Memorandum in Opposition - A.6251-B (Carroll) similar to S.4378-B (Brisport)

A.6251-B (Carroll) similar to S.4378-B (Brisport) - AN ACT to amend the environmental conservation law, in relation to establishing the "pollution justice act of 2021" and implementing a plan to replace peaker plants with renewable energy systems

The Independent Power Producers of New York, Inc. (IPPNY) is a trade association representing companies involved in the competitive power supply industry in New York State and in the development of electric generating facilities, the generation, sale, and marketing of electric power, and the development of natural gas transmission facilities. IPPNY Member companies produce the majority of New York's electricity, utilizing hydro, nuclear, wind, natural gas, solar, energy storage, biomass, oil, and waste-to-energy.

IPPNY opposes A.6251-B (Carroll) similar to S.4378-B (Brisport). This legislation could have major negative consequences for electric system reliability. The bill would require owners and operators of peaker plants located in, or adjacent to, disadvantaged communities, primarily in New York City, to submit a compliance plan at the time of renewal of a Title V air permit from the New York State Department of Environmental Conservation (DEC) to specify how the facility will be converted to operate using renewable energy or battery energy storage in five years. If a facility is needed for reliability and a replacement with a renewable energy system or energy storage is infeasible, there can be only one five-year extension of the deadline for replacement. The DEC cannot approve a permit for a facility that does not comply with the plan.

Addressing impacts on disadvantaged communities is important and so is maintaining electric system reliability. Studies commissioned by the New York Independent System Operator (NYISO) and for the Climate Action Council found that dispatchable generation will be necessary to back-up intermittent renewable resources and duration-limited energy storage to meet the goals of the Climate Leadership and Community Protection Act (CLCPA). In 2040, New York will need between 15,000 MW and 25,000 MW of peaking plant capacity. It is infeasible to provide this level of peaking plant capacity with renewable energy systems or energy storage. A.6251-B (Carroll) similar to S.4378-B (Brisport) essentially would require the replacement of peakers ahead of the timeline under the CLCPA and without consideration for NYISO reliability findings, which may require peaker retention beyond a single five-year Title V air permit extension. This bill could result in power outages due to a lack of dispatchable energy capacity during multi-day stretches of extreme hot and cold weather, especially in New York City, creating a public health and safety problem.

The NYISO has indicated that resource adequacy margins are tightening across the New York grid from Buffalo to Long Island. Reliability margins are thinning to concerning levels as soon as 2023, which is next year. The concerns about the adequacy of electricity supply will be even more magnified, as the State looks to undertake the aggressive electrification of the sectors of the economy that is needed to meet the CLCPA’s targets.

The NYISO has indicated that New York State and New York City are projected to become a winter peaking system by 2035. Not all contracts under Tier 4 of the Clean Energy Standard will provide installed capacity in the winter, when New York will need that capacity the most as the state rapidly accelerates its electrification efforts.

This legislation should allow facilities designated as needed for reliability to be able to continue to operate until competitive solutions are developed to meet identified reliability needs. The NYISO has studied the DEC’s existing Peaker Emission Reduction Rule compliance plans and determined that reliability needs will occur on the New York City system in 2023, grow by 2025, and cannot be solely addressed by renewables and energy storage. At best, this bill would create uncertainty in the current evaluation of solutions for the 2023 reliability need and, at worst, exacerbate the reliability needs identified on the system post-2025.

Finally, this bill is not needed. Generation from existing power plants inevitably will be displaced as new renewable resources come online. Over time, as renewable generation and energy storage become dominant sources of energy but not capacity, the few remaining peakers that exist likely will be called upon less and less for energy, thereby reducing emissions from those units but increasing their capacity value. There is no need to remove critical infrastructure that already plays, and will increasingly play, a minor role in contributing to statewide greenhouse gas emissions while at the same time providing important insurance against a major power system reliability crisis.

For the reasons stated above, IPPNY opposes A.6251-B (Carroll) similar to S.4378-B (Brisport).

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