Co-op and condo boards were finally getting their minds around the concept of electrification — switching from fossil fuel- to electric-powered building systems to cut their buildings' carbon emissions and bring them in line with looming climate laws, especially Local Law 97. The switch was based on the premise that the city's electric grid would get greener as it weaned itself from fossil fuels and began relying on renewable energy sources such as solar, wind and geothermal.
Now the developers of those green energy sources, citing inflation, supply-chain bottlenecks and rising interest rates, say they need $12 billion in subsidies to their existing contracts in order for their projects to remain economically feasible. In a devastating blow, Crain's reports, the state Public Service Commission (PSC) has rejected bigger payments for four offshore wind and 86 onland renewable energy projects, which are set to deliver 25% of the state’s electricity needs projected for 2030.
State regulators’ rebuke means developers must now decide whether to advance or cancel contracts with the New York State Research and Development Authority, and it raises questions about the state's capacity to meet its climate goals. State law requires New York to draw 70% of its electricity from renewable sources by 2030 and shift entirely to renewable sources by 2040. New York City's Local Law 97 promotes these goals by establishing caps on building carbon emissions — the city's largest source of pollution — beginning in 2024.
“To the developers: We have a deal,” says PSC Chair Rory Christian. “By rejecting this relief, we signal to every vendor that our contracts, our commitments are worth the paper they are written on. We signal that ratepayer funds are not an unlimited piggy bank for anyone’s disposal.”
State officials estimated that the requested contract adjustments would have resulted in 10.5% higher monthly electric bills for commercial or industrial customers, and 6.7% more for residential customers.
Some environmental groups expressed dismay at the PSC's decision. “I think there could be a chilling effect,” says Julie Tighe, president of the New York League of Conservation Voters. “I'm very concerned about what the decision is going to be for offshore wind in particular because I think this could be potentially devastating for a nascent industry.”
Meanwhile, co-op and condo boards are faced with one more variable as they struggle to reduce their buildings' carbon emissions and avoid fines under Local Law 97.
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