| | | | |  | | By Marie J. French and Ry Rivard | Presented by National Fuel | 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.
| | ENVIRONMENTAL FUNDING PUSH: A broad coalition of environmental advocates and allied groups is pushing for Gov. Kathy Hochul to increase funding for water infrastructure and other priorities. New Yorkers for Clean Water and Jobs last month told Hochul she should increase water infrastructure funding to $600 million annually in her upcoming executive budget. Hochul unsuccessfully sought to halve the annual funding for that program last year. “We urgently need to continue to modernize New York’s aging drinking water and wastewater infrastructure that can’t keep up with the state’s current needs. New York communities — rural and urban, in all regions of the state — continue to suffer the consequences of failing infrastructure,” the letter states. The coalition also wants Hochul to increase funding for the Environmental Protection Fund, a flagship open space conservation and other environmental priority funding stream, to $500 million. They also push for more staff at environmental agencies, capital funding for the Department of Environmental Conservation and parks, and ongoing implementation of the state’s $4.2 billion bond act. — Marie J. French HAPPY MONDAY 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. FERC FINES PSE&G: FERC fined New Jersey’s largest utility $6.6 million for “failing to fully and accurately” describe the condition of a transmission line the company spent over a half billion dollars to replace, according to a consent agreement issued on Friday. In 2017 and 2018, PSE&G provided regional grid operator PJM with information that suggested the 50-mile line, known as the Roseland-to-Pleasant Valley corridor, was at the end of its useful life after 90 years. But, FERC found, that information was not always correct. For instance, PSE&G told the grid operator that scores of towers along the line needed “extensive reconstruction” but, according to FERC, an external consultant for the utility used that precise language for fewer than 10 towers. The utility also presented PJM with information about the condition of towers that assumed steel was corroding even though such corrosion was “not observed or expected,” according to FERC. The new transmission line, a $546 million project, went into service last year. In agreeing to pay a civil penalty, PSE&G neither admitted or denied allegations against it. In a statement, the company pointed out FERC did not challenge that the line needed to be replaced. “While FERC’s review found that there were inaccuracies in materials that were provided to PJM as part of the approval process, FERC does not challenge the end of life determination that determined the need to rebuild the RPV line to ensure reliability and system benefits such as enhanced capacity,” PSE&G spokesperson William J. Smith said in an email. — Ry Rivard
| | | | A message from National Fuel: Choose real progress: Balanced energy solutions. Reaching New York State’s climate mandates calls for realistic strategies that consider the needs of the diverse regions that make up our state. With an “all-of-the-above” approach, we can complement the development of weather-dependent renewables with the consistency of natural gas, low-carbon fuels, and their delivery systems, supporting our energy future while protecting reliability and affordability. Advocate for our energy. Support a measured, balanced approach to energy. Learn More. | | | | | — LETTER: Biodiesel and heating oil industry officials say there’s a role for biofuels in New York’s energy mix.
| | — Water levels in New Jersey aquifers continue to drop.
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| | HOCHUL OPENS CLIMATE SUPERFUND NEGOTIATIONS — POLITICO’s Marie J. French: Gov. Kathy Hochul proposed tweaks to lawmakers’ most recent signature climate bill earlier this week, opening the door to negotiations. The bill’s sponsors told POLITICO on Thursday that those tweaks came in the form of chapter amendments circulated by Hochul’s office. It’s a significant step that indicates the governor is considering signing off on the Climate Superfund bill — and it jump-starts discussions before the end of the year, the deadline for the governor to act on bills passed this session. “It’s a good sign that the governor’s office is proposing changes as opposed to vetoing the bill,” said Assemblymember Jeff Dinowitz, a Democrat from the Bronx and the bill's sponsor. “We have a few weeks to figure this out.” DRBC TAKES DROUGHT STEPS: The Delaware River Basin Commission stopped short of declaring a “drought emergency” across the basin, which provides water to more than 10 million people, but the commission did declare a “water supply emergency” at a board meeting on Thursday. The commission approved measures to preserve and protect its supplies should “Basinwide drought” conditions be reached. — Ry Rivard SHELL LA VIE: Reuters reported this week that Shell, which owns part of Atlantic Shores, “is stepping back from new offshore wind investments and is splitting its power division following an extensive review of the business that was once seen as a key driver of the company's energy transition strategy.” While Atlantic Shores is waiting to hear whether it will get a new contract from the New Jersey Board of Public Utilities, Shell seems to remain interested in the project, which is the furthest along in the state. Asked about the project, a Shell spokesperson said, “While we will not lead new offshore wind developments, we remain interested in offtakes where commercial terms are acceptable and are cautiously open to equity positions if there is a compelling investment case.” — Ry Rivard BUSINESS BASHES CLIMATE SUPERFUND — POLITICO’s Marie J. French: Business groups across New York, including fossil fuel interests, want Gov. Kathy Hochul to veto a retroactive charge on large oil and gas companies. The bill was the only major climate action passed by lawmakers this year and would raise $75 billion over 25 years for investments to adapt to the impacts of a wetter, warming planet. The groups, in a letter sent to Hochul on Wednesday, say the Climate Superfund measure unfairly targets sellers of fossil fuels when consumers who used the fuel are more to blame for planet-warming emissions. Signatories include the Business Council of New York State, the Long Island Association, local chambers of commerce, the state’s forestry industry, the New York Farm Bureau and others. “Given the potential legal challenges, costs, and discriminatory nature of the climate superfund, we respectfully request that you veto this legislation,” the letter states.
| | | | A message from National Fuel:   | | | WILLIAMS PIPELINE CEO TARGETS STATE PERMITTING — POLITICO’s Ben Lefebvre and Marie J. French: The head of one of the country’s largest pipeline companies said Tuesday that the Federal Energy Regulatory Commission should be in charge of infrastructure permitting and environmental reviews — and states should be removed from the process. Williams CEO Alan Armstrong said President-elect Donald Trump's victory and Republicans' control of both chambers of Congress mean that infrastructure permitting reform is virtually certain — and to ensure the permitting process is as smooth as possible, FERC should be designated as the entity with ultimate responsibility. “It needs to be headed by one agency, one primary agency, not multiple agencies,” Armstrong said in an interview with POLITICO, referring to the permitting and environmental review process. RENEWABLES AWARDED, COSTS INCREASE — POLITICO’s Marie J. French: New York utility customers will pay more to subsidize wind and solar projects under deals announced by Gov. Kathy Hochul on Tuesday. NYSERDA, the state’s clean energy agency, contracted with 23 renewable projects totaling more than 2,300 megawatts of onshore renewables. That’s enough to power about 700,000 homes. The nominal weighted average strike price — essentially, the total revenue from energy prices and the subsidies paid by NYSERDA that a developer will earn — is $94.73 per megawatt hour. The payments for renewable energy credits from NYSERDA drop when energy prices rise. Customers will see bill impacts over the life of the projects of about 0.74 percent, or 70 cents per month, according to the state. Projects only begin receiving payments once they’re operational. That’s much higher than the price of deals for similar amounts of renewables announced in 2021, at only 13 cents per month in customer bill impacts, and 2022, at about 32 cents per month. — More numbers: NYSERDA estimated in comments filed with the Public Service Commission in August 2023 that the weighted average strike price of the adjusted contracts would have been $104.36 per megawatt hour if developers got an inflation adjustment for already-awarded deals. The strike price for the 2023 awards is 9 percent less than that potential adjustment, which was rejected by the PSC.
| | | | Write your own chapter in the new Washington. From the Lame Duck Congress Series to New Administration insights, POLITICO Pro delivers intelligence across 22+ policy areas to help you anticipate and navigate change. Discover how a Pro subscription empowers you. Learn more today. | | | | | SUPERFUND PRESSURE CONTINUES: Gov. Kathy Hochul is facing more pressure to sign the Legislature’s highest-profile climate bill of this past session — including from a potential primary challenger. Rep. Ritchie Torres, a Democrat from the Bronx who is exploring a run for governor, has joined a chorus of congress members backing the Climate Superfund measure. The bill would charge large fossil fuel companies for historic sales of oil and gas to fund investments to adapt to worsening storms, rising seas and other impacts from climate change. “It is time for the biggest polluters to take responsibility for their contributions to climate change and help fund the solutions,” Torres said in a statement. “Together, we can work towards a more sustainable and equitable future for all." Proponents say costs would not be passed on to consumers because the charges to companies are based on historic sales. Opponents, including the state’s business community, argue it would raise costs and warn it would be subject to legal challenges. — Marie J. French
| | | | A message from National Fuel: Choose real progress:
Balanced energy solutions.
Reaching New York State’s climate mandates calls for realistic strategies that consider the needs of everyone throughout the diverse regions that make up our state, especially those that are heavily impacted by winter weather.
With an “all-of-the-above” approach to energy, we can complement the development of weather-dependent renewables with the consistency of natural gas and low-carbon fuels delivered through secure, existing systems. Using all the tools available to us, we can help to improve our energy future while protecting reliability and affordability.
Advocate for our energy.
Join us in supporting a measured, balanced approach to energy by signing an online petition in favor of effective, common-sense policies that prioritize affordability and choice.
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