The National Grid Transmission Control Center for Upstate New York is seen in Liverpool. Utility companies want New York to allow them to develop wind and solar projects.
Will Waldron/Times Union
Work is done on wind turbines inside Building 273 at the General Electric campus in Schenectady.
Jim Franco/Times Union
The site of the potential battery energy storage system in Dresden is approximately a half mile from Lake Champlain. The proposal includes hints of a possible data center north of the site on state Route 22.
Eric Teed/Adirondack Explorer
Wind turbines like these in the town of Clinton are critical to meeting clean energy mandates but are also hard to develop affordably.
Will Waldron/Times Union
Part of a large solar array is seen along Route 32 in Westerlo.
Jim Franco/Times Union
ALBANY — New York regulators are considering letting monopolistic utility companies own large-scale power generation again, something they’ve largely been banned from doing in the state for nearly 30 years.
The issue is unfolding as private energy developers aren’t building enough wind and solar projects to meet New York’s rising power needs or bring the grid to 100% clean energy by 2040, as required by state law.
Article continues below this ad
The Public Service Commission, which regulates New York’s power, water and telecommunications industries, is considering a paradigm shift in the state’s electricity markets where independent builders and utility companies both work to ratchet up supply.
Currently, the developers are in charge of constructing and maintaining solar panels, wind turbines and gas turbines. The utility companies had that responsibility in the 1990s but were forced under the administration of former Gov. George E. Pataki to sell off their power plants in an effort to bolster competition in the energy industry.
Now, the utility companies are primarily responsible for building and operating grid infrastructure to distribute electricity where it’s needed.
Make the Times Union a Preferred Source on Google to see more of our journalism when you search.
Add Preferred Source
A group of utility companies, including National Grid and Consolidated Edison, are proposing to help the state meet its emissions’ goals by entering into contracts to produce up to 1 gigawatt of solar and wind a year — enough to power roughly 750,000 homes.
Article continues below this ad
It’s part of a national push with electric utility companies citing the nation’s rapidly growing energy demand to argue for the authority to build power generators. But, to this point, regulators and lawmakers have largely denied their efforts, said Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School.
New York may be different. The utility companies never wanted to give up owning generation assets and have consistently fought to get them back. They’ve been rebuffed until regulators reviewing the state’s progress in reaching clean energy targets began considering the possibility as a way to reliably build more renewable power sources.
Utilities, according to Peskoe, are interested in gaining a new foothold in the renewable energy sector to access “more profits, more revenue streams.”
The companies are largely banned from owning power generation in New York, but they can own facilities through subsidiaries without the same restrictions, Peskoe noted.
Article continues below this ad
National Grid already owns gas plants on Long Island under a separate corporate entity. Con Edison sold its renewable energy company in 2023 for $6.8 billion, while at the same time advocating to build wind and solar farms through their heavily regulated business.
The utility companies want “virtual guarantees” that they’ll make money, Peskoe said, which wouldn’t be the case if they used subsidiary corporations to own renewable energy in a competitive environment with other developers. Regulated utilities are authorized to earn about a 9% return on money they invest into infrastructure projects, though whether they are able to reach that profit level is dependent on many factors.
“We know the energy system, we can build things and we can operate them,” Con Edison CEO Tim Cawley said in an interview with Reuters. “We can help the state achieve its (renewable energy) goals. … We can do it in a way that’s beneficial for customers.”
The electric utilities’ proposal also outlines ways they say they can provide renewable energy more cheaply than private-sector developers. That notion was challenged in a study funded by Con Edison.
Article continues below this ad
“Utility ownership would likely shift most risks currently borne by private owners to electricity customers with respect to asset performance and cost overruns,” according to the 2024 study from Brattle, an energy consulting firm. The report found that large-scale solar facilities would be slightly more expensive under utility ownership but that wind could be cheaper if operated by utilities.
Con Edison “updated several assumptions” in the study earlier this year, resulting in projected costs for solar farms to be lower under utility ownership than competitive developers in the private market.
Utility companies contend their ability to raise money more easily than other builders can bring down the overall price consumers have to pay for renewable energy projects.
The initial Brattle study reported that utility companies do have lower financing costs but they weren’t much lower than private developers. Con Edison cited hostility under President Donald J. Trump’s administration as leading investors away from renewable energy markets as a reason to raise those estimates for independent wind and solar farm builders.
Article continues below this ad
The companies say renewable energy facilities they build can provide more long-term value to customers than if they were constructed by unregulated developers.
Currently, wind and solar farms enter into 20-year contracts with the state to operate. Once that period is up, they’re not beholden to sell power in New York anymore. They can sell into Massachusetts or Pennsylvania. Or they can keep distributing the electricity they produce in New York, but at potentially a much higher profit level because the debt on wind turbines or solar panels will be mostly paid off while still reaping the same amount of revenue.
If utilities own generation projects, as facilities become cheaper to operate over time, the savings will pass on to ratepayers instead of being held by a private developer.
“The risks are on (utility customers) in the interim,” Peskoe said. “(New Yorkers) get potential for speculative benefits in two decades; it’s not a particularly compelling case.”
Article continues below this ad
Another core part of the companies’ pitch is certainty. The state’s private market isn’t getting projects online fast enough to meet the state’s reliability needs and clean energy targets. About 16% of the renewable energy that was projected to come online by last year has come to fruition, according to Potomac Economics, a research firm that studies New York’s energy markets.
Utilities are under strict scrutiny from state regulators and aren’t able to back out of projects without strong reasoning. That provides New Yorkers with some clarity on how much new power supply is expected.
The companies are also not proposing to build wind and solar farms themselves in an effort to lower risks for customers. Builders would submit bids to construct the facilities with the best offerings selected. After construction is completed, the utility would buy the facility and then operate it.
“You would have the developer’s profits and then layer on top of that Con Edison profits,” Peskoe said.
Article continues below this ad
Build-transfer agreements, as they’re called, are designed to reduce risk to customers while also providing some certainty that developments will get completed. If construction costs balloon, regulators can abandon a project with the developer, without customers incurring any costs. However, if reasonable expenses like inflation drive costs, regulators can make a decision on whether it’s in the public interest to move forward.
Renewable energy sector stakeholders acknowledge the frustrating pace of power development in New York but say turning to utility companies won’t solve the problem.
Wind and solar farms have been built at record levels across the country in recent years as other states outpace New York in clean energy growth. The same companies that have built successfully in those other states say New York has a flawed contract system, which has led to many project cancellations.
Once an agreement is set with the state, it’s hard to alter it to factor in additional costs like tariffs, something a slew of developers are claiming is driving up expenses unexpectedly. The state has, up to this point, not given those projects a way to renegotiate a new contract, meaning many will likely be canceled, according to a trade organization representing them.
Article continues below this ad
“Simply shifting ownership does not address the underlying issues in the procurement process,” Boralex, a renewable energy developer active in New York, told the Public Service Commission.
Utilities already find themselves running into similar predicaments as other builders, though, particularly around cost overruns.
Two Con Edison battery energy storage projects — facilities that store power when demand is low and discharge it when the grid is strained — have had significant cost overruns.
Those projects were also three to four times more expensive than what they would have been if built by developers under the state’s existing battery storage permitting and pricing system, according to industry groups.
Article continues below this ad
“(Utilities) don’t really have an incentive to keep costs down, since cost overruns will continue to generate profits,” said William Acker, executive director of the New York Battery and Energy Storage Technology Consortium.
Utilities are also spending historic amounts of money to both upgrade a 100-year-old grid that needs improvement and expand it so renewable energy can be transported from rural to urban areas. Ballooning costs could make dedicating the labor and financial might to new projects difficult.
National Grid’s five-year spending plan ending in 2028 is nearly seven times greater than the five years leading up to 2018.
Avangrid, which serves much of western New York, pushed back the completion dates for several transmission projects because of financial challenges, lack of staff and permitting uncertainty.
Article continues below this ad
Utilities have been out of the generation business for “25-plus years, so they don’t have expertise in this area,” said Gavin Donohue, president and CEO of the Independent Power Producers of New York, which strongly opposes either utilities or state authorities — such as the New York Power Authority — from building and owning renewable energy projects.
The authority is taking over ownership of wind and solar projects after a successful push from progressive lawmakers to invest public money into clean energy. But public institutions should be focused on helping people in need not taking the place of private industry, Donohue contends.
“They (utility companies) do a damn good job at keeping the lights on every day, they have enough on their plate right now,” Donohue said.
Article continues below this ad