New York’s Accelerated Renewable Energy Growth and Community Benefit Act Sends Positive Signals to Renewable Energy Developers, and Revamps Renewable Siting
In January 2020, in his annual budget address, New York Gov. Andrew M. Cuomo proposed a complete overhaul of renewable energy siting. In his 30-day amendments to the executive budget, he proposed the Accelerated Renewable Energy Growth and Community Benefit Act (the “Act”). The proposal would apply to large and mid-sized renewable projects, energy storage, and transmission, as well as directing the state’s agencies and public authorities to establish incentive programs to deliver shovel-ready, permitted sites to developers. The bill signals a shift in thinking about renewable energy siting, from a bureaucratic energy regulatory issue sometimes hindered by fierce local opposition, to an economic development process focused on steering the train of jobs and economic benefits anticipated from renewables over the next decade as a result of the Climate Leadership and Community Protection Act (CLCPA), while continuing to ensure all environmental requirements are met. The bill will need to be approved by the legislature during the state budget negotiations that will occur over the next month.
The Act, weighing in at roughly 40 pages, would consolidate the environmental review and permitting of renewable projects of 25 MW and above, while allowing projects of 10 MW up to 25 MW to opt into the new process. The Act would also provide fast-track siting for co-located energy storage, as well as require regulators to expedite certain transmission projects. The Act would establish a new Office of Renewable Siting within the Department of Economic Development (DED), the state agency arm of the Empire State Development Corporation (ESD). The newly created Office of Renewable Siting would create a permitting system and set uniform standards for siting and construction. It would provide a one-stop shop for environmental review and permitting of covered renewable energy projects, operating under statutory time constraints. Renewable energy projects currently moving through the existing Article 10 siting process would be allowed to opt into the new siting process, which is designed to ensure a determination within the Act’s timeframe.
Project applications must be given a completeness determination within 60 days, and a final determination on permits within one year of the submission of a complete application. Municipalities may advise the Office on local laws, but the Office is not required to apply them if found to be unduly burdensome, and that finding can be made “in view of the CLCPA targets and the environmental benefits of the proposed renewable facility.” Addressing endangered species issues that have slowed renewable energy projects in the past, the Act would have the Office establish upfront mitigation measures, and establishes an endangered species mitigation bank at the Department of Environmental Conservation (DEC), suggesting developers will be able to mitigate endangered species impacts through funding mitigation credits at the DEC bank. DEC is permitted to outsource the banking function to a nonprofit.
Further streamlining the existing siting process, which relies upon full adjudication of siting issues, the bill would require the agency to issue draft permit conditions for public comment within 60 days of an application being found complete. A minimum 60-day public comment period on those conditions ensues. Consultation with other agencies on areas of concern are contemplated to occur within the 60-day period following completeness and prior to circulation to the public of the draft permit conditions. For public comments on the draft permit conditions, only comments that raise “substantive and significant” issues would be adjudicated, a standard taken directly from DEC’s regulations. DEC routinely uses that standard to narrow adjudicated issues about DEC permits. Here, DED would presumably also utilize the standard to winnow out the scope of issues for a hearing, if any. Regarding hearings, it is not clear whether the Act contemplates a new office of hearings within DED, or whether other agencies will ultimately manage the hearing process. In any event, the revised hearing standard provides an important tool to reduce the scope of and time needed for hearings that have become a hindrance to effective siting.
The Act’s wholesale revamping does not stop at renewable project siting. It would also direct the New York State Energy Research and Development Authority (NYSERDA), ESD, and other agencies and public authorities to establish incentive programs for developers, landowners, and host communities. NYSERDA would work with developers and local communities to identify, acquire, and permit shovel-ready sites, potentially combined with ready-made contracts for renewable energy payments, so renewable energy developers can purchase shovel-ready sites through a competitive process nearly risk-free. The bill would authorize NYSERDA and ESD to formulate additional incentives for landowners and municipalities, giving the public authorities leeway to develop programs.
The Act would also require that local property tax assessments for wind and solar projects be based on an income capitalization or discounted cash flow approach, and requires local government consultation with NYSERDA prior to executing an agreement for payment in lieu of taxes (PILOT). This suggests an intent to standardize property tax assessments and PILOT agreements statewide, allowing renewable developers to avoid the inconsistent, patchwork approach of local government property taxation.
Recognizing that energy generated from renewable projects will need effective transmission, the Act would also accelerate transmission development, requiring the Public Service Commission (PSC) to establish a streamlined transmission siting process for transmission projects to be built within existing rights of way, directing public energy authorities to work with the New York Independent System Operator (NYISO) to conduct a comprehensive local and bulk electric transmission study to be filed with the Public Service Commission (PSC). The New York Power Authority (NYPA) is authorized, as approved by its trustees, to develop any bulk transmission improvements found to be needed by the PSC, and is authorized to use existing rights-of-way. DPS may also make recommendations to LIPA on proposed transmission upgrades.
In a nod to host communities, which will see a diminished voice in the siting process under the Act, including the loss of intervenor funding for participation in the siting process, the executive proposal would establish a host community benefit program, providing utility bill discounts for host community residents, as well as local workforce development programs aimed at training host community residents for green energy jobs.
While DED must collaborate with the Department of Public Service (DPS), the proposed legislation would move the renewable energy siting from the traditional purview of the state energy regulator – PSC – to the state’s economic development arm – ESD and DED. This move recognizes both the anticipated economic and jobs impact that renewable energy and transmission siting will likely have in the coming years, but also the ineffective Article 10 siting process that precedes the new proposal. It is not clear where the staff will come to assist DED with this new procedure, and as a practical matter it may turn out that much of the personnel support and expertise comes from DPS and NYSERDA.
If approved by the legislature, the Act takes renewable siting out of the more contentious and adversarial process that has resulted in practice under Article 10 of the Public Service Law. Hard deadlines will go a long way toward ensuring timely determinations on projects. However, there is no standard for when a project may be deemed complete, remaining silent on deadlines for resubmission of incomplete applications, and creating some risk that regulators could still tie up a project in the early stages of the application process. And DEC will still likely require studies of all potential significant adverse impacts of a project, including assessment of potential endangered species impacts, wetlands impacts, forest preserve impacts, and the like, which will take time. While issues like noise and shadow flicker can be addressed through set performance standards applicable to all projects, substantial site-specific review will be needed for each project. Also, although technically exempt from the State Environmental Quality Review Act (SEQRA), a SEQRA-like environmental review will still be required on a site-specific basis for potential areas of impact that are not subject to established performance standards. Nevertheless, once complete, a project would have near-certainty that the remainder of the process would be complete within one year. In that regard, it would appear that the Act would clearly establish a new timeline for renewable energy development in New York.