-race-against-end-of-tax-credit.html? r=0
35 Id.36 Id.37 Id.
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protecting the taxpayer. This approach will create jobs, expand solar power andprotect ratepayers—a win, win, win.38
The New York-Sun initiative involves contributions from at least threedifferent bodies: NYSERDA, Long Island Power Authority (LIPA), and NewYork Power Authority (NYPA), in order to increase the amount of solar energyavailable on the market.
NYSERDA conducted a solar study to analyze the benefits and cost ofincreasing photovoltaic (PV)39 devices in New York.40 The study estimated thecost of achieving a 5,000 MW goal at $1.4 to $4.3 million per MW produced,depending on the status of the federal tax credit program and whether or notthe program is able to continue at the current rate.41 According to the basecase scenario, the cost exceeds the benefits in reaching a goal of 5,000 MW.42
The study did find that there will be benefits in the job market and for theenvironment.43 Through 2025 an estimated 2,300 jobs would be created as adirect result from PV installation and maintenance.44 It is estimated that therewill be a 4 percent reduction in fossil fuel consumption, a drop in carbondioxide by 3 percent, and a notable reduction in nitrogen oxides, acid rain,and smog.45 Despite the challenges, NYSERDA advises, “New York Stateshould support continued investment in the steady and measured growth anddeployment of PV as part of a sound and balanced renewable energy policy.”It is unclear whether or not this advice will lead to the state reaching the goalof 5,000 MW or if the state will take a more cautious approach due to thesignificant costs. In light of this uncertainty, it is clear that the energy boardshould not rely on solar as a major component of reaching the goal.
NYSERDA is the executive branch’s most active arm in guiding thestate’s RPS program. NYSERDA has a program called the Solar PV ProgramFinancial Incentives.46 Applications are accepted from 2010 through 2015,
38 Andrew M. Cuomo, Governor, State of New York, State of the State Address, January 4, 2012,http://www.governor.ny.gov/stateofthestate2012
39 PV devices are “cell panels [that] absorb light. . .to generate electricity.” Emmanuel Kymakis, “TheImpact of Carbon Nanotubes on Solar Energy Conversion,” Nanotechnology Law & Business 3 (2006),405, 406.
40 N.Y. State Energy Research and Development Authority, New York Solar Study (2012), http://www.nyserda.ny.gov/Publications/Program-Planning-Status-and-Evaluation-Reports/∼/media/Files/Publications/Energy-Analysis/solar-study-full-report.ashx
41 Id. (discussed in the summary).42 Id.43 Id.44 Id.45 Id.46 N.Y. State Energy Research and Development Authority, Solar PV Program Financial In-
centives Program Opportunity Notice 1 (2012) (Solar PV Program Financial Incentives Pro-gram), http://www.nyserda.ny.gov/Funding-Opportunities/Current-Funding-Opportunities/∼/media/Files/FO/Current%20Funding%20Opportunities/PON%202112/2112summary.ashx
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and will actually provide cash incentives to “Eligible Installers of new grid-connected Solar Electric or Photovoltaic (PV) systems that are 7kW or lessfor residential, and 50 kW or less for commercial sites.”47 This funding isprovided through the money that is allotted to reach the RPS from NYSERDA.The incentives are only available to those electricity distribution customersof the companies who contribute to the financial support of RPS goal.48 Theresidential customers are expected to go through a home audit that will analyzetheir daily energy habits and an inspection to identify where improvementscan be made in terms of energy efficiency.49 The incentives are paid directlyto the company, who is then responsible for passing on the benefits to theconsumer.50
In addition to the efforts that are being made by NYSERDA, NYPAand LIPA have their own initiatives geared towards increasing the amount ofsolar power in New York. NYPA is in the process of creating a solar mar-ket acceleration program (Solar MAP).51 Solar MAP will work in conjunc-tion with NYSERDA to reduce the cost of implementing solar technologyin New York State.52 The program is geared towards technology research,demonstration projects, and soft-cost reduction strategies.53 Specific to LongIsland, LIPA has what is called the Solar Pioneer Program for Homeowners.54
Through the program, LIPA offers rebates to help with the initial cost ofimplementation.55 In the event that the new system produces more electricitythan the residential home requires, LIPA will give a credit back to the home-owner, which can be banked for a later date.56 Overall, the goal is to encouragehomeowners to install the PV panels, and thus gain credits towards the RPSgoal.
The New York-Sun initiative and other solar programs are encouragingin relation to increasing the use of solar technology. However, it is not clearif solar is the solution to reaching notable generation goals. Solar technologyis still considered to be in the early stages of development and progress, not
47 Id.48 Central Hudson, Con Edison, NYS Electric and Gas, National Grid, Orange and Rockland, and
Rochester Gas and Electric.49 Solar PV Program Financial Incentives Program, supra note 46, 2.50 Id., 3.51 Solar Market Acceleration Program, N.Y. Power Authority, http://www.nypa.gov/solar/solarmap.htm52 Id.53 Id. “‘Soft costs’ are an often poorly defined amalgamation of costs associated with bringing a solar
system online. The term is usually defined as all non-hardware costs.” Mark Liffman, “Top Trends toWatch in 2013: Solar Soft Cost Reduction” (January 16, 2013), http://www.cleanpower.com/2013/soft-cost-reduction-trend/
54 “LIPA Solar Pioneer,” Long Island Power Authority, http://www.lipower.org/pdfs/company/pubs/brochures/solpioneer.pdf
55 Id.56 Id.
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NEW YORK’S RENEWABLE ENERGY PORTFOLIO STANDARD 115
necessarily the solution to achieve clean energy goals in the near future.57 Theinvestment that Governor Cuomo has outlined will be critical to increasingsolar panels in New York, but it may not be the most economical or beneficialenergy source to rely on achieving the RPS goal.
NEW YORK ENERGY HIGHWAY
The Energy Highway Task Force presents. . .immediate actions and policy recom-mendations to modernize the power generation and transmission systems to achievevital safety, reliability, affordability, and sustainability goals on behalf of all New
Yorkers.58
Governor Cuomo held a summit in April 2012 in which numerous partiessubmitted proposals on how to improve the state’s energy grid.59 While theEnergy Highway Task Force has a number of goals, most notably the initiativeaims to increase renewable energy in-state.60 Specifically the plan identifiesupstate New York for the potential siting of projects. Governor Cuomo hasindicated that: “Modernizing our generation assets promotes environmentaland efficiency goals and preparing well in advance for the potential closureof power plants is critical to safeguarding system reliability and protectingconsumers.”61
The blueprint proposal derived from that summit was finalized in Octo-ber 2012. The blueprint calls to “execute new contracts for up to $250 millionwithin the next year with renewable energy developers under the RenewablePortfolio Standard (RPS) to leverage an additional $425 million in private-sector investment to build up to 270 MW; continue to invest annually withfuture contract solicitations in new large-scale renewable energy projects.”62
The RPS goal should benefit from any continued investment in energy sourcesthat qualify for the program. While there is no indication that NYSERDA isclose to running out of funds to support the project, a commitment from thestate to invest will certainly help ensure its success.
The blueprint also calls for the permitting process to be expedited.This involves collaboration between energy, environmental, and economic
57 Rustin P. Diehl, “Transitioning to a Clean Renewable Energy Network in the West,” Journal of Land,Resources & Environmental Law 27 (2007), 345, 347.
58 N.Y. Energy Highway Task Force, New York Energy Highway Blueprint (2012), 10,http://www.nyenergyhighway.com/Content/pdf/Blueprint FINAL.pdf
59 NYSERDA, “Governor Cuomo’s energy highway task force holds summit,” press release, April4, 2012, http://www.nyserda.ny.gov/About/Newsroom/2012-Announcements/2012-04-04-Governor-Cuomo-Energy-Highway-Task-Force-Holds-Summit.aspx
60 Id.61 New York Energy Highway Blueprint, supra note 21, 10.62 Id., 16.
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development agencies. This part of the initiative, coupled with article X,is an effort to streamline the process and ensure that the projects are infact implemented. New York must encourage companies and investors thatdevelopment is possible in New York and that it will not take years to startproduction.
Finally, the blueprint identifies offshore wind as a great opportunityand calls for an extensive study to be conducted.63 Offshore wind projectshave been the center of controversy in a number of coastal communitiesand bring a range of similar challenges with siting.64 It is unclear whetheror not offshore wind will ever be successful, given the challenges that cur-rent wind projects such as the Long Island New York City Wind collab-orative currently face:65 a project that has been met by fierce oppositionfrom landowners who argue that their view and aesthetics will be ruined.“When considering wind power in the abstract, the public generally sup-ports generating power from wind energy. However, individual proposals forgenerating power using offshore wind may face aesthetic and environmentalobjections.”66
The blueprint calls for New York to provide certainty for develop-ment in renewable energy beyond 2015.67 This type of commitment looksbeyond just the RPS goal, toward the continued building of New York’srenewable energy efforts in the future. The blueprint has tasked this assign-ment to NYSERDA and the Department of Public Service (DPS). This ini-tiative aims to encourage renewable energy generation, while at the sametime building on projects already in place, such as the New York-Suninitiative.68
The New York Energy Highway discusses the potential of increasinginvestments in renewable technology to ensure that New York meets its targetdeadline for the RPS.69 However, the report discusses adding only 270 MWof renewable energy.70 The state is still over 1,500 MW away from reachingits RPS goal, so while this investment is important it will not be sufficient inmeeting the 2015 deadline.
63 Id., 24.64 “Report of the Renewable Energy Committee,” Energy Law Journal 32 (2011), 405.65 N.Y. Power Authority, “LI-NYC wind farm collaborative applies for federal lease for offshore site, sup-
ports Gov. Cuomo’s clean energy plans: project studies advance new jobs, renewable energy, & greenerenvironment,” press release, September 15, 2011, http://www.nypa.gov/Press/2011/110915a.html
66 Jeremy Firestone et al., “Regulating Offshore Wind Power and Aquaculture: Messages from Land andSea,” Cornell Journal of Law & Public Policy 14 (2004), 71, 76.
67 New York Energy Highway Blueprint, supra note 21, 24.68 Id., 61.69 N.Y. Energy Highway Task Force, New York Energy Highway Blueprint Update 11 (2013),
http://www.nyenergyhighway.com/PDFs/BP2013/EHBPuploadpt2013/70 Id., 42.
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NEW YORK’S RENEWABLE ENERGY PORTFOLIO STANDARD 117
CUOMO ADMINISTRATION MOVING FORWARD
In Governor Cuomo’s first term in office he has taken a number of steps toensure that New York State is a leader in green technology. The governorunderstands that by increasing the use of green technology the state will notonly promote a cleaner environment, but the state can increase the numberof job opportunities and build a more reliable power grid. “Wind turbinesand solar panels together require thousands of components that can be de-signed, manufactured, distributed, sold, deployed, installed, and serviced bya workforce trained and educated” in the field.”71
One of the main challenges that renewable technology faces in NewYork is the fact that investments are not maximizing on their return. “Cur-rently, various New York State entities collect and spend $1.4 billion peryear on renewables and energy efficiency. Approximately 80 percent of thisfunding—or $1.15 billion—comes in the form of one-time subsidies. In spiteof this level of spending, the state is far from realizing its clean energy goals.”72
In order to address the current projection that the state will not meet its cleanenergy goals, the governor laid out potential solutions in his 2013 State of theState address this January.
The first proposal by the governor was the creation of the energyczar post in his administration. The governor appointed Richard Kauffmanto be the chairman for energy policy and finance for New York State.73
The extent of Kauffman’s power in the new position or how the energysubcabinet will work with the other state agencies charged with the im-plementation of renewable energy projects has yet to be realized. How-ever, the governor noted that Kauffman is known for being “one of thecountry’s leading experts in private sector investment in clean energy.”74
The establishment of this position underscores that to succeed, it is criti-cal to spur private investment and persuade companies to expand in NewYork.
One of Kauffman’s first jobs in his new position will be implement-ing the New York green bank, which was also proposed in the governor’saddress.75 Governor Cuomo proposes to create a $1 billion New York greenbank to leverage public dollars with a private-sector match to spur the clean
71 Stanley “Skip” Pruss, “The Case for Clean Energy Technology Manufacturing: Ten Steps Business andIndustry Must Take to Optimize Opportunities in the Emerging Clean Energy Economy,” MichiganTelecommunications and Technology Law Review 18 (2011), 349, 354.
72 Governor Andrew M. Cuomo, “N.Y. Rising: 2013 State of the State,” (2013), 27,http://www.governor.ny.gov/sites/default/themes/governor/sos2013/2013SOSBook.pdf
73 Id., 36 (In accepting the position, Kauffman is leaving his current post as a senior advisor to StevenChu, the Secretary of Energy. “Mr. Kauffman was Chief Executive Officer of Good Energies, Inc., aleading investor in renewable energy and energy efficiency technologies”).
74 Id.75 Id., 27.
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economy.76 A green bank would allow “the government [to] provide financialsupport for energy projects in an attempt to increase the flow of privatecapital into the sector.”77 While a green bank has the potential to lever-age spending and spur development, it does require taxpayer assistance tofund the program. In deciding whether a green bank would advance thegoals of the RPS, the use of taxpayer funds would have to be reconciledwith the original goal of the RPS when it was established in 2004. Theoriginal goal was for the “creation of renewable industries that are self-supportive based on market demand and market forces instead of relyingprimarily upon ratepayer and taxpayer assistance to survive.”78 Therefore,can the green bank be considered part of the solution in reaching the RPSgoal?
NYSERDA’S THREE GOALS
In the petition submitted to the State Energy Planning Board, NYSERDAidentified three main goals that it believes will be achieved by limiting maintier facilities to in-state production.79 Not only can all three of these goalsbe met by projects that are generated out-of-state,80 but more importantlyNew York will likely fail to reach the RPS goal for a number of years ifthis policy is adopted. New York can support and incentivize and leveragein-state projects,81 but to place an all-out ban on out-of-state projects for theRPS standard would be detrimental to the overall goal of increasing cleanenergy consumption in New York.82 “Barring out-of-state resources fromparticipation in the RPS Program will affect a number of factors. .. includ[ing]:the cost of resources, the availability of renewable energy resources, and theamount of time required to develop sufficient” projects.83 Limiting the amountof projects that qualify has a direct impact on the market and availability ofresources.
76 Id., 27.77 Allison S. Clements and Douglass D. Sims, “A Clean Energy Deployment Administration: The Right
Policy for Emerging Renewable Technologies,” Energy Law Journal 31 (2010), 397, 399.78 New York Incentives/Policies for Renewables and Efficiency, Database of State Incentives
for Renewables and Efficiency (May 11, 2012), http://www.dsireusa.org/incentives/incentive.cfm?Incentive Code=NY03R
79 See supra notes 14–16 ((1) environmental improvement; (2) energy security; and (3) economic benefitsto New York.).
80 Comments, supra note 16, 8.81 Id., 9.82 Id., 8.83 Id.
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CHAMPLAIN HUDSON POWER EXPRESS
One such out-of-state project that could positively impact New York’s RPSgoal for 2015 is the Champlain Hudson Power Express. Not only is this projectwell on its way to being approved for the necessary regulatory permits; it issupported by a number of groups and agencies in New York.84 Banning out-of-state generated projects from qualifying for the RPS when New York ison the verge of acquiring such a project would be counter to the state’s cleanenergy policy goals.
Designed to deliver hydroelectricity and wind power from Canada intoNew York City, the $2.2 billion line would originate underwater at the bor-der between the United States and Canada near Champlain, New York, andcontinue south under Lake Champlain for 101 miles before traversing pre-dominantly rights- of-way along land before continuing under the HudsonRiver into Astoria.85
The CHPE involves “a 1,000-megawatt (MW) high-voltage direct cur-rent (HVDC) Voltage Source Converter (VSC) controllable transmission sys-tem from the Canadian Province of Quebec to the New York City.”86 Whilethere is a full route that has been laid out and detailed, ultimately the plan willbe subject to final approvals and an agreement from all the stakeholders thatare involved.87
The CHPE has faced a number of challenges and regulatory steps inorder to be in compliance and gain the approval of the commission. In partic-ular, the commission identified alternative routes that had to be considered.88
As with other large projects, there were procedural meetings with administra-tive law judges and a number of public statement hearings and informationalhearings.89 As of February 2012 the signatory parties were confident “theirvarious positions can be addressed through settlement and agree that settle-ment is now feasible.”90
As of April 2013 the state “Public Service Commission unanimously ap-proved” the CHPE project, leaving only permits from the federal governmentand local opposition to surmount.91
84 See infra pages 120–121 Support for the Project.85 “Planned Quebec-New York Merchant Line Taking More Heat,” Electric Power Daily January 22,
2013.86 http://chpexpresseis.org/about.php87 Id. (the proposal is for the route to go a total of 336 miles. This includes being buried in Lake
Champlain, using the right-of-way along route 22, railroad owned by the Canadian Pacific Railway,down the Hudson River, and a combination of other right-of-ways).
88 Id., 3 (working with the various agencies involved in order to fall within the requirements).89 Id., 4 (the meetings were held in Yonkers, Kingston, Schenectady, Whitehall, and Plattsburgh).90 Id., 5.91 Kristopher Settle, “Clean Energy for NYC? $2.2 Billion Electric Pipeline Gets State Approval,”
The Energy Collective, http://theenergycollective.com/ecskris/214976/22-billion-electric-pipeline-
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SUPPORT FOR THE PROJECT
One of the main reasons that the out-of-state limit should not be adoptedis that it would have an immediate impact on a project that already has alot of support. A number of environmental advocate groups and governmentagencies have signed on board with the CHPE.92 Support came after anagreement to modify the route of the line, in addition to the developer creatingan environmental fund of $117 million for any potential harm that couldarise.93
Consolidate Edison (Con Edison) decided to support the project afterreaching an agreement with Transmission Developers Inc. (TDI)94 to ensurethat Con Edison ratepayers would not have to pay for any new developmentsin the equipment or facilities that will be required for the project. In addition,TDI also agreed to change the line to avoid a Con Edison LNG plant, whichwas a concern during the planning process.95 These efforts demonstrate thewillingness of the developer to work with the groups in-state to come up witha solution that is beneficial for everyone. By creating an environmental fund,TDI is ensuring that one of NYSERDA’s goals of an in-state limit will not beviolated; any environmental improvement required is well supported by the$117 million reserved for this project.
In February 2012 the CHPE submitted a joint proposal for the project,along with a number of agencies representing the public interest in theproject.96 The proposal identifies the need for the project: citing that itwill lower the wholesale price for electric power and lower carbon diox-ide and other harmful emissions,97 thus achieving both environmental im-provements and economic benefits.98 Furthermore, the increase of 1,000 MWof new energy being delivered to the city would lead to an “enhancementin system reliability.”99 This highlights that the project will not only be an
gets-new-york-state-approval (“Regulators said a big factor in their approval stemmed from howthe project will be entirely funded privately. . .[with] no charges added for customers to complete theproject.”).
92 Id.93 Id.94 Transmission Developers Inc. is the company working on developing the Champlain Hudson Power
Express.95 Id.96 Case No. 10-T-0139, Champlain Hudson Power Express, Inc., Joint Proposal 1 (Febru-
ary 24, 2012) (The other New York State agencies included in the joint proposal wasthe Department of Public Service, Department of Environmental Conservation, Departmentof State, Department of Transportation, Adirondack Park Agency, Department of Agricultureand Markets, Riverkeeper, Scenic Hudson, City of Yonkers, Trout Unlimited, City of NewYork, Office of Parks, Recreation and Historic Preservation, Palisades Interstate Commission),http://chpexpresseis.org/docs/CHPE Article VII Joint Proposal.pdf
97 Id., 13.98 See discussion on NYSERDA’s three goals.99 Joint Proposal, supra note 96, 14.
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improvement to the environment, but system reliability is another example ofenergy security and ensuring delivery.
The joint proposal also has an extensive section that is devoted to ana-lyzing the environmental impact of the project.100 Since environmental impactis a main concern for NYSERDA, the impact must be a major determiningfactor in the approval process. In burying the line, the proponents assert thatthere would be “[n]o permanent or significant impacts related to geology orsoils.”101 Further, they contend that any disturbance of sediments and overallwater quality would be minimal and well within the agreed parameters.102 Theproject also took into account any possible impacts on fish, vegetation, andother aquatic life, and it was decided that any impact would be minimal andthat if any rare species were identified during construction that steps wouldbe taken to minimize or avoid any potential impact.103 The proposal reassuresthat any land use will be “with minimal potential impact to the general publicor private property, open space, or any existing or planned land uses.”104
In addition to wildlife and vegetation concerns, the report outlines thatthere will be no disruption in any of the transportation structure during con-struction and once the line is in place,105 ensuring that there will be no negativeimpact on the economic activity of the state. Noise, which is often a concernfor parties interested in a development project, is estimated to be insignificantand is likely to occur only during the installation process.106 The joint proposalalso sets out to establish a trust that will be dedicated to mitigating efforts andwater studies to ensure that the project does not lead to significant deteriora-tion, and will be overseen by a number of the signatories.107 According to theproponents, this project is estimated to have very little negative environmentalimpact, which lends itself to be supported by the signatories.
OPPOSITION
One of the loudest voices of opposition is from Entergy, which is the companythat oversees Indian Point.108 Indian Point will be impacted if this project doesin fact get installed, as Indian Point and the CHPE will be in competition to
100 Id., 15.101 Id., 16.102 Id., 20–21.103 Id, 23–30.104 Id., 31.105 Id., 37–39.106 Id., 39.107 Id., 61–62.108 Indian Point is a nuclear facility located in Westchester County. Victor Gilinsky, “Indian Point: The
Next Fukushima?,” New York Times December 17, 2011, A25, http://www.nytimes.com/2011/12/17/opinion/is-indian-point-the-next-fukushima.html
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provide power to New York City.109 The facility is currently going througha review process over whether or not its expiring reactor permits will berenewed. One license is expiring this year and the second license is expiringin 2015.110 Supporters of Indian Point rely on the fact that it is relativelycheap for the facility to generate power,111 Whether or not Indian Point isin operation, this project will certainly not be enough to replace the nuclearpower facility on its own.112
There is also opposition from energy generators, who are making the ar-gument that the project is too expensive and relies too heavily on subsidies.113
Not only do opponents highlight their financial concerns of the project, butalso opponents note that this project does not solve the current problems ofcongestion and updating the power grid. As stated above, the project is apoint-to-point line, and there will be no break or station to allow upstate NewYork to receive any of the energy passing through the area. Therefore, oppo-nents are focusing the energy issue from the state’s point of view, criticizingthe funding and overall limitation of the benefit to New York City.
ACHIEVING NEW YORK’S RENEWABLE ENERGY GOALSWITH THE CHPE
Due to the highly controllable nature of the HVDC Transmission System. . .a numberof benefits [] can be expected to increase overall system reliability. These benefitsinclude fast voltage control, and the ability to energize at a lower voltage level whenrequired. In addition, the output of the HVDC Transmission System is controllableso that system operators can match load and generation, at morning pick up, duringsystem emergencies, normal operation, etc.114
As stated above, the CHPE will not only be secure, but there will be ahigh level of control to match demand. One concern about energy securityis the level of reliability that can be placed on renewable energy. The maincritique about wind power is its inconsistency.115 Since wind is not generatedat a consistent rate throughout the day, the concern is that it is unable to keep upwith peak energy demands during periods of calmness.116 These concerns canbe addressed with other renewable energy power generation by “developing
109 http://www.bizjournals.com/newyork/news/2013/02/04/indian-point-closure-cost-could-near.html110 Id.111 http://green.blogs.nytimes.com/2012/09/07/life-without-indian-point-redux/112 The CHPE “represents a sizeable 10% increase in electric capacity for the New York City Region.”
Settle, supra note 91.113 “Planned Quebec-New York Merchant Line Taking More Heat,” Electric Power Daily January 22,
2013.114 Joint Proposal, supra note 96, 63.115 Diehl, supra note 57, 351.116 Id.
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a multi-source energy matching up wind generation capacity to equal theexisting hydroelectric capacity.”117 The idea is that the dams fill up whilewind is most powerful and then the dams are released when wind is no longerable to meet peak energy needs.118 The CHPE is a unique project becauseit involves both wind and hydro, as suggested as a solution for encouragingrenewable energy projects.
As of 2012 New York was still over 1,500 MW of renewable energygeneration away from meeting its goal by 2015.119 Not only did NYSERDAshy away from claiming that it would make the goal by the current terminaldate,120 but if growth is similar to what the reports outline from 2010 to 2012,this component of the project will not even be close to reaching its currentgoal.121
In 2009 the public service commission changed the RPS goal from 25percent by 2013, to 30 percent by 2015.122 In order to continue to striveto increase renewable energy in New York, the state energy board shouldconsider once again revising the terminal date and the goal of the project.The current rate of new generation for main tier projects in New York is justnot sufficient to make the deadline of 2015. However, the RPS goal shouldnot be abandoned just because the projection is that it will miss the deadline.It would not be the first time that the date was changed and it would alsoallow for more time for Governor Cuomo’s energy policies to take effect. It isimportant to allow for this governor’s energy policies to develop because thisis the fourth administration since the goal was first established. Changing theterminal date would also be in line with the governor’s overall goal of lookingbeyond 2015 in updating the grid and increasing renewables in New York.Increasing green and renewable energy is not just a one-time goal, but rathera commitment to change the way we do energy business in New York.
As long as out-of-state projects still qualify, by changing the terminaldate of the project to 2017 the state will have the opportunity to take advantageof and solicit other major projects that would qualify as main tier, suchas the CHPE. Governor Cuomo has announced very favorable projects andinvestments that will take place in New York, but it is critical that CHPEalso get the political support and media attention that it needs in order to be amajor part of the solution. The CHPE is a 1,000 MW project and it is projected
117 Id., 351.118 Id.119 See infra pages 108–109.120 Id.121 Compare report from 2010 to the report in 2012 (from 2010 to 2012, the percentage of
the goal that had been reached in 2010 was 43.7 percent and was only up to 47 percentin 2012), http://www.nyserda.ny.gov/Publications/Program-Planning-Status-and-Evaluation-Reports/Renewable-Portfolio-Standard-Reports.aspx
122 New York State Renewable Portfolio Standard Performance Report, NYSERDA, 2010, 4–5.
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that 94 percent of its power generation will come from either hydro or wind,thus meeting the standards for New York’s energy portfolio.123 A 1,000 MWproject represents 66 percent of what New York still needs to achieve and 33percent of the total generation goal. If the project does not get delayed in anymore of the review process, it could be completed by 2017, just in time fora revised termination date for the RPS goal. The amount of support that thisproject received in its joint proposal and the fact that it will largely fall withinNew York’s RPS, lends itself to changing the termination to incorporate thisproject.
It is crucial that the state succeed in this policy goal because it will bedifficult to justify the state continuing to invest in clean energy projects if thestate never reaches any goal that it sets, while at the same time having to cutfunding to important public programs. The CHPE must do its own part totake the project to the public and promote the benefits of clean and renewableenergy. There must be a total effort to bring together the community, thepolitical leaders, and the clean energy companies.124 “By redefining policy andpolitical agendas, the clean energy industry can optimize its opportunities inthe emerging twenty-first century clean energy economy.”125 Just as educationand communication is important, political leaders must be lobbied to ensurethe necessary financial support.126
Because the facilities for producing and then transporting renewable energy to thepower grid are very capital intensive, it is essential that state governments implementeconomic incentives which will help to level the playing fields with traditionalenergies until renewable energies technologies and infrastructures become profitableenough to independently attract investors.127
CONCLUSION
The fact that the project relies heavily on subsidies should not discount thebenefits that this project will have on the market and the environment. “Oil,gas, and coal industries are heavily subsidized today. . .[and] include bothdirect subsidies in the form of tax abatements and investment incentives,but also indirect subsidies that include environmental impairments, healtheffects, and climate consequences.”128 It is time that clean energy projects,such as the CHPE, are placed on a level playing field in terms of the amountof subsidies that the industry receives and the security of knowing that the
123 Joint Proposal, supra note 96, 54.124 Pruss, supra note 71, 363.125 Id., 365.126 Diehl, supra note 57, 363.127 Id., 365.128 Pruss, supra note 71, 362.
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subsidies will continue in the future.129 Some may view increasing renewableenergy as an expensive operation, however it must be viewed as an investment.An investment in jobs, an investment in energy security, an investment inenergy efficiency, and an investment in not only the state of New York, but aninvestment in the nation as a whole.
The governor has made significant progress towards increasing renew-able energy in New York; however, most of the solutions proposed have beenin-state driven. The key point about the RPS goal is that it is renewable energythat is consumed in New York. As opposed to what is being proposed by NY-SERDA, the state should not limit its solutions and consider only projects thatare generated in New York. In order to be serious about increasing renewableenergy that is consumed in the state, New York must support projects thatproduce clean energy out-of-state, as well as in-state, because competitionleads to a more cost-effective RPS program.130
Although it is disappointing that New York will likely not meet the 2015RPS deadline, changing the goal to 2017 is another policy decision that couldensure a bright future for renewable energy and green technology in NewYork. Coupled with Governor Cuomo’s proposal of a green bank, the CHPEwill be an important step in to ensuring energy independence from oil andcoal. We should be talking about energy security from foreign oil companies,not energy security from a direct line of wind- and hydro-generated power,from a country that is considered a close friend and ally.
129 Id.130 Comments, supra note 16, 10.
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