DiNapoli: New York needs to improve planning to meet clean energy goals

The Public Utilities Commission (PSC) and the New York State Energy Research and Development Authority (NYSERDA) have taken significant steps to plan for New York State’s transition to renewable energy, but must take stronger action to meet the State’s clean energy goals, according to an audit released today by New York State Comptroller Thomas P. DiNapoli. The audit found inadequate planning, monitoring, and assessment of risks and challenges in the PSC’s efforts to help the State meet the Climate Leadership and Community Protection Act (Climate Act) goals of generating 70 percent of its electricity from renewable sources by 2030 and achieving net-zero emissions by 2040.

“New York State is moving in the right direction to transition to renewable energy, but we have found that better planning, better tracking of progress, and timely risk assessment by the PSC are needed to achieve our ambitious clean energy goals,” DiNapoli said. “New York State has been a leader in its efforts to reduce greenhouse gas emissions and the threats caused by climate change, and identifying existing and emerging challenges will improve our chances of success.”

Planning

Auditors found that the PSC, which is tasked under the climate law with establishing and reviewing the state’s renewable energy program, sometimes used outdated data and flawed calculations to determine whether the state could reach 70 percent renewable electricity by 2030. The PSC failed to update its calculations based on new laws and guidelines, which can lead to increased demand and supply of clean energy, such as electric vehicles, new green buildings or electric heating and cooling.

The PSC also failed to fully address other potential risks and challenges that could delay the state’s clean energy goals. For example, according to the independent system operator, the state would need new, not-yet-developed technologies to account for the weather-related intermittency of renewable energy, as well as increased transmission capacity to deliver clean energy to consumers, in order to meet the 2040 goal of 100 percent renewable electricity generation statewide.

The audit found that the PSC had not developed a contingency plan if the Climate Act targets were not met within the required timeframe, other than continued reliance on fossil fuels, including peaking plants, which typically operate at higher monetary and environmental costs.

Project cancellations and delays

Renewable energy project cancellations have slowed progress toward Climate Act goals, and auditors determined that the PSC did not adequately plan for the historical rate of project cancellations. As of April 2023, 230 large-scale renewable energy projects had been awarded contracts under the Climate Act program, and 28 projects were cancelled between 2005 and 2023. Of the remaining 202 projects, only 30% have been completed, and it takes an average of 5 years for a large-scale renewable energy project to be operational, with a 2030 deadline looming to achieve 70% renewable electricity.

Renewable energy contracts

The PSC also failed to fully anticipate contract expirations, which could lead to higher costs. Most renewable energy contracts are for 10 to 20 years. Between 2007 and 2022, 81 contracts expired, which could result in New York paying more than the original price once the contract expires. Additionally, there is no assurance that these facilities will then sell the renewable electricity they produce to New York’s electric grid and help meet the Climate Act’s goals. These situations, for example, were not considered by the PSC in planning to develop a program to meet those goals.

Expected costs

The PSC failed to reasonably estimate or verify other entities’ estimates of the cost of transitioning to renewable energy. Undertaking a project without knowing its costs increases the risk that the project will not succeed. The lack of cost estimates also makes it difficult, if not impossible, to assess its impact on New Yorkers, including those who are currently struggling to pay their utility bills and who have faced rising costs over the past two decades. PSC officials have said they expect the cost of renewable energy to decline over time, but have not produced an analysis demonstrating how quickly they expect those costs to decline.

Other issues affecting the ability of states to achieve their objectives

Auditors identified other factors that could delay achieving the Climate Act's goals, including increasingly harsh weather conditions, demands for renewable electricity, a delay in construction of the Champlain Hudson Power Express line and potential limitations on the hydroelectric power it is designed to provide, and material availability and supply chain issues.

While the PSC is not solely responsible for ensuring that the State is prepared to meet the goals of the Climate Acts, it should discuss the potential impacts of these issues with the agencies responsible for ensuring a smooth transition, determine the impacts of these concerns, and include this information in its projections to increase the likelihood of meeting the goals of the Climate Acts.

The DiNapolis audit recommended that the PSC:

• Undertake a comprehensive review of the Climate Act, including an assessment of progress towards targets and annual funding and spending commitments;
• Continuously analyze and address existing and emerging risks and known issues to minimize the impact on States' ability to achieve climate law objectives;
• Provide a more accurate representation of the likelihood of achieving targets by assessing the expected renewable energy production and timing of projects that are not yet operational; and,
• Conduct a detailed analysis of cost estimates and periodically report the results to the public, and assess the extent to which taxpayers will be responsible for the costs of implementing the Climate Act.

The audit also recommends that NYSERDA:

• Take steps to ensure that proposals are evaluated consistently and contracts are awarded to the most qualified bidders.

In response, the PSC disagreed with several of the audit’s findings, including that it uses outdated or incorrect calculations for planning purposes. It also cited events such as the COVID-19 pandemic that impacted cost analysis. NYSERDA generally accepted the audit’s recommendations and said it has implemented changes to its procedures.

Audit
Planning, procurement and monitoring progress of climate law objectives

Other related works
Review of applications and site permits for major renewable energy projects
Renewable Electricity in New York State: Status and Outlook