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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.\u00a0<\/p>\n
Will Waldron\/Times Union<\/p>\n
Work is done on wind turbines inside Building 273 at the General Electric campus in Schenectady.<\/p>\n
Jim Franco\/Times Union<\/p>\n
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.\u00a0<\/p>\n
Eric Teed\/Adirondack Explorer<\/p>\n
Wind turbines like these in the town of Clinton are critical to meeting clean energy mandates but are also hard to develop affordably.\u00a0<\/p>\n
Will Waldron\/Times Union<\/p>\n
Part of a large solar array is seen along Route 32 in Westerlo.<\/p>\n
Jim Franco\/Times Union<\/p>\n
ALBANY \u2014 New York regulators are considering letting monopolistic utility companies own large-scale power generation again, something they\u2019ve largely been banned from doing in the state for nearly 30 years.\u00a0<\/p>\n
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The issue is unfolding as private energy developers aren\u2019t building enough wind and solar projects to meet New York\u2019s rising power needs or bring the grid to 100% clean energy by 2040, as required by state law.\u00a0<\/p>\n
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The Public Service Commission, which regulates New York\u2019s power, water and telecommunications industries, is considering a paradigm shift in the state\u2019s electricity markets where independent builders and utility companies both work to ratchet up supply.\u00a0<\/p>\n
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\u00a0Gov. George E. Pataki to sell off their power plants in an effort to bolster competition in the energy industry.\u00a0<\/p>\n
Now, the utility companies are primarily responsible for building and operating grid infrastructure to distribute electricity where it\u2019s needed.\u00a0<\/p>\n
Make the Times Union a Preferred Source on Google to see more of our journalism when you search.<\/p>\n
<\/p>\n Add Preferred Source<\/p>\n <\/a><\/p>\n 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\u00a01 gigawatt of solar and wind a year\u00a0\u2014 enough to power roughly 750,000 homes.<\/p>\n Article continues below this ad<\/p>\n It\u2019s part of a national push with electric utility companies citing the nation\u2019s rapidly growing <\/a>energy demand\u00a0to argue for the authority to build power generators. But, to this point, regulators and lawmakers have largely denied their efforts, said\u00a0Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School.<\/p>\n 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\u2019ve been rebuffed until regulators\u00a0reviewing the state\u2019s progress in reaching clean energy targets began considering the possibility as a way to reliably build more renewable power sources. \u00a0\u00a0<\/p>\n Utilities, according to Peskoe, are interested in gaining a new foothold in the renewable energy sector to access \u201cmore profits, more revenue streams.\u201d<\/p>\n The companies are largely\u00a0banned from owning power generation in New York, but they can own facilities through subsidiaries without the same restrictions, Peskoe noted.<\/p>\n Article continues below this ad<\/p>\n National Grid already owns gas plants on Long Island under a separate corporate entity. Con Edison sold <\/a>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.\u00a0<\/p>\n The utility companies want \u201cvirtual guarantees\u201d that they\u2019ll make money, Peskoe said, which wouldn\u2019t 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.\u00a0<\/p>\n \u201cWe know the energy system, we can build things and we can operate them,\u201d Con Edison CEO Tim Cawley said in an interview with Reuters. \u201cWe can help the state achieve its (renewable energy) goals. \u2026 We can do it in a way that\u2019s beneficial for customers.\u201d\u00a0<\/p>\n The electric utilities’ proposal also outlines ways they say they can provide renewable energy more cheaply than private-sector\u00a0developers. That notion was challenged in a study funded by Con Edison.\u00a0<\/p>\n Article continues below this ad<\/p>\n \u201cUtility ownership would likely shift most risks currently borne by private owners to electricity customers with respect to asset performance and cost overruns,\u201d 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.\u00a0<\/p>\n Con Edison \u201cupdated several assumptions\u201d 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.<\/p>\n 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.\u00a0<\/p>\n The initial Brattle study reported that utility companies do have lower financing costs but they weren\u2019t much lower than private\u00a0developers.\u00a0Con Edison cited hostility under\u00a0President\u00a0Donald J. Trump\u2019s administration as leading investors away from renewable energy markets as a reason to raise those estimates for independent wind and solar farm builders.\u00a0<\/p>\n Article continues below this ad<\/p>\n The companies say renewable energy facilities they build can provide more long-term value to customers than if they were constructed by unregulated developers.\u00a0<\/p>\n Currently, wind and solar farms enter into 20-year contracts with the state to operate. Once that period is up, they\u2019re 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.\u00a0<\/p>\n 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.\u00a0<\/p>\n \u201cThe risks are on (utility customers)\u00a0in the interim,\u201d Peskoe said. \u201c(New Yorkers) get potential\u00a0for speculative benefits in two decades; it\u2019s not a particularly compelling case.\u201d<\/p>\n Article continues below this ad<\/p>\n Another core part of the companies’ pitch is certainty. The state\u2019s private market isn\u2019t getting projects online fast enough to meet the state\u2019s 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\u2019s energy markets.\u00a0<\/p>\n Utilities are under strict scrutiny from state regulators and aren\u2019t able to back out of projects without strong reasoning. That provides New Yorkers with some clarity on how much new power supply is expected.\u00a0<\/p>\n 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.\u00a0<\/p>\n \u201cYou would have the developer\u2019s profits and then layer on top of that Con Edison profits,\u201d Peskoe said.\u00a0<\/p>\n Article continues below this ad<\/p>\n Build-transfer agreements, as they\u2019re called, are designed to reduce risk to customers while also providing some certainty that developments will\u00a0get 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\u2019s in the public interest to move forward.\u00a0<\/p>\n Renewable energy sector stakeholders acknowledge the frustrating pace of power development in New York but say turning to utility companies won\u2019t solve the problem.<\/p>\n Wind and solar farms have been built at record levels across the country in recent years as other states\u00a0outpace New York<\/a> 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.<\/p>\n