New York Regulator Approves Contacts for Renewable Energy Transmission Projects

The New York State Public Service Commission on April 14 approved the New York State Energy Research and Development Authority’s contracts for two transmission projects: Clean Path New York LLC’s Clean Path NY and H.Q. Energy Services (U.S.) Inc.’s Champlain Hudson Power Express. The projects will deliver solar, wind, and hydroelectric power from upstate New York and Canada to New York City. This represents the largest renewable energy and transmission projects contracted for the state in the last 50 years. Further, the projects are expected to help reduce the city’s fossil fuel use for electricity by more than 50 percent in 2030 and support New York State’s goal of sourcing 70 percent power from renewable resources on the path to a carbon-free grid.

Clean Path NY will deliver solar and wind energy from upstate New York through a 1,300-megawatt power line. Champlain Hudson Power Express will supply hydropower from facilities owned by HQUS’ parent company Hydro-Québec – sited in Québec – to the city through a 1,250 megawatt power line.

In total, the state’s unique renewable energy and transmission projects are expected to generate $5.8 billion in overall social benefits, including greenhouse gas reductions and improved air quality, as well as $8.2 billion in economic development, including investments in disadvantaged areas. The projects will stabilize long-term energy prices as well as protect against volatile fossil fuel prices when they are built.                                     An index REC structure, included in the contracts, will help protect customers against energy price spikes by lowering Tier 4 program costs when electricity prices rise. A typical residential customer is expected to see a bill impact of 3 percent, or $3 per month once the projects become operational.

As part of the Clean Energy Standard, the commission adopted a Tier 4 program in October 2020 with the goal of increasing renewable energy penetration in New York City and directed NYSERDA to conduct a solicitation. In Jan 2021, NYSERDA released a Tier 4 renewable energy solicitation seeking projects that can deliver renewable energy to New York City, an area of the state that relies heavily on aging fossil fuel-fired generation. The projects are expected to generate 18 million megawatt-hours of clean energy per year from upstate New York and Quebec. By connecting these projects to the portfolio of existing offshore wind projects, the city expects an increase in grid resilience and reliability while enhancing air quality significantly.

By reducing exposure to harmful pollutants, the selected projects are expected to provide up to $2.8 billion in public health benefits. Additionally, the projects will help accelerate the state’s economic recovery from COVID-19 by creating about 10,000 family-sustaining jobs with $8.2 billion in economic development investments. Together, both projects commit to investing a total of $460 million in community benefit funds to create green energy jobs, advance capital improvement projects, restore habitats, and reduce the environmental footprints of buildings in disadvantaged areas. The projects are expected to reduce  77 million metric tons over the next 15 years, the equivalent of removing 1 million cars from roads.