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PSC issues decision to preserve competitive renewable energy market and protect consumers

By: Chloe Emanuel 13/10/2023 Department of Public Service New York State

General Windfarms

The New York State Public Service Commission (Commission) made a significant decision today, denying petitions from a group of offshore wind developers and a state renewable energy trade association seeking billions of dollars in additional funding from consumers for four proposed offshore wind projects and 86 land-based renewable projects.
In a move aimed at preserving a competitive bidding process designed to provide renewable energy resources to New York in a cost-effective and fair manner while protecting consumers, the Commission firmly rejected the petitions.

Commission Chair Rory M. Christian articulated the Commission's stance, stating, "The requested amendments to the contracts would have provided adjustments outside of the competitive procurement process; such relief is fundamentally inconsistent with long-standing Commission policy. The Commission has repeatedly stated that competition in the procurement process is necessary to protect ratepayers and provides the soundest approach to mobilize the industry to achieve our critical State goals dependably and cost-effectively, and we do so again through today's action."
The petitions denied today were submitted by Empire Offshore Wind LLC and Beacon Wind LLC, Sunrise Wind LLC, and the Alliance for Clean Energy New York, Inc. (ACENY). These petitions sought to amend Renewable Energy Credit (REC) and Offshore Wind REC (OREC) purchase and sales agreements with NYSERDA to address recent inflationary pressures impacting project economics.

After a thorough examination, the Commission determined that the contract amendments sought by these petitions were not in the best interest of the State's ratepayers. Granting the request to amend the executed contracts outside the competitive procurement process would have led to as much as a 6.7 percent increase for residential customers and up to 10.5 percent for commercial or industrial customers on monthly bills, depending on the service territory and the level of relief provided—increases on top of what had already been committed.

The Commission emphasized its continued support for the Climate Leadership and Community Protection Act, which sets decarbonization requirements for various sectors of the economy, ambitious renewable energy deployment targets, and strives to ensure utility rates remain just and reasonable. The decision underscores that competitive procurement remains the most efficient path to help New York achieve its clean energy goals, such as having at least 70 percent of electric load served by renewable energy by 2030, developing 9,000 megawatts of offshore wind energy by 2035, and meeting statewide demand with zero emissions resources by 2040.
All three petitions requested an order from the Commission directing NYSERDA to incorporate an adjustment mechanism into existing REC and OREC purchase and sales agreements to account for inflation and other economic impacts cited by the developers. These petitions elicited extensive comments from stakeholders, with supporters emphasizing the State's clean energy goals and the need for relief to stay on track toward achieving them. In contrast, opponents expressed concerns about increased prices borne by ratepayers and the disruption of the competitive process used to award these projects.

The petitions argued that the COVID-19 pandemic had exposed the projects to global and regional supply chain bottlenecks, high inflation, and increased capital costs driven by rising interest rates. They also highlighted the impacts associated with the war in Ukraine, including increased demand for renewable energy and resulting shortages and price hikes for key components and equipment.

It is worth noting that petitions with similar requests submitted by Clean Path New York LLC for the Clean Path New York project and by H.Q. Energy Services (U.S.) Inc. for the Champlain Hudson Power Express Project are still under review by the Commission.
The full details of today's decision can be accessed on the Commission's website under Case Numbers 15-E-0302 or 18-E-0071. For further information, Commission documents can also be obtained from the Commission's Files Office in Albany, New York.
If you require language assistance regarding this press release, please call 1-800-342-3377 for free language assistance services.

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PSC issues decision to preserve competitive renewable energy market and protect consumers

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