New York State Supercharges Clean Energy Development
With only 10 years to reach New York State’s nation-leading goal of 70 percent renewable electricity by 2030, the State took groundbreaking action to accelerate the identification, siting, construction and interconnection of renewable energy projects. In passing the Accelerated Renewable Energy Growth and Community Benefit Act (“Acceleration Act”), New York State hopes to cut through many of the roadblocks that have jeopardized the State’s ability to efficiently deploy clean energy assets. The Acceleration Act provides three major tools to achieve the State’s ambitious clean energy objectives:
- The creation of a new, dedicated Office of Renewable Energy Siting (ORES) with expansive powers and set deadlines for action;
- A State-sponsored program to identify, permit and deliver “build-ready” sites for project developers and operators; and
- An accelerated transmission investment program to identify, target and approve infrastructure upgrades that will facilitate and support the rapid deployment of renewable energy.
New York State currently obtains roughly 30 percent of its electricity from renewable sources, the vast majority of which is legacy hydroelectric power. Achieving the State’s clean energy objectives will require extraordinary coordination and effort, even under normal circumstances. The pathway becomes ever more daunting considering the uncertain economic state of affairs in the wake of COVID-19, the upcoming 2020-2021 retirement of two nuclear reactors at Indian Point which account for nearly 12 percent of the State’s carbon-free electricity, and the much-needed replacement of the State’s aging high-voltage transmission infrastructure – 80 percent of which is nearly 40+ years old. In that context, the enhancements provided by the Acceleration Act will play a critical role in driving the State toward its 70 percent renewables target, and eventually to 100 percent carbon-free electricity by 2040, as required under the 2019 Climate Leadership and Community Protection Act (CLCPA).
Office of Renewable Energy Siting
The Acceleration Act strives to create certainty and predictability to project developers by pivoting away from the current permitting process set forth under Article 10 of the Public Service Law, and consolidating environmental review and permitting of major renewable energy facilities into the newly created ORES within the New York Department of State.
To ensure predictable and efficient decision-making, within one year, the ORES will develop a set of uniform standards and conditions for siting, design, construction and operation of large renewable energy facilities. To the extent that a site-specific environmental impact is not addressed by the uniform standards, the ORES and the New York State Department of Environmental Conservation (NYSDEC) will draft site-specific permit terms, conditions and mitigation provisions. The Acceleration Act also makes available a threatened and endangered species mitigation fund to facilitate a net conservation benefit to endangered and threatened species potentially impacted by project development activities.
Under the Acceleration Act, the ORES would accept, evaluate and issue siting permits for all renewable energy projects larger than 25 MW, while allowing projects between 20 and 25 MW to opt into the new process, if so desired. Importantly, the Acceleration Act recognizes that many projects remain pending in the Article 10 process and provides several forms of relief for project developers depending on a project’s stage of review in that process:
- Projects which are pending before the Article 10 siting board, including those that have only submitted a pre-application public involvement program plan, may elect to opt into the ORES uniform siting standards upon written notice to the Secretary of the Public Service Commission (PSC), or may otherwise continue to proceed through the Article 10 process.
- Pending projects which opt into the ORES process will be afforded expedited treatment that accounts for issues previously addressed and resolved in an alternative permitting proceeding.
- To avoid unnecessary duplicity and burden on project developers, a completeness determination previously issued through the Article 10 process will be carried over to the ORES process, such that an opt-in application would be considered complete upon filing with the ORES.
- To the extent an application had been reviewed pursuant to Article 10, but a completeness determination had not been issued by the time an application was filed with the ORES, the ORES will determine within 60 days whether such application is complete.
- Before uniform standards are promulgated by the ORES, an application for a siting permit submitted to the ORES will be the same in content and form as the application for a certificate of environmental compatibility and public need required by Article 10 of the Public Service Law.
The Acceleration Act provides expedited timeframes for permitting proposed projects, including a 60-day shot clock for the ORES to make a completeness determination, and a 12-month deadline for the ORES to make a final decision on a siting permit. Projects that are proposed on existing or abandoned commercial sites, including brownfields, landfills, former industrial sites or otherwise underutilized sites are afforded an even further expedited schedule, whereby the ORES must make a final determination within six months from the date the application was deemed complete. Parties aggrieved by the issuance or denial of a permit may seek a unique form of expedited judicial review from the Appellate Division of the New York State Supreme Court in the county where the facility would be located, whereby the proceeding would take precedence over all other matters.
Prior to the creation of the ORES, developers faced a lengthy and cumbersome process to receive permitting approval. In the last decade, only six projects have been granted certificates of completion under the Article 10 process, each taking three to four years. Meanwhile, there are nearly 60 projects currently waiting in the Article 10 queue. The creation of a stand-alone permitting office with uniform standards and predictable timelines will significantly enhance developer confidence, ease financial burdens and accelerate the State’s ability to meet its CLCPA requirements.
The Acceleration Act also amends the Public Authorities Law to empower the New York State Energy Research and Development Authority (NYSERDA) to identify and develop “build-ready” sites throughout New York State, which would be auctioned to private developers for the purpose of constructing and operating clean energy projects. In furtherance of that objective, NYSERDA may:
- Identify and assess sites suitable for clean energy development, prioritizing previously developed sites such as brownfields, landfills, former commercial and industrial sites, or other underutilized locations;
- Negotiate and enter into agreements with site owners to secure property rights, access easements and other interests;
- Secure permits necessary to bring the site to “build-ready” status; and
- Transfer rights and interests in such “build-ready” sites to clean energy project developers through a competitive bidding process.
NYSERDA would also be empowered to establish “host community benefit programs” pursuant to which individual property owners or municipalities, within which projects are located, would receive incentives for hosting “build-ready” sites. The Acceleration Act also requires the PSC to establish a program under which owners of certain major renewable energy facilities would fund a host community benefit bill discount program, or other compensatory program, to further support host communities and individuals who reside therein.
Before launching the “build-ready” initiative, NYSERDA must submit a petition to the PSC describing the programs, mechanisms and incentives it plans to establish to foster the expedient siting and development of “build-ready” sites. As required by the Acceleration Act, the PSC must promptly issue an order within four months of NYSERDA’s proposal, responding to NYSERDA’s request and ensuring compliance with the Public Service Law. Stakeholders will likely have an opportunity to provide public comment and feedback on NYSERDA’s proposal and its alignment with PSC orders, rules and regulations.
Transmission Investment Program
As the State prepares for rapid deployment and interconnection of renewable energy, the Acceleration Act also addresses upgrades necessary to modernize the power grid. To that end, the Acceleration Act directs the New York State Department of Public Service (DPS) to undertake a comprehensive study to identify upgrades at the distribution, local transmission, and bulk transmission levels that would facilitate achievement of the State’s CLCPA targets (“Power Grid Study”). Based on the Power Grid Study, the DPS will file with the PSC an initial report of findings and recommendations by the end of 2020, after which the PSC will establish a capital plan for transmission and distribution upgrades in each utility service territory on a prioritized schedule. In parallel, a bulk transmission upgrade plan would be incorporated into the New York Independent System Operator’s (NYISO) transmission planning process. The Acceleration Act also allows the PSC to designate certain “priority transmission projects” which are necessary to achieve CLCPA targets, and grants New York Power Authority (NYPA) the authority to leverage its assets, rights-of-way, access to capital, and technical expertise to develop those priority projects on an expedited basis.
The Acceleration Act also requires the PSC to establish an expedited nine-month process to issue final decisions on applications for major utility transmission facilities (125 kV or more, extending for a distance of one mile or more, or 100-125kV, for a distance of 10 miles or more) that would be constructed within existing rights-of-way, and would not result in significant adverse environmental impacts considering current uses and conditions at the site.
With New York State’s CLCPA targets rapidly approaching, the State is entering a critical development phase if it hopes to achieve 70 percent renewable penetration by 2030. The Acceleration Act sets the State on a pathway towards unlocking investment and economic development in the clean energy sector by modernizing the legal and regulatory paradigm which has lagged behind rapidly evolving technical innovation and State policy objectives. Much like the CLCPA, the Acceleration Act sets forth a powerful framework, but the details of the proposed siting standards, “build-ready” program and transmission program are yet to come.
For further assistance, please contact a member of the Energy Practice Team or the Phillips Lytle attorney with whom you have a relationship.