Hochul and Senate Clash on Public Power, With Utility Workers on Sidelines

This story was published in partnership with The American Prospect.

IN 2020, THEN-GOVERNOR Andrew Cuomo pledged to overhaul New York’s glacial permitting process and show that the Empire State could build new electric power and transmission.

He created a new Office of Renewable Energy Siting, charged with issuing permits for wind and solar projects, and expanded the influence of the New York Power Authority. Established by then-Governor Franklin D. Roosevelt in 1931, NYPA is the largest state public power utility in the country. But it is currently a sleepy asset, providing energy through its existing stock of hydropower plants — and lacks the statutory authority to build new renewable power.

Cuomo created a process to fast track NYPA transmission projects through approval by the state’s Public Service Commission. Meanwhile, he set up a “Build Ready” program at NYSERDA, the state energy agency, to find and prepare promising sites around the state for private developers to build large-scale renewables. Cuomo’s plan won the support of Jigar Shah, a clean energy entrepreneur who now heads the federal Department of Energy’s powerful Loan Programs Office and has become a prominent voice on the urgent need to overcome permitting hurdles.

But in the two years since those rules went into effect, NYPA has proposed just two projects, of which the state utility commission has greenlit only one. The Build Ready program has delivered zero projects. This all has been a disappointing showing, capping off a “lost decade” of clean energy under Cuomo, who had been celebrated as an arm-twister capable — if anyone was — of breaking ground on clean energy.

NOW, PROGRESSIVES HAVE a plan to resurrect NYPA as an active player in the state’s energy mix by charging it with financing, owning, and operating renewable energy infrastructure. After two years of pressure from progressive groups and a public showdown last summer, Governor Kathy Hochul has included a scaled-back version of the Build Public Renewables Act (BPRA) in her proposed budget for 2023.

The version of the bill moving through the legislature, which passed yesterday in the Senate, instructs NYPA to annually evaluate whether private developers are keeping up with the clean energy goals mandated in state climate law, and, if they are lagging, to step in to close the gap.

Supporters of that plan are calling Hochul’s proposal “BPRA-lite,” since it retains the core plan of using the public power authority to build renewables, but drops elements including the annual survey and a mandate to build when private developers underperform, as well as some labor-related provisions and an overhaul to the leadership of NYPA.

“We don’t want to say, ‘Hey NYPA, you can do this if you want.’ We want to say, ‘You are going to do this,’” said Sarahana Shrestha, a new assemblymember who campaigned on her support for public power. In an interview with New York Focus, Shrestha said she was glad Hochul had included a version of the bill, but cast doubt on its potential.

“In my opinion, her version is designed to fail,” she said.

Progressives’ skepticism stems partly from their suspicion of current leadership at NYPA. Assemblymember Bobby Carroll, a lead sponsor of the bill, said it’s not hard to see why Cuomo’s technocratic nudges for NYPA to build transmission haven’t been more successful.

“A body at rest will stay at rest, a body in motion will stay in motion. The status quo will win out, if you don’t change a system completely,” Carroll told New York Focus. Currently, he said, “we have a lack of leadership.”

Some energy experts are skeptical that Hochul’s proposal will achieve much at all. Anne Reynolds, the head of a nonprofit that advocates for private clean energy producers, worries that if NYPA began building aggressively, it would have a chilling effect on commercial development. But she doubts it will even come to that. The proposal, she told New York Focus, “provides NYPA with the absolute maximum flexibility to do whatever they want, and the requirement to do nothing.”

The question of whether NYPA can build again will matter beyond New York. Over the past 50 years, federal policy has hobbled public power agencies, denying them tax benefits given to investor-owned utilities. The Inflation Reduction Act, President Biden’s climate and jobs bill, includes incentives to rev up public power agencies again.

The technical hurdles to building clean energy in New York, such as long interconnection queues and transmission bottlenecks, are daunting. In Carroll’s view, the first step in tackling them is to turn NYPA from a sclerotic manager into a dynamic builder that could attract leaders in clean energy. 

The progressives’ bill would overhaul NYPA’s board of trustees, giving seats to labor, environmentalists, and consumer advocates. That would bring fresh enthusiasm to NYPA. But it could also create more veto points in a state already riddled with entrenched interest groups blocking development. 

To the casual follower of the Public Power campaign, it might appear that “labor,” which is frequently cited in campaign materials, uniformly supports NYPA’s expanded role. But many of the utility workers who staff New York’s power plants and fix electrical outages are deeply skeptical of the quality of jobs awaiting them in publicly owned renewable energy, as well as what they see as proponent’s emphasis on wind and solar over other sources of clean energy, like geothermal and nuclear. Not a single union representing utility workers in New York supports either plan.

That stance raises the question of whether either proposal would transform NYPA into an aggressive builder again. Without governance reforms and a mandate to build, Hochul’s version of BPRA could leave NYPA inertial. But even if BPRA places green energy champions on the board, it could be hard work for labor, clean energy advocates, and environmental justice groups to align their interests and broker compromise to build speedily.

THE NEW YORK CITY Utility Workers’ Union (UWUA) is currently embroiled in negotiations with NYPA at its Zeltmann power plant in Astoria, Queens — a “dual fuel” oil and gas plant that will eventually need to be retired or retooled under state emissions law.

Zeltmann sits up the street from NRG, a privately owned gas plant that has been the frequent target of public calls for retirement. But while NRG may be a greater villain in the public imagination, UWUA president James Shillitto said, NYPA has been a far tougher counterpart in contract talks.

That’s not because NYPA is a more wily negotiator, but because its workers are public employees. New York’s Taylor Law, which went into effect after New York City’s 1967 transit strikes, makes it illegal for public employees to strike. As a result, NYPA workers have little leverage in negotiations, and, Shillitto said, that means that management can drag its feet reaching a deal. Workers have labored under expired contracts for as long as five years.

“NYPA is the only collective bargaining agreement we have that routinely goes years past expiration. That is the way the state approaches it. No respect for the workforce,” Shillitto told New York Focus.

The future of the fossil fuel plant and its utility workers is a sticking point in the current talks. Shillitto is currently trying to write a “just transition” — worker protections during the switch to clean energy — into the new contract. He said he has proposed multiple versions of language stating that if the plant is eliminated, refurbished, or repurposed due to climate goals, the state would retain and retrain the current workforce.

“They outright refuse any language” for a just transition, Shillitto said, and have not even made a counter-proposal. “They say, ‘That’s too far off in the future. We’ll deal with that later.’ And I say, ‘No, it’s being discussed now. ... The people that are working there are nervous. They know that their jobs are endangered.’”

A NYPA spokesperson declined to answer questions on why the authority, according to the union, is refusing “just transition” provisions in its contract. Negotiations are ongoing, he said.

A history of tough contract talks with NYPA has left Shillitto and other representatives of utility workers edgy about supporting a plan that grows its footprint. Beyond long negotiations, they voiced frustration with NYPA oversight and state pension plans.

At a hearing last summer, union representatives raised those concerns. Pat Guidice, business manager of the International Brotherhood of Electrical Workers (IBEW) Local 1049, passionately endorsed the labor language in the BPRA, including prevailing wages and project labor agreements, but said he doubted that such strong worker protections would survive in Albany.

In fact, those very provisions were cut from Hochul’s BPRA-lite. “I believe capital was never going to allow us to be able to have those exceptional standards,” Guidice told New York Focus.

The Build Public Renewables Act campaign has been led by the “Public Power NY” coalition, a set of activists and state climate organizations. While they earned the early backing of powerful unions in the state, including teachers and nurses, they lack the support of utility workers at unions like the UWUA, the IBEW, and the Painters and Allied Trades (IUPAT).

If utility workers are unsure about the climate activists’ proposal, the frustration has run both ways. “They’ll say one thing, and then they’ll tell us other things,” said Lizzy Oh, an organizer with Public Power NY.

“I’ll just say this on labor, because it’s been coming up a lot: We’ve done a tremendous amount of political education and engagement with unions,” Oh said, adding that Public Power coalition members spent a day at an IBEW Training Center.

Shrestha, the Assemblymember, added that she thinks utility workers would be open to supporting the bill. “If you sit down with them, and then tell them what protections the bill has for them, I think the rank and file members especially would support it.”

In Hochul’s version, the NYPA would make available up to $25 million for training workers in renewable energy. Public Power is pushing to add back other labor protections. BPRA also specifies that energy projects built on New York City Housing Authority properties should prioritize hiring local residents. A New York Focus investigation recently found that similar rules are routinely flouted.

On Tuesday, asked at a state budget hearing about labor protections being cut in Hochul’s plan, NYPA CEO Justin Driscoll said that NYPA work is generally subject to project labor standards anyway. “On balance, [Hochul’s plan] increases the position of labor,” he said.

While utility workers have not endorsed either proposal, some trade union leaders have written to the governor in recent days to press her to add back labor language. But they remain skeptical of the overall vision.

“It’s not a just transition when you’re losing your union affiliation, when your wages are going to be cut in half, when you’re going to have to uproot and move somewhere else,” Guidice said. “That’s not a ‘just transition’ anymore. That’s just, ‘transition.’”

UTILITY WORKERS EMPHATICALLY support the Public Power campaign’s plan to give labor a seat, or two, on NYPA’s board. The “democratization” proposal, which would expand the board to a total of 17 members, was dropped in Hochul’s version. If included in the final plan, it would mark a radical departure from the history of NYPA, which in its heyday was run by New York’s most undemocratic — and ruthlessly effective — planner, known for slicing through the state’s knottiest entrenched interests.

In the 1950s and ’60s, “Master Builder” Robert Moses built hydropower projects and paved the way for nuclear, which he saw as an area of future investment in which NYPA should dominate.

Development continued into the 1970s, when NYPA built transmission lines in response to the oil crisis. But by the 1990s and 2000s, it joined a national trend towards liberalizing energy markets, privatizing major holdings and functioning mostly as a steward of its remaining resources. In 2000, it sold off two nuclear plants for $967 million, in the largest single asset privatization in New York’s history.

Today NYPA is overseen not by a career public official but by a private developer. Chairman John Koelmel is a businessman from western New York who previously ran First Niagara Financial Group, a bank in Erie County, and led the development of a hockey and entertainment complex in Buffalo, funded by billionaire sports team owners Terry and Kim Pegula, before resigning abruptly. All six current board members are Cuomo appointees. 

James Hansen at the conservative Empire Center think tank has argued that more than doubling the size of the board would create conflict and undermine NYPA’s responsibility to provide reliable and affordable electricity. 

Similar reforms that expanded the board of the Tennessee Valley Authority, the largest public power company in the US, have been seen as a failure by advocates for clean and reliable energy. TVA’s expanded board “has morphed into a rubber stamp for its CEO … [and] steadily digressed from its purpose to oversee TVA’s activities in favor of being a rung on the political ladder,” one renewable energy advocate wrote last year.

Beyond snubbing climate advocates who would like a seat on the board, Hochul’s plan does not provide funding for community environmental organizations that the BPRA would have empowered. An energy researcher who has tracked the political dynamics of the campaign argues that Hochul’s declining to expand funding for environmental organizations might be one reason nonprofits oppose her version of the plan. 

Asked about the removal of “democratization” provisions, Hochul spokesperson Will Burns told New York Focus, “The NYPA board is functioning well and has the Governor’s full confidence.”

As to the bill’s dropping the mandate to build, Burns said, “A mandate does not allow NYPA’s trustees to exercise their judgment as fiduciaries to consider whether NYPA can undertake new projects considering such matters as NYPA’s financial circumstances, and for approved projects, determining what NYPA’s role in those projects should be.”

Carroll, for his part, is optimistic that if NYPA is empowered to deliver renewables, it could attract new talent. “I am exceptionally familiar with how tough it is to hold old, crusty bureaucracies accountable in New York,” he said. But half the battle is making NYPA an agency with real clout. 

“If NYPA is just a conduit to get some power to some state agencies and state-owned buildings, and manage what’s left of some hydro energy, it isn’t a job that people long for,” Carroll said. But given the right tools, he added, the state could “turn NYPA into the gold standard of publicly owned renewable energy.”

CORRECTION: February 16, 2023 — This article was corrected to reflect the fact that neither the BPRA nor Hochul’s proposal would prohibit NYPA from building geothermal energy projects, and that Robert Moses paved the way for NYPA to build nuclear power plants, rather than building them himself. The spelling of Lizzy Oh was also corrected.