The New York State Public Service Commission (PSC) authorized electric utilities to develop 62 local transmission upgrades designed to reduce congestion in three upstate regions as called for New York’s Climate Act.
“New York is making significant upgrades and additions to the State’s existing transmission and distribution systems to integrate new large-scale renewable energy projects into the State’s energy supply, and we must ensure that these investments are smart and cost-effective,” said Commission Chair Rory M. Christian.
New York’s clean energy targets, set by the Climate Leadership and Community Protection Act, call for the state to reach 70% renewable energy by 2030, including 10 GW of distributed solar and 3 GW of storage; to reach 9 GW of offshore wind by 2035; and to reach a carbon-free electricity sector by 2040.
Grid operator NYISO indicated in a recent report that the state needs 20 GW of new renewable generation by 2030 and an additional 75 GW of zero-carbon resources by 2040 to meet state targets. Even adding just 9.5 GW of renewables will increase transmission congestion, NYISO contends.
“The Commission recognizes the need to address congestion in certain parts of the State where renewable energy is already bottled and where additional generation projects are in development or likely to be developed in the future,” said Christian.
Grid Strategies, a power sector consulting firm, said that transmission congestion means that there is insufficient transmission capacity to deliver energy from lower-cost generation resources to customers, requiring the use of higher-cost generators closer to customers. Grid Strategies reported that NYISO’s transmission congestion costs were $462 million in 2019.
The lack of transmission capacity in upstate New York negatively affects ratepayers by increasing the costs of renewable energy resources and curtailing the production of clean energy. The New York PSC said that the $4.4 billion estimated cost of the transmission upgrades to construct leverages at least $1 billion in direct benefits to New York companies and localities and avoids billions in excess payments to renewable power producers.
In the recent New York decision, the Commission approved the requests of Central Hudson Gas & Electric Corporation, New York State Electric & Gas Corporation, National Grid (upstate), and Rochester Gas and Electric Corporation for authorization to develop 62 local transmission upgrades that will reduce congestion in three existing generation pockets in the Capital Region, the southwest, and northern regions of the State.
In total, the 62 projects will create 3.5 GW of capacity for clean energy, or enough electricity for more than 2.8 million average-sized homes. Climate mitigation is the primary purpose and benefit of these projects are climate mitigation, which the PSC points out benefits all New Yorkers. Further benefits include hundreds of high paying construction jobs and significant tax payments to local municipalities arising from the $10.3 billion in expected capital investment related to the projects, according to the PSC.
In a 2021 order, the PSC recognized that renewable generation output in the three upstate regions was already being curtailed due to the lack of adequate transmission capacity. The PSC recognized that these areas are likely to see additional renewable generation development in the future, especially in light of state Climate Act’s renewable energy goals. The 2021 order directed the utilities to identify cost-effective transmission upgrades that would address both existing and future congestion on their systems.
The utilities proposed local transmission upgrades for each region, which resulted in 62 projects that will include upgrades to existing transmission lines, upgrades to existing substations and construction of three new substations. The projects are expected to be completed between 2024 and 2030.
The development and construction of these local transmission upgrades received strong support from most stakeholders that filed comments on the proposed upgrades, including the Alliance for Clean Energy New York, Inc.
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