Pleasing All the People Some of the Time: New York Simultaneously Proposes Regulations Implementing Its New Siting Law and Community Benefit Program for Renewable Projects
Earlier this year New York state, conceding that its previously enacted siting law had not been effective in siting large-scale renewable energy projects, enacted the Accelerated Renewable Energy Growth and Community Benefit Act (codified primarily in N.Y. Executive Law § 94-c; hereinafter, the Act). The Act, effectively a new siting law for renewable projects, created, within the Department of State, an Office of Renewable Energy Siting (ORES) and removed renewable siting for new projects from the cumbersome Article 10 siting process run by the Department of Public Service. That law, however, does not really go into effect until specific regulations are issued for the new office. The Department of State took a big step in getting the ORES up and running when it recently issued proposed regulations to govern the renewable siting office. The regulations, issued for public comment, seek to prescribe the elements and timeframes for ORES’s review of renewable energy siting applications. Almost immediately, local governments reiterated concerns that the law and the proposed regulations would weaken local control over project siting. Less than a week later, Department of Public Service staff proposed a Community Benefit Program, aimed at mollifying municipal opposition with money for host communities.
When the legislature passed the Act in April 2020, we observed that the intent of the law was to accelerate the siting of renewable generation and transmission, but that the law did not offer a panacea for ills of its predecessor, Article 10 of the Public Service Law, which, often in the face of local opposition, had resulted in delayed siting of wind and solar projects. When the Act was signed by Gov. Cuomo in April 2020, many local government advocates criticized New York state for taking away the voice of municipalities in the siting of renewable energy generation. Rightly pointing to the adage that you can’t please all the people all of the time, some suggested that the Act and its proposed regulations offer much hope to renewable developers, at the expense of New York’s tradition of home rule. But, by pairing the bitter with the sweet, New York appears to be aiming to please some of the people some of the time.
Mirroring the Act, the recently promulgated regulations offer more detailed and prescriptive requirements to govern ORES’s review of applications and timeframes in keeping with the Act’s stated intent. But, pre- and post-application requirements included in the draft regulations, if promulgated, may have the unintended result of needlessly delaying the start of construction. In the pre-application category, extensive environmental review work is required. Pre-application wetlands delineation, project renderings, and threatened and endangered species studies are to be performed as early as possible in order for ORES to reach a completeness determination on an application. A post-application requirement for a notice to proceed with construction suggests that there will be residual risk on the back end, even after ORES approves a project and permits are issued, leaving open the possibility that ORES could withhold its notice to proceed with construction. The notice is to be issued “promptly,” but that term is undefined, leaving timing to staff. This could have the unintended consequence of delaying the build-out of renewable generation that New York needs to meet its statutorily mandated goals under the Climate Leadership and Community Protection Act (CLCPA). While renewable project developers can likely put in the work on the front end for a return on investment of a shorter construction timeframe, the notice to proceed provision on the backend makes little sense where, as here, a project comes out of the ORES process fully permitted.
The draft regulations vastly improve upon existing regulations issued under Public Service Law Article 10, significantly reducing the opportunity for intervenors and project opponents to litigate every aspect of an application. In the proposed regulations, discovery is limited; applicants need not be bogged down in responding to numerous requests when no adjudicatory hearing has been ordered. Nor can project opponents litigate application completeness, a delay that dogged the Article 10 process. Timeframes and public outreach have been reduced, further streamlining the pre-application process and making it look similar to the process to obtain permits under the New York State Department of Environmental Conservation’s Uniform Procedures Act.
Counterbalancing the newly proposed streamlined siting process is the DPS’s Staff Community Benefit Program Proposal, issued less than a week after the draft siting regulations. The proposal arguably compensates local residents for the loss in local governmental control over siting by paying residents for hosting renewable energy projects. Under the proposal, residential utility customers living in host communities receive an annual bill credit for the first 10 years that a project operates in that community. The credit is funded by the owners of the renewable energy project, who pay a $500 per megawatt hour fee for solar and $1,000 per megawatt hour for wind. The fee would be enforced by requiring the New York State Energy Research Authority (NYSERDA) Renewable Energy Credits contracts to make renewable generation owners prove the applicable fees have been transferred to the applicable utility. The utility then provides the bill credit.
Local governments and project opponents may not be pleased with their reduced role under the Act and its implementing regulations. Renewable energy developers may not be enamored with fees deducted from lucrative subsidy contracts. But, overall, the regulations provide a sensible, prescriptive, and rational process for siting renewable energy that will likely result in completed siting review and permitting much faster than Article 10. And, the DPS staff proposal provides compensation to communities that host these projects. Improvements and modifications will no doubt be made to the regulations and compensation program before being promulgated and adopted – public comment on both the regulations and the proposal runs through Dec. 7, 2020 – but the two together are sure to please at least some of the people some of the time.