Transmission Project Approvals Help Unlock NY’s Clean Future
Two new projects recently approved by New York’s electric-grid operator will provide a historic boost the state, putting the most new electricity transmission in 30 years on track for construction and helping it achieve landmark clean energy goals.
On April 8, 2019, the New York Independent System Operator (NYISO), which controls and operates the state’s electric grid, announced the selection of two transmission projects that will enable the delivery of power from generating facilities located in upstate New York, including significant amounts of renewable energy, to downstate population centers like New York City.
The selection of these projects is an important step in ensuring that New York meets its clean energy goals, including Governor Andrew Cuomo’s recent call to boost the state’s Clean Energy Standard from 50 percent to 70 percent renewable electricity by 2030. New York’s Public Service Commission (PSC), the state entity that regulates New York utility companies, must now take action to ensure that these and other transmission projects move forward quickly while ensuring that these projects are sited and constructed in a way to minimize their environmental impact by utilizing existing rights of way (as called for in this policy statement by NRDC and other groups). In addition, the PSC should work with NYISO to quickly identify additional transmission system improvement needs and ensure that the future grid will be able to accommodate the large amounts of clean energy generation that will be built in the next several years.
Still, NYISO’s approval of the projects is a significant milestone. It marks just the second and third time that so called “public policy” transmission upgrades have been approved. We will need more such upgrades to handle the coming influx of wind and solar power.
New York’s process for increasing transmission capacity is yielding results
NYISO’s process for approving transmission lines needed to integrate clean energy was adopted pursuant to a 2011 order from the Federal Energy Regulatory Commission, which regulates the interstate transmission of electricity. FERC’s Order 1000 required NYISO and other grid operators to develop a process to consider transmission needs driven by public policy requirements established by federal or state laws or regulations (such as New York’s Clean Energy Standard) in the local and regional transmission planning process.
In implementing Order 1000, NYISO worked with the PSC to establish a process whereby the PSC identified specific transmission improvements that could help integrate clean energy, and NYISO then selected projects to meet those needs. Accordingly, the PSC identified two areas of need: an area from central to eastern New York, and an area from the Albany region to the Hudson Valley region. After reviewing proposals from several competitors, NYISO selected two projects to meet these needs.
While NYISO should be commended for taking this important step, there are still several steps to go. Project developers must still obtain the necessary approvals and permits to site, construct and operate the facilities, a process that will likely take several years. As a result, this additional capacity is not expected to be available until 2023.
The two projects just approved by NYISO follow the approval of its first public policy transmission project, which involves providing additional transmission capacity in western New York for 2,700 MW of hydroelectric power and imports of renewable energy from Ontario, and is currently going through the state permitting process for siting and constructing the project.
New York must build on this progress to facilitate more transmission of clean energy
While NYISO and the PSC have begun the process of identifying additional transmission needs beyond these three projects, the current proceeding is stuck in limbo with no clear timeline for completion. In November 2018, the PSC solicited input on additional transmission needs, and received feedback from several stakeholders. The PSC has yet to issue a decision identifying these needs, and it is unclear when it will do so. The PSC should issue such decision without further delay so this process can continue to move forward.
The PSC and NYISO should also simultaneously work to improve the current process for identifying transmission needed to meet the state’s clean energy goals and selecting projects to meet those needs. The current process of identifying needs at specific locations on the transmission system (such as choke points in the Hudson valley addressed by the projects just approved by NYISO) has the benefit of allowing an apples-to-apples comparison among project proposals, but it risks ignoring other potential ways to facilitate achieving the state’s broader clean energy goals. The PSC should consider identifying these longer-term goals in addition to specific amounts and locations of needed transmission in the short-term, because doing so could unleash market competition for a much broader range of projects.
For example, the PSC could identify the public policy need broadly as the goal of achieving 70 percent clean electricity supply by 2030, allowing NYISO to select among projects based on their ability to cost-effectively contribute to that goal. Doing so could encourage competition from projects across the state, potentially lowering costs for consumers while providing a roadmap to achieve the state’s 2030 goal.
With the State Assembly, Senate, and Governor all agreeing on the imperative to adopt nation-leading climate legislation (discussed here), New York is poised for a clean energy future. NYISO and the PSC need to take steps to ensure that the state’s electrical grid will be able to meet this challenge.