On October 27, 2021, the New York State Department of Environmental Conservation (NYSDEC) denied two applications for proposed natural gas-fired power plants.^[1] New York State has denied permit applications for fossil fuel infrastructure before,^[2] but these were the first denials that relied on a state law mandating reductions in CO₂ emissions in the power sector.^[3]

In July 2019, the New York state legislature passed the Climate Leadership and Community Protection Act, which mandates that state electricity generation come from 70% zero-emissions sources by 2030 and 100% zero-emissions sources by 2040.^[4] While these targets went further on decarbonizing the power sector than even California, stakeholders expressed trepidation even as the bill was signed, with one policy analyst saying, “This is complicated stuff…we throw around terms like megawatts and gigawatts and the average member of the public might not understand these things.”^[5]

The question of how state regulators will implement emissions reductions or decarbonization targets always looms large in the wake of a newly enacted state clean energy standard or emissions reduction target. In such cases, regulators often have multiple mandates from the legislature. Utility regulators, for example, must ensure grid reliability as well as reasonable rates for utility customers.^[6] Climate targets aside, the lights have to stay on, and supply must always meet demand. This is particularly true when a state has already suffered large-scale blackouts emanating from natural disasters.^[7]

New York has been a flashpoint for this concern, and not just because of the aggressiveness of the state’s emissions reductions targets. After years of advocacy from local politicians and stakeholders, Entergy and State Regulators agreed to close the Indian Point Energy Center in 2017.^[8] There were numerous environmental quality and public safety-related reasons to close Indian Point,^[9] but the plant supplied 12% of New York’s power needs without any CO₂ emissions.^[10]

This is precisely why the proposal of new natural gas generation infrastructure, Danskammer in particular, drew harsh criticisms from Hudson Valley environmental activists.^[11] How could New York decarbonize electricity in the state, when the State could potentially bring more fossil fuel generation onto its grid?

NYSDEC’s rejection of new natural gas generation infrastructure put this question to bed, and the agency’s justification for the decision tells the full story. The agency noted in its notice of rejection that Section 7(2) of the Climate Act required it to consider whether permitting the Danskammer project would be inconsistent with attainment of the emissions reduction targets required by the Act.^[12] If they were to approve the project that interfered with the goals of the Act, the agency would be required to give a detailed explanation as to why.^[13]

Proponents of Danskammer attempted to rely on the fossil fuel industry’s tried and true argumentative principle: reliability.^[14] They argued that since  renewable energy resources vary in how much electricity they generate. New York will need a certain amount of baseload to keep the grid running, which should be generated by burning natural gas. However, the NYSDEC noted in its rejection letter that no publicly available study analyzing New York’s grid through 2030 showed any reliability deficiency.^[15] It was also of no help to Danskammer’s case that one day the plant could use clean hydrogen instead of natural gas. The NYSDEC noted that the future of hydrogen markets (indeed, whether they will be carbon free at all) remains uncertain.^[16] NYSDEC’s rejection on climate grounds sends a clear signal to generation project developers: proposals to build new fossil assets will be looked upon with great skepticism.

The future of New York’s electricity generation mix remains somewhat unclear. The State continues to pursue offshore wind projects off the coast of Long Island.^[17] A transmission line from Canada that would import hydropower into the state also remains a possibility.^[18] Nevertheless, New York has made clear that it will respect the will of its citizens, who overwhelmingly favor steep emissions reductions in the power sector. To that end, the state will not tolerate industry’s unwillingness to partner with regulators in meeting the state’s demand for renewable energy.

 

**Disclosure: Steve Brenner, this article’s author, worked as a staffer for Congresswoman Nita Lowey, one of the legislators who made calls for the closure of the Indian Point Energy Center, from 2017-2020.

 

[1] Marie J. French, New York denies gas plant permits in first-ever decision citing climate law, POLITICO (Oct. 27, 2021), https://www.politico.com/states/new-york/city-hall/story/2021/10/27/hochul-administration-denies-permits-for-two-gas-plants-under-new-climate-law-1392062.

[2] See Const. Pipeline Co., LLC v. New York State Dep’t of Env’t Conservation, 868 F.3d 87 (2d Cir. 2017). The Second Circuit upheld the NYSDEC’s decision to reject Constitution Pipeline Company, LLC’s application for certification under section 401 of the Clean Water Act because the company’s proposed natural gas pipeline did not comply with New York State water quality standards.

[3] French, supra note 1.

[4] 2019 N.Y. SB 6599; See also N.Y. State, Climate change is a reality. New York is fighting it., https://climate.ny.gov/ (last visited Oct. 28, 2021).

[5]Karen DeWitt, Gov. Cuomo Signs “Aggressive” Anti-Climate Change Bill Amid Praise, Reservations, WAER (Jul. 19, 2019), https://www.waer.org/environment-science/2019-07-19/gov-cuomo-signs-aggressive-anti-climate-change-bill-amid-praise-reservations (“The law was widely praised by environmental groups, who say the ultimate success or failure of the law depends on the details of how the goals are met.”).

[6] Julia Eagles, Public Utility Commissions – The Most Important Regulators You’ve Never Heard Of, Institute for Market Transformation (Nov. 18, 2020), https://www.imt.org/public-utility-commissions-the-most-important-regulators-youve-never-heard-of/.

[7] Michael Gold, Power Outages Hit Manhattan and Queens, N.Y. Tɪᴍᴇs (Aug. 7, 2021), https://www.nytimes.com/2020/08/07/nyregion/queens-manhattan-west-side-power-outage-coned.html.

[8] Energy Information Agency, Indian Point, closest nuclear plant to New York City, set to retire by 2021, (Feb. 21, 2017) https://www.eia.gov/todayinenergy/detail.php?id=29772; see also Patrick McGeehan, Indian Point Is Shutting Down. That Means More Fossil Fuel. N.Y. Times (Apr. 13, 2021), https://www.nytimes.com/2021/04/12/nyregion/indian-point-power-plant-closing.html.

[9] Cliff Weathers, Indian Point is finally closing. Let’s all move on., The Journal News (Apr. 28, 2020), https://www.lohud.com/story/opinion/2020/04/28/indian-point-finally-closing-lets-move-on/3035796001/ (noting that Indian Point had experienced numerous technical malfunctions (including oil spills) and had been cited by the Nuclear Regulatory Commission in 2011 as the nuclear plant in America most likely to suffer a meltdown in the event of an earthquake).

[10] Energy Information Agency, supra note 8.

[11] Chris Bellovary, Danskammer: Make your voice heard on Sept. 28 & 29, Riverkeeper (Sept. 7, 2021),https://www.riverkeeper.org/blogs/clean-energy/danskammer-make-your-voice-heard-on-march-31/. Danskammer was proposed to be located in Newburgh, NY, roughly 25 miles from Indian Point.

[12] See Danskammer Energy, LLC (Oct. 27, 2021), https://www.dec.ny.gov/docs/administration_pdf/danskammer10272021.pdfat 2.

[13] Id.

[14] Myths & Facts, Dᴀɴsᴋᴀᴍᴍᴇʀ, LLC (Dec. 2, 2019), https://www.danskammerenergy.com/wp-content/uploads/2020/09/Danskammer-Myth-Fact-Trifold-FINAL-12.2.19.pdf (“MYTH: The New York Independent System Operator says there will be no reliability issues when Indian Point Closes. FACT: NYISO’s Power Trends Report states that replacement resources will be needed in the Lower Hudson Valley. Danskammer is needed to run today, and NYISO is counting on the plan to continue running.”).

[15]See Danskammer Energy, LLC (Oct. 27, 2021), https://www.dec.ny.gov/docs/administration_pdf/danskammer10272021.pdfat 13.

[16] See id. at 10.

[17] See Offshore Wind Projects, NYSERDA,  https://www.nyserda.ny.gov/All-Programs/Programs/Offshore-Wind/Focus-Areas/NY-Offshore-Wind-Projects (last visited Oct. 28, 2021).

[18] Geoff Dembicki, NYC Plans to Import Canadian Hydropower. Who Really Benefits?, Nᴇᴡ Yᴏʀᴋ Fᴏᴄᴜs (Jan. 15, 2021), https://www.nysfocus.com/2021/01/15/nyc-hydropower-first-nations/.