The New York Public Service Commission (PSC) has rejected requests from renewable energy projects for higher subsidies. The PSC denied the petitions, which sought additional payments to account for inflation and increased costs in building the projects. The projects in question include four offshore wind and 86 land-based renewable energy projects, making up about 25% of the state’s projected electricity demand in 2030. The proposed increases, if approved, would have added about $12 billion to the net present value, effectively doubling the costs to ratepayers of the existing contracts. Developers had sought relief due to pandemic-related supply chain issues and increased costs driven by inflation.
New York Governor Kathy Hochul supported the PSC’s decision to reject the petitions, emphasizing the need to maintain affordability and preserve the competitive procurement process for clean energy projects. Environmental advocates, labor unions, and the companies themselves had argued that New York’s environmental goals would be at risk if the subsidies were denied. However, PSC Chair Rory Christian stated that this decision did not negate New York’s commitment to clean energy efforts and that the projects’ developers had the option to cancel their contracts if they were not financially viable without the requested subsidies. Developers had indicated that the viability of their projects would be in jeopardy without the additional financial support.
The decision has implications for the nascent U.S. offshore wind industry and President Biden’s renewable energy goals. Developers have canceled contracts for offshore wind projects in other states when similar requests for higher payments were denied. Nevertheless, the PSC upheld its commitment to competitive procurement and emphasized that developers should honor their existing contracts. The renewable energy projects in question represented a significant part of New York’s efforts to reduce carbon emissions and transition to cleaner energy sources. The decision raises questions about the future of these projects and the state’s ability to meet its climate and clean energy goals.
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