DiNapoli: Improved Planning Needed for New York To Achieve Its Clean Energy Goals

July 17, 2024

The Public Service Commission (PSC) and the New York State Energy Research and Development Authority (NYSERDA) have taken considerable steps in planning for New York State's transition to renewable energy but must take stronger action to meet the state's clean energy goals, according to an audit released today by New York State Comptroller Thomas P. DiNapoli. The audit found inadequate planning, monitoring and assessment of risks and challenges in the PSC's efforts to help the state meet the Climate Leadership and Community Protection Act's (Climate Act) targets, which seek 70% renewably sourced electricity by 2030 and net-zero emissions by 2040.

"New York is moving in the right direction to transition to renewable energy, but we found better planning, monitoring of progress and timely assessment of risks by PSC is needed to achieve our ambitious clean energy goals," DiNapoli said. "New York has been a leader in its efforts to reduce greenhouse gas emissions and the threats caused by climate change, and identifying existing and emerging challenges will improve the likelihood that we succeed."

Planning

Auditors found that the PSC, tasked under the Climate Act with establishing and reviewing the state's renewable energy program, sometimes used outdated data and wrong calculations to determine if the state could reach 70% renewably sourced electricity by 2030. The PSC did not update their calculations based on new laws and directives, which may drive clean energy demand and supply up, like electric vehicles, new green buildings, or electric cooling and heating.

PSC also did not fully account for other potential risks, and did not consider certain challenges that could delay meeting the state's clean energy targets. For example, according to the Independent System Operator, the state would need new technology not yet developed to account for the weather-related intermittency of renewables, as well as expanded transmission capability to get clean energy to consumers, to achieve the 2040 goal of 100% renewable statewide electric generation.

The audit found that the PSC did not develop a back-up plan if the Climate Act's goals were not met within prescribed timeframes, except for the continued reliance on fossil fuels, including "peaker plants," which generally operate at a higher monetary and environmental cost.

Project Cancellations & Delays

Cancellations of renewable energy projects have slowed progress toward meeting the Climate Act's goals, and auditors determined that the PSC did not plan properly for the historical project cancellation rate. As of April 2023, there were 230 large-scale renewable projects awarded contracts within the Climate Act program, and 28 projects were cancelled from 2005 to 2023. Of the remaining 202 projects, only 30% were completed, and on average it takes 5 years for a large-scale renewable project to be up and running, as a 2030 deadline looms to achieve 70% renewably sourced electricity.

Renewable Energy Contracts

The PSC also did not fully plan for expiring contracts, which could lead to higher costs. Most contracts for renewable energy sources have a 10 to a 20 year span. Between 2007 and 2022, 81 contracts expired, which could lead to New York paying more than the original price once the contract expires. Additionally, there is no guarantee these facilities will then sell the renewable electricity they generate into the New York power grid and contribute to achieving the Climate Act goals. These situations, for example, were not factored into PSC's planning to develop a program to meet the goals.

Projected Costs

The PSC did not reasonably estimate or verify other entities' estimates of the cost of the transition to renewable energy. Undertaking a project without knowing the costs increases the risk that the project will not succeed. The absence of cost estimates also makes it difficult, if not impossible, to assess its impact on New Yorkers, including those who are currently struggling to pay their utility bills and who have faced rising costs over the past two decades. PSC officials stated that they expect the cost for renewable energy to decrease as time goes on, but did not produce an analysis that demonstrated how quickly they expect these costs to decline.

Other Issues Affecting State's Ability to Meet Goals

Auditors identified other factors that could delay achievement of the Climate Act goals, including increasingly severe weather, renewable electricity demands, a delayed Champlain Hudson Power Express line and potential limitations on the hydroelectric power it is expected to provide, and material availability and supply chain issues.

While the PSC is not solely responsible for ensuring the state is prepared to meet the Climate Act's goals, it should discuss the potential effects of these issues with the agencies responsible for ensuring a smooth transition, determine the effects of these concerns and include this information in its projections to increase the likelihood of meeting the Climate Act's goals.

DiNapoli's audit recommended the PSC:

• Begin a comprehensive review of the Climate Act, including an assessment of progress towards the goals and annual funding commitments and expenditures;
• Analyze and address existing and emerging risks and known issues on a continual basis to minimize the impact on the state's ability to meet Climate Act goals;
• Provide a more accurate representation of the likelihood of meeting targets by assessing expected renewable energy generation and timing of projects not yet operable; and,
• Perform a detailed analysis of cost estimates and periodically report results to the public, and assess the extent to which ratepayers will be responsible for Climate Act implementation costs.

The audit also recommends NYSERDA:

• Take steps to ensure proposals are evaluated consistently and contracts are awarded to the most qualified proposers.

In response, PSC did not agree with several of the audit's findings, including that it uses outdated or incorrect calculations for planning purposes. It also referred to events such as the COVID-19 pandemic impacting cost analysis. NYSERDA generally agreed with the audit's recommendations and said it had implemented changes to its procedures.

Audit
Climate Act Goals - Planning, Procurements, and Progress Tracking

Other related work
Application Review and Site Permitting for Major Renewable Energy Projects
Renewable Electricity in New York State: Review and Prospects