Memorandum in Opposition – A.6251 (Carroll) / S.4378-A (Brisport)

A.6251 (Carroll) / S.4378-A (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 (Carroll) / S.4378-A (Brisport). This legislation could have major negative consequences for electric system reliability. The bill would require owners and operators of a peaker plant located in, or adjacent to, an environmental justice community to submit a compliance plan at the time of renewal of a Title V air permit from the 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 environmental justice communities is important and so is maintaining electric system reliability. Recent 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 (Carroll) / S.4378-A (Brisport) essentially would require the replacement of peakers ahead of the timeline under the CLCPA. This bill would result in power outages due to a lack of dispatchable power supply during multi-day stretches of extreme hot and cold weather, especially in New York City, creating a public health and safety problem.

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.

Further, the legislation includes neither a provision to maintain electric system reliably after the ten-year period specified in the bill, nor a plan to evaluate how to pay for the intended replacements. The bill should include a provision to allow for a comprehensive study for all peakers, in order to ensure informed decision-making.

Additionally, the bill inappropriately raises the possibility that the New York Power Authority (NYPA) would assume ownership of the peakers in order to help replace them. During the enacted State Budget of 2019, the Legislature decided that NYPA should continue its competitive procurement of new energy supply and should not get into the business of building or owning new generating facilities, including renewable ones. NYPA should not own new generating facilities, given that one of the main benefits of competitive wholesale electricity markets is to protect ratepayers from the risk of power plant investments; having NYPA own new facilities re-exposes ratepayers to that risk. Also, no one can compete with NYPA, who not only has access to ratepayers for its cost recovery, but also has the ability to finance its projects with its bonds that are backed by ratepayers.

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 becomes a dominant source of energy, the existing peakers likely will be called upon less and less; emissions from those units will continue to decline. There is no need to remove critical infrastructure that will play an increasingly 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 (Carroll) / S.4378-A (Brisport).

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