Good morning and welcome to the weekly Monday edition of the New York & New Jersey Energy newsletter. We’ll take a look at the week ahead and look back on what you may have missed last week.
CHAMPLAIN HUDSON FORGES AHEAD — POLITICO’s Marie J. French: A transmission line that represents New York City’s best hope for quickly shutting down polluting fossil fuel plants and slashing emissions backed down on a request for bigger subsidies. The Champlain Hudson Power Express’ developers withdrew their petition asking the state’s utility regulator to increase ratepayer-funded payments for the 339-mile line earlier this month. Construction on the line to carry Canadian hydropower into New York City continues, assuaging concerns about the viability of the fully permitted project that’s expected to come online in 2026.
Clean Path New York, another transmission line, also withdrew its request and is expected to come online in 2027. But that project hasn’t yet received permits to begin construction. The companies’ “decision to withdraw their petitions for inflation adjustments is great news because it indicates their continued commitment to advancing these critical … projects on schedule,” said Chris Casey, senior attorney at the Natural Resources Defense Council.
With the developers of the state’s early offshore wind projects threatening to walk away if they can’t secure higher prices from NYSERDA, the Champlain Hudson Power Express, or CHPE, is the largest and most advanced clean energy project expected to plug into the downstate electric grid before 2030.
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RGGI RUMBLE — POLITICO’s Jordan Wolman: Threats against a program aimed at tackling climate change are ramping up in two swing states, forcing Democrats to make difficult decisions about how much political capital to spend defending it.
Virginia Democrats are expected to use their new legislative majority to fight Republican Gov. Glenn Youngkin’s effort to pull his state out of the Regional Greenhouse Gas Initiative, a mandatory carbon trading program designed to limit emissions from the electric utility sector. But in Pennsylvania, Democratic Gov. Josh Shapiro must decide whether to continue his predecessor’s efforts to join the program Shapiro himself has been noticeably cool toward after a court barred the state’s participation last week.
The battles in Virginia and Pennsylvania have major implications for RGGI’s ability to more effectively reduce carbon emissions, particularly if fossil-fuel-heavy Pennsylvania, which is the No. 2 energy producer and the No. 4 emitter of carbon dioxide among U.S. states, joins the program. And it is a test of how politicians in both states balance competing labor, environmental and energy interests without alienating any of the politically important groups.
Here’s what we’ll be watching this week:
MONDAY
— Rep. Frank Pallone calls for a national ban on water beads marketed for kids, 10:30 a.m., Jersey Shore University Medical Center, 19 Davis Ave., Neptune, New Jersey.
TUESDAY
— The New York Power Authority board of directors finance committee meets, 8:30 a.m.
— The New York DEC’s Climate Justice Working Group meets, 2 p.m.
WEDNESDAY
— The NY Renews campaign focused on a slimmed-down agenda launches with events across the state.
THURSDAY
— The Public Service Commission meets at 10:30 a.m. On the draft agenda is a Con Ed diversity, equity and inclusion item and an electric vehicle charging infrastructure.
FRIDAY
— The New Jersey Board of Public Utilities meets, 10 a.m.
— National Grid’s flagship renewable natural gas facility at a sewage plant isn’t injecting gas into the pipeline system, having gone offline a few weeks after its much-celebrated launch.
— Plug Power faces hydrogen supply challenges.
— Castleton-on-Hudson, cut off from the Hudson River, wants Amtrak to slow down trains to restore pedestrian access to the waterfront.
— Li-Cycle, which paused construction on its facility in the Rochester area, faces a shareholder lawsuit.
— Gothamist offers guidance and information about switching out a gas stove in New York City.
— The Nuclear Regulatory Agency has proposed fining Holtec for shipping radioactive material improperly.
— More concerns about flood barriers proposed by the Army Corps of Engineers.
— Salem residents approved the sale of their water utility.
WHOSE MONEY: Paul Sarlo, the chair of the New Jersey Senate Budget Committee, urged Attorney General Matt Platkin to go after Orsted for “breaking its promise” and refusing to pay the state $100 million after it backed out of building a pair of offshore wind farms. Lawmakers created the cancellation fee in exchange for allowing the company to keep hundreds of millions of dollars in tax incentives that could have otherwise gone to state utility customers.
In a statement, Sarlo said, “I am demanding that the Attorney General act immediately to secure the $100 million which was required to be deposited into a state bank account immediately by the legislation.” Orsted is arguing it does not have to pay the money. Sarlo, who was involved in the deal, said his intent was to get Orsted to put up “a non-refundable, irrevocable cash bond of $100 million to be put in escrow as a guarantee.”
But the wording of the law is not so ironclad. It says Orsted must give the state’s Board of Public Utilities a “parent company guarantee or other financial security reasonably acceptable to the board.” The law also required Orsted to put $200 million into escrow to be spent on wind infrastructure, likely at a port in Paulsboro. The $200 million was put into escrow but the $100 million appears to have never left the Danish company’s hands. In a recent regulatory filing Orsted appears to be readying an argument that the whole $300 million deal was not cemented because the board “has not issued a final approval” of a compliance filing the company made about the money. The BPU said it “diligently reviewed” filings. This seems on track to be litigated. — Ry Rivard
SOLAR INDUSTRY CELEBRATES SUCCESS, BRACES FOR CHALLENGES: Smaller-scale solar projects in New York have been a bright spot in the renewables space, even as large-scale renewables have struggled to get built. “We’re ahead of schedule and under budget, and how often can you say that,” said David Sandbank, NYSERDA’s vice president of distributed resources at the New York Solar Energy Industries Association’s conference in Albany on Thursday. New York has seen success with its community solar market in particular, and is on track to beat the 6,000 megawatt of distributed solar by 2025 target and meet the newer 10 gigawatt by 2030 goal. A 5 GW milestone is expected soon.
But the success enjoyed so far has brought its own challenges, solar developers said. They’re worried about restrictive local siting rules and de facto moratoriums, increasingly challenging interconnection costs and processes and declining incentives as inflation continues to escalate costs. The industry is pushing for various policy changes — rate design changes, revised tax incentives to support solar and storage, improvements to the interconnection process and permitting pathways.
OFFSHORE WIND NEXT STEPS — POLITICO’s Marie J. French: Offshore wind developers are split on the timing of an accelerated bidding process NYSERDA plans to run for struggling projects, but they’re eagerly awaiting the next steps. Environmental groups are also weighing in because the projects hanging in the balance are essential to meeting the state’s climate targets. “It is critically important that any renewable energy contracts that may be at risk due to inflation and supply chain pressures be rebid as quickly and efficiently as possible,” wrote New York League of Conservation Voters’ Pat McClellan in comments submitted to NYSERDA. “Even minor delays could put the 2030 goal out of reach and make the 2040 goal more difficult to achieve.”
ANOTHER RED WAVE THAT WASN’T: New Jersey voters appear to have handed Democrats even larger majorities in the state Assembly and allowed to the party to keep control of the Senate in a year that all 120 legislative seats were on the ballot, rejecting Republican attempts to pick up seats using the environment as a wedge issue. Republicans attempted to win races by attacking offshore wind, repeatedly citing unfounded links between the industry and dead whales; by labeling attempts to curb the use of natural gas as a gas stove ban; and by blaming rising energy costs on clean energy.
The results give Gov. Phil Murphy more room to build a legacy before he leaves office in two years, though some of the Democrats elected may not see eye to eye with him on environmental issues either. Parsing of the results played out even before many races were called. In a statement, Ed Potosnak, the head of the New Jersey League of Conservation Voters, Potosnak focused on voters’ rejection of what he called “MAGA candidates’ opposition to clean energy.” But, in a TV appearance on NJ Spotlight, he sparred with Eric DeGesero, who represents the Fuel Merchants Association of New Jersey. DeGesero pointed to Democrats who may be skeptical of Murphy’s energy plans and goals.
For instance, along the Jersey Shore, Sen. Vin Gopal, a moderate Democrat, won reelection while distancing himself from the governor’s position on offshore wind. (Some attacks on Gopal probably didn’t work as well because they came from a Republican who in fact worked in the offshore wind industry.) In South Jersey, John Burzichelli, the South Jersey Democrat, who ousted Sen. Ed Durr — the Republican hero of the 2021 election for his shocking defeat of then-Senate President Steve Sweeney — has criticized the governor’s plan to ban the sale of new gas-powered cars by 2035.
The immediate effect appears to raise questions about the potency of environmental issues when other things — like abortion — may be closer to top of mind for voters. The results could also encourage Democrats to take up more environmental issues in the lame duck session that will happen before the end of the year — but also means there is less urgency to rush things through, since Democrats will have more power after it than before. Issues related to electric vehicles and other things were likely to be on the agenda, though major bills, like one to put a 100 percent clean energy target into state law, were talked about but far from a sure thing. — Ry Rivard
GAS STANDARDS NEEDED, REGULATORS SAY: New York City narrowly avoided a potentially disastrous failure of its natural gas system in December 2022 — and new reliability standards are needed to ensure it doesn’t happen again, a federal report concludes. “We narrowly dodged a crisis last year. Had the weather not warmed up on Christmas Day, it is highly likely that natural gas service would have been disrupted to New York City,” said Jim Robb, North American Electric Reliability Corporation president and chief executive officer. Both Robb and the chair of the Federal Energy Regulatory Commission are calling for “an authority to set and enforce winterization standards for the natural gas system upstream of power generation and local distribution.”
No such authority now exists. The report, which was previewed in a September presentation by staff at FERC, says state and federal laws are needed to set cold weather reliability rules for the gas system. Con Edison and National Grid around Christmas in 2022 called for gas customers in New York City to reduce their usage amid bitter cold temperatures. It was an unprecedented request — and it’s not clear how effective such a voluntary request was for the gas system compared to the electric system where it’s often used. Gas production faltered as temperatures dropped and pipeline operators also faced problems. Con Ed activated a liquified natural gas plant to keep gas flowing. Despite that step, before interstate pipelines recovered, Con Ed “was in danger of losing pressure on, or needing to cut service to, all or large portions of its system,” the report warns. “Had it lost the majority of its system, over a million customers in New York City and nearby areas would have been unable to heat their apartments and houses while the outside temperature was in the single digits, for months.” This didn’t happen on the freezing zero degree day that Con Ed designs its system to meet peak customer demand but on two days around 15 degrees, the report notes. — Marie J. French and Cat Morehouse
SOME GOOD CLEAN ENERGY NEWS: While offshore wind’s future remains uncertain, solar energy is chugging along. Solar Landscape, a solar energy developer founded in New Jersey, announced Monday it was planning to hire 100 new workers next year. Sen. Vin Gopal (D-Monmouth), who has been skeptical of offshore wind, appeared alongside company officials and electrical workers union leader in Asbury Park as they made the announcement.
The company, which focuses on community solar projects, said it wants to double its operations in 2024 and install 100 megawatts of solar. That’s roughly ten times less power capacity than a giant offshore wind project like Orsted’s now-canceled Ocean Wind 1 would have provided — but Solar Landscape is building projects in the state and Orsted is not. — Ry Rivard
