Deadline Approaching for “Urgent Upgrades” to Electric Grid

Electric Vehicle Infrastructure Developers, Green Building Developers and Economic Development Entities Should Act Now

November 13, 2024 is an under-the-radar but important deadline in support of the New York State’s climate change efforts around electric economy transformation. The Climate Leadership and Community Protection Act (CLCPA), related goals and timeframes have led to a convergence of necessary upgrades to the electric distribution grid throughout New York State. These include electric vehicle (EV) infrastructure necessary to transform the transportation sector. Likewise, real estate developments of all types that are subject to (or otherwise adopting) building electrification requirements will need significant system upgrades. This will include electrification of housing and industrial loads related to economic development which are often large in scale. As the Public Service Commission (PSC) explained, “billions of dollars of distribution grid upgrades may be required by 2050 to enable EV deployment and building decarbonization in line with State policy.”¹  Without the necessary upgrades neither the State’s climate goals, nor an array of critical projects can succeed.

The Proactive Planning Process

Recognizing this convergence, the PSC recently commenced a new proceeding called the “Proactive Planning Proceeding” aimed at evaluating new energy loads from transportation and building electrification sectors. Ordinarily, utility infrastructure planning and development moves at a relatively slow pace, accounting for individual new load and requests for service and growth of existing user demands. However, the pace at which EV infrastructure and building electrification developments take place are set to significantly outpace the customary processes used by the PSC and utilities.  As a result, the PSC directed the State’s utilities to propose a proactive planning process that will identify utility grid infrastructure needs related to these electrification developments (among others) in a timely and uniform manner (the “Proactive Planning Process”). The PSC anticipates the Proactive Planning Process to begin by the utilities filing a proposal to study and identify upgrades necessary for electrification, with the initial phase (of an ongoing iterative process) slated to conclude by mid-2026.

The Urgent Upgrade Projects

Even at an accelerated pace, developing and completing the Proactive Planning Process will take more time than may be available in the case of many important projects. As a result, the PSC also created a separate expedited process for “Urgent Upgrade Projects” that require action sooner. Urgent Upgrade Projects are those electrification-driven upgrades that require short-term action before and outside of the Proactive Planning Process either because of load growth expectations or construction timelines. The PSC defined this category to include utility upgrades that must begin construction before mid-2026 when the initial Proactive Planning Process is anticipated to be completed.

Who Pays For Electrification-Driven System Upgrades?

Among other questions to be considered in the PSC’s process for Urgent Upgrade Projects and the Proactive Planning Process will be the question of who should pay for the significant cost burden of the added utility infrastructure necessary to support electrification efforts driven by and required to meet the State’s climate goals. Considerable thought and care needs to be taken to ensure that costs are allocated fairly, stranded costs are avoided and “free rides” are minimized.

What to Do

EV infrastructure developers, real estate developers and economic development entities pursuing projects that may qualify as Urgent Upgrade Projects should seek to have their Urgent Upgrade Projects included in forthcoming utility filings currently slated for November 13, 2024. Time is of the essence.