In Brief: New York’s Plan to Build Public Renewable Energy

Two years ago, New York gave NYPA the power to help the state speed up its energy transition. After a long campaign from progressive organizers, legislators passed a law allowing NYPA to build and operate its own renewables, and in January, the authority approved a plan that would make it one of the biggest clean energy developers in the state.

But the plan has faced significant pushback — from the same group that spearheaded the public renewables legislation in the first place. The group now argues that NYPA is not doing anywhere near enough to help the state meet renewable energy mandates inscribed in its climate law.

So what is the future of public renewables in New York? And can they help the state chart its own energy transition in the Trump era?

First of all, what is NYPA?

NYPA serves as a cross between a public utility and an energy developer.

It’s one of hundreds of state “authorities” in New York — essentially, government-run corporations meant to act in the public interest. Many build and operate infrastructure, and have leeway to fund themselves outside of the state budget process, for example by collecting tolls or borrowing through bonds.

The power authority was founded in 1931 by then-Governor Franklin D. Roosevelt, who conceived it mainly as a vehicle for producing public hydropower; it eventually built two major dams on the Canadian border that still supply about a fifth of the state’s power today. It sells that power, often at discounted rates, to local utilities and energy-hungry businesses.

Over the decades, it took a foray into nuclear, built a fleet of small fossil fuel plants downstate, and became a major player in transmission. The ability to build more renewable technologies opens a new chapter, though old-fashioned renewables, namely hydropower, are likely to remain the core of NYPA’s business for the foreseeable future.

What does the new law allow NYPA to do, and what does it require NYPA to do?

At its core, the legislation — which NYPA refers to as its “expanded authority” — allows NYPA to build new renewable energy and battery storage projects, something it was not previously allowed to do. It can partner with private developers to do so, as long as it maintains majority ownership (at least a 51 percent stake) in any project. All of its new clean energy projects must be built with union labor.

The law expands NYPA’s role in meeting New York’s legally binding climate targets, including achieving 70 percent renewable electricity by 2030, but does not require NYPA to single-handedly close the gap if private developers are falling short. The legislation as first proposed did include such a mandate, but it did not survive negotiations between the legislature and the governor.

The final legislation did include a bill discount program for low-income New Yorkers, funded by NYPA’s new revenue from renewables. And it requires the authority to close down its 11 fossil fuel “peaker” plants in New York City and on Long Island by 2030, as long as that doesn’t put the grid at risk of blackouts.

The law also gave NYPA a pretty tight timeline to consult with interested parties, hold public hearings, and arrive at the plan it published in January. So far, it has kept to its schedule, staffed up, and put up an initial $100 million to kickstart its first round of projects. But the hard part — actually getting the projects built — is still to come.

What is NYPA planning to do?

The plan NYPA released in January contains an initial 37 projects, totaling over three gigawatts of energy, that it intends to build over the next five years.

“There is no state in the country that has put together such a large public renewable development strategy, and certainly not so quickly,” said Paul Williams, executive director of the think tank Center for Public Enterprise. “They essentially pulled a 3.5-gigawatt pipeline out of thin air in less than a year.”

All of the projects on NYPA’s current list are either solar or battery storage; the authority is not yet dipping its toes into the wind industry. Twenty-seven of the projects, representing more than 90 percent of the plan’s total energy capacity, are partnerships with private developers. NYPA plans to build the remaining 10, mostly small-scale solar, on its own land.

One project, a community solar array in the Hudson Valley, could be up and running as soon as this summer; some of the largest projects likely won’t be done until late 2030. Three projects listed in NYPA’s draft plan were dropped from the final version, but a NYPA official said they will still move ahead — just without the authority’s participation. The official, who was not authorized to speak on the record, cautioned that other projects could also be dropped as the authority continues to review them.

Why are some still disappointed?

The Public Power New York coalition, which led the charge for the Build Public Renewables Act, pushed hard last year for NYPA to build vastly more renewables — 15 gigawatts’ worth, which is what the group says is needed to meet climate law targets. The group rallied supporters to pack hearings and submit thousands of online comments, and won support from groups including the New York AFL-CIO labor federation and the Building Trades Council. It slammed NYPA’s final plan as one that “will turn us into the state that failed our own climate goals by a mile.”

Why isn’t NYPA building more?

NYPA officials insist that this is just the first round, and that the authority will continue to update and expand its plan moving forward. Moreover, they stress that NYPA faces almost all of the same challenges as any other renewable developer, including limited available land, strict permitting rules, and a slow process to connect to the grid.

NYPA does have some advantages. For one, it has a sterling credit rating, which allows it to take out bonds at much lower interest rates than private developers would pay. This is crucial for energy projects, which require vast upfront investment and can fall apart if the cost of borrowing gets too high. NYPA also owns nearly 50,000 acres of land across the state, some of which it is putting to use in its first round of projects.

But there are limits. If NYPA borrows too much, its credit rating could get downgraded, its borrowing costs would go up, and customers would end up footing the bill, Williams said. Those customers include dozens of municipalities that get their power from NYPA, at some of the lowest rates in the country.

And NYPA has to meet certain standards that private developers don’t, like using all-union labor. Public power entities also have to use entirely US-made materials to fully benefit from federal tax credits under the Inflation Reduction Act, whereas it’s optional for private developers.

How do federal climate rollbacks affect NYPA’s plan?

Since Donald Trump’s election, public power backers have looked to NYPA to save the day as other pillars of the state’s energy transition, like offshore wind, teeter. The authority’s pipeline of onshore projects are relatively insulated from federal interference in decisions like permitting, although some onshore projects require approval from the Army Corps of Engineers — which suspended renewable permitting in early February.