Another clean energy project requests more money

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Sep 05, 2023 View in browser
 
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By Marie J. French and Ry Rivard

QUICK FIX

WELCOME BACK with a special Tuesday edition of the New York & New Jersey Energy newsletter. After our week-long hiatus, get set to dive back in for what promises to be a jam-packed late summer and fall as New York seeks to preserve the projects its clean energy goals rely on, move forward with the pending offshore wind awards and manage a grid reliability shortfall in New York City.

And Ry will of course have you covered as New Jersey’s offshore wind drama plays out and election season heats up with clean energy issues impacting races there.

TRANSIT THREAT — POLITICO’s Ry Rivard: As the country’s public transit systems try to get back on track from the Covid-19 pandemic, Northeastern railroad unions are threatening strikes that could damage the recovery. Unions representing workers on systems vital to New York City, Philadelphia and New Jersey are considering walkouts, strikes and other job actions that would disrupt the commutes for thousands and thousands of people in the most densely populated region of the country.

ANOTHER CLEAN ENERGY COST INCREASE? — POLITICO’s Ry Rivard: The developer of Champlain Hudson Power Express — a 339-mile hydropower transmission line crucial to New York City’s clean energy plans — told state utility regulators last week that if the state is going to help struggling offshore wind companies combat rising costs, the state should help other clean energy projects too, including the power line.

“Like the other many developers that have filed petitions, [the Champlain Hudson project] faced global supply chain shortages and market disruption, and the substantial negative impacts of inflation and interest rate increases on construction costs in both the United States and Canada,” the power line's developer told the Public Service Commission in a petition submitted Monday.

The $4 billion project is being carried out by Transmission Developers Inc., a subsidiary of the Blackstone Group. Hydro-Québec, a Canadian public utility, will supply the power using its existing hydropower dams in Quebec as part of an expensive bet on foreign hydropower. If the transmission project, known as CHPE, is not “treated equally and consistently,” the developer warned the PSC that its actions would “be both arbitrary and unfair.”

— THOUGHT BUBBLE: This project is already under construction, so it begs the question what the developer will do if its ask is rejected, and whether other renewable projects that have already put steel in the ground will also want more funding. CHPE’s significance in achieving the state’s clean energy goals should not be understated. It’s also essential to maintaining reliability margins in future years, according to the NYISO’s reliability reports.

— NYSERDA came forward with some analysis of the earlier requests from offshore wind developers, Clean Path and the Alliance for Clean Energy and said a price hike for the developers “could help preserve progress” on the state’s climate goals “while mitigating risks of future costs to ratepayers.” (The authority isn’t endorsing an increase, though, according to the Times Union.) The total hike could increase the costs of the clean energy subsidies to ratepayers by about 64 percent.

— Offshore wind developer Ørsted is also hitting up the feds for more money. The company "urged the Biden administration to ease access to some federal incentives for renewable energy, warning its plans to build major projects along the East Coast could be in jeopardy because of rising costs," POLITICO's Kelsey Tamborrino reports.

The Danish company, the world’s largest offshore wind developer, announced it may take a $2.3 billion writedown because of supply chain constraints, high interest rates and a “lack of favorable progress” in the tax credit rules under the Inflation Reduction Act. Those factors could derail its planned wind farms off the New Jersey and New York coasts.

OFFSHORE WIND CRITIC WORKED FOR INDUSTRY — POLITICO’s Ry Rivard: A New Jersey state Senate candidate who has made criticism of offshore wind energy a top plank of his campaign represented a company that sought to build the power lines to bring that wind power ashore.

HAPPY TUESDAY MORNING: Let us know if you have tips, story ideas or life advice. We're always here at mfrench@politico.com and rrivard@politico.com. And if you like this letter, please tell a friend and/or loved one to sign up.

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Around New York

— Are you killing enough lanternflies?

— A program to swap out dangerous e-bike batteries for safer ones hasn’t achieved widespread success.

— Composting programs are rolling out in Buffalo and expanding in New York City.

— Some community solar customers are still awaiting payment from Con Ed.

— New York lacks labor protections in extreme heat conditions, despite a heightened risk of injury.

— PFAS settlement revisions lead New York to accept the agreement.

Around New Jersey

— Support for offshore wind appears to be dropping in New Jersey, a poll finds.

— More review for a Tennessee Gas Pipeline project after a court decision.

— Federal support could be coming for New Jersey’s nuclear plants.

— More PFAS found in New Jersey drinking water systems.

What you may have missed

FALL 2023: We’re now heading into the final stretch of New Jersey’s off-cycle legislative elections, where all Assembly and Senate seats are on the ballot.

Energy is a significant issue in some races, as we’ve been reporting for a while. Perhaps the most obvious sign of that was a joint statement several weeks ago from Assembly Speaker Craig Coughlin and Senate President Nick Scutari, both Democrats, trying to give Democrats some cover over objections from coastal communities to offshore wind projects.

EV cars are now in fray, as New Jersey formally looks to adopt California’s plan to ban the sale of new gas-powered cars by 2035. This is something Murphy mentioned in a major speech earlier this year, but the release of the rule makes the move more real. Eric DeGesero, a representative for the Fuel Merchants Association of New Jersey and New Jersey Propane Gas Association, is trying to tie that ban with other policy nudges by saying, “it isn’t just cars, they’re just the start – electric stoves, electric heaters, and electric water heaters are next.”

That stove “ban” reference is to the hundreds of millions of dollars the state Board of Public Utilities wants energy companies to spend on helping customers voluntarily replace gas appliances. (Even DeGesero has acknowledged that’s not a ban.)

But, of course, clean energy policy isn’t being pushed in a vacuum: Murphy and clean energy advocates are responding to very real and increasingly distressed concerns about climate change. Last year, 30 people died in the state because of extreme rainfall from the remnants of Hurricane Ida. This year, we’ve seen wildfire after wildfire in the state, not to mention inhaled the smoke drifting down from Canada. These kinds of events — if not these very events or their intensity — are things we’d expect to see and see more of because of climate change.

The next few election cycles might provide an interesting chance — and, in climate advocates’ view, one of the last chances — to see which one prevails when voters head to the polls with extreme weather events top of mind. — Ry Rivard

TOMS RIVER OBJECTIONS — Three Republican lawmakers are criticizing the New Jersey Department of Environmental Protection’s settlement with the owners of the notorious Toms River Superfund site. The deal, which was finalized last week, is expected to draw a legal challenge from one of the leading coastal environmental groups, Save Barnegat Bay.

Sen. Jim Holzapfel and Assemblymembers Gregory McGuckin and John Catalano, all Ocean County Republicans, said they support the threatened legal action and the objections behind it. Their objections could present a problem for Democrat Gov. Phil Murphy’s administration. The objections to the Toms River deal squares with criticism of the settlement from leading environmental groups, including Sierra Club.

“It’s a slap in the face to give a $500,000 fine to this company after all the damage and fear caused by the acts of their predecessor,” Holzapfel said in a statement. “The fear gripped the community for decades. Numerous pieces of legislation had to be passed to help strengthen the water system and remediate the area.”

The DEP has agreed to drop any legal claims against BASF Corporation for damages to New Jersey natural resources at the old Ciba-Geigy chemical plant in Toms River — a plant that produced decades of pollution that is tied to a cluster of childhood cancer cases — in exchange for what amounts to a new park in the town. — Ry Rivard

CON ED SEEKS $1.2 BILLION FOR JAMAICA NETWORK — Con Ed is asking the New York Public Service Commission to approve upgrades to its Jamaica Network, which serves JFK International Airport, the Long Island Railroad transit hub at the Jamaica Station and several Metropolitan Transportation Authority bus depots that host hundreds of buses that will be switched to EVs. The company says that by 2026 forecasts sow load growth will cause peak demand to exceed the area’s capabilities.

Con Edison wants to split Jamaica Network, its largest, into two separate networks, a smaller Jamaica Network and the newSpringfield Network, build a new Eastern Queens Transmission Substation and Idlewild Distribution Area Substation to supply the Springfield Network, and transfer 170 MW of load from the Jamaica Network Distribution Area Substation to the Idlewild Distribution Area Substation. The project, known as Reliable Clean City — Idlewild Project, will also create new points of interconnection for energystorage and future clean energy projects, the company said. — Ry Rivard

WINTER WATER SHUTOFF RULES — The New Jersey Board of Public Utilities is proposing to amend its winter termination rules — which protect customers from losing vital utility service in the winter — to expand them to water and wastewater customers, thanks to a 2021 law. The proposal was posted in this week’s state Register and public comments are being accepted until 5 p.m. on Oct. 20. — Ry Rivard

CLEAN ENERGY COST CONCERNS — POLITICO’s Marie J. French: A generational push to tackle climate change in New York is quickly becoming a pocketbook issue headed into 2024.

Some upstate New York electric customers are already paying 10 percent of their utility bill to support the state's effort to move off fossil fuels and into renewable energy. In the coming years, people across the state can expect to give up even bigger chunks of their income to the programs — $48 billion in projects is set to be funded by consumers over the next two decades.

The scenario is creating a headache for New York Democrats grappling with the practical and political risk of the transition.

CONGESTION PRICING — POLITICO’s Ry Rivard: New York drivers would have to pay roughly 50 cents more in new congestion pricing tolls for every $1 discount New Jersey drivers received, members of the board tasked with setting the tolls heard Thursday. The tolls, which are expected to cost between $9 and $23, are meant to raise billions of dollars for Metropolitan Transportation Authority construction projects and reduce traffic in parts of Manhattan.

New Jersey Gov. Phil Murphy and other New Jersey politicians are protesting New York’s congestion pricing plan as unfair. Murphy has sued the federal government and made other threats aimed at the tolling plan. Earlier in the day, the governor released a new letter requesting credits for New Jersey drivers who cross bridges and tunnels into Manhattan. But the numbers discussed at the second meeting of New York’s Traffic Mobility Review Board did not help make New Jersey’s case to a board made up of New York business, labor and civic leaders — since the figures showed helping New Jerseyans would hurt New Yorkers.

 

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