Dive Brief:
- Some New York utilities are warning that the state's new "build-ready" large-scale renewables development program needs more planning and could cost customers additional money, in comments filed along with those from other stakeholders that call for earlier involvement from project developers.
- The New York State Energy Research and Development Authority (NYSERDA) in June requested regulatory approval for the program, which aims to identify sites for renewables development was authorized by the 2020-2021 state budget. The agency wants to utilize $50 million from the state's Clean Energy Fund to get the program moving.
- Currently, there is no path for private developers to build renewables on state lands, according to Alliance for Clean Energy New York (ACE NY) Executive Director Anne Reynolds. The group supports the build-ready program, but wants a focus on state-owned lands, superfund sites with high environmental remediation costs, and areas with high renewable potential but a lack of transmission.
Dive Insight:
NYSERDA's build-ready program has been authorized by lawmakers and will be moving ahead, so comments filed this week focus on how to implement the new approach to renewables development.
The build-ready endeavor, formally known as the Clean Energy Resources Development and Incentives Program, was authorized in the Accelerated Renewable Energy Growth and Community Benefit Act included in the state's budget this year.
Through the program, NYSERDA plans to work with state partners and local communities to quickly prioritize the development of existing or abandoned commercial sites, brownfields, landfills, former industrial sites and other abandoned or underutilized sites.
NYSERDA says it plans to pursue site control and pre-construction development activities prior to competitively auctioning the developed sites, bundled with contracts for renewable energy payments, and will provide a "de-risked package for private developers to construct and operate projects at these sites."
According to Reynolds, the state should look to engage with developers as early as possible.
"A private sector partner should become involved in the project as early after site selection as possible so that the state can benefit from a developer’s expertise in the project development process," ACE NY said in comments filed Monday.
Rather than conducting an annual auction for properties, Reynolds said NYSERDA could pre-qualify developers in advance and offer properties through a bidding process on a more frequent basis, such as monthly or quarterly. Once a property has been auctioned to a developer, the group suggests NYSERDA coordinate the first meeting between the community and the developer "to ensure that the transition is handled efficiently and smoothly."
"There is no current path for private developers. Not that I know of," Reynolds told Utility Dive. Some state agencies have attempted to develop solar facilities, but usually to address their own buildings' energy use, she said. "This is more for grid-scale projects on large tracts of land."
Because the build-ready program has been authorized by state law, Reynolds said the next step is for regulators to make decisions about funding the program. She said NYSERDA has already issued a request for information asking municipalities to nominate sites, and last week published a request for proposals for consulting services.
NYSERDA has provided a budget for the program through 2025 that projects total costs of $71.8 million. But the agency expects to draw no more than $50 million from the full budget because it anticipates recovery of costs from the sale of project sites over the program’s five-year term.
More details needed
A group of investor-owned utilities filed comments noting their support for New York's clean energy goals, and said elements of NYSERDA's build-read approach "can help that effort." But they also warned the agency's proposal needs to be fleshed out.
"Due to the paucity of program details," the utilities urged the Public Service Commission to place some limits on the program, require NYSERDA to establish protocols for funding build-ready sites, and make any approval of the program conditioned on review of a detailed implementation plan.
The joint utilities include Central Hudson Gas & Electric, Consolidated Edison, Avangrid-subsidiary New York State Electric & Gas, and others.
The utilities also urged the PSC to reject NYSERDA's "backstop proposal" and questioned its finance projections.
NYSERDA's proposal includes "a financial backstop collection mechanism through the electric distribution companies" to pay for the program, similar to what exists for the state's Renewable Energy Credit (REC) and Zero-Emissions Credit payments.
"There are few details of the budget or of the bases for the expectation that the program will be self-sustaining within five years of the program launch," the utilities said. "The question of a proposed customer-funded utility backstop is also problematic in that it exposes customers to financial risks normally borne by project developers."
An unincorporated association of approximately 60 large industrial, commercial, and institutional energy consumers with manufacturing and other facilities in New York also filed comments expressing concern for the program's funding and a lack of details in NYSERDA's proposal, in particular regarding the agency's plan to offer successful bidders of build-ready sites Tier 1 REC contracts.
"Such lack of details is concerning, as merging REC solicitations with the Build-Ready Program can create additional costs for customers," the group said. "Other than using the same contractual provisions and bid evaluation criteria as Tier 1 solicitations, NYSERDA offers no further details concerning the implementation of this proposal."
