The New York State Build Public Renewables Act. “We could see, for instance, federal money going to states so that they could set one up themselves so that they can build out public renewable energy in their states, bring down the cost, make it accountable to the people, and bring down energy poverty at the same time.”
Dharna Noor 5/13/21, Gizmodo Link: 24 Two years ago, New York enshrined the most ambitious statewide climate targets in the country. The legislation, called the Climate Leadership and Community Protection Act, requires the state to completely decarbonize its electric grid by 2040 and reduce emissions from all sectors by 85% within the following decade. A bill that’s currently gaining support in the New York legislature could set the state back on track to meet its goals. (The path has been bumpy, particularly because the state legislators haven’t come up with a payment plan for the CLCPA.) It hinges on the idea that the best way to decarbonize the state’s energy system is to make it publicly owned and democratically controlled. A new report from the policy tank climate + community project shared exclusively with Earther lays out exactly how it works, and shows that it could be a model for the rest of the country.
“As long as energy is treated as a commodity like any other, poor people, workers, and communities of color will suffer,” said Rep. Jamaal Bowman of New York, who is a champion of the legislation. “Our energy and power systems must be accountable to the public so that we can build an equitable future, in New York and nationwide, free of corporate exploitation.”
The measure, called the New York State Build Public Renewables Act, has dozens of co-sponsors and is supported by the Public Power Coalition and local environmental justice organizations. It would essentially create a public option for electricity. To do so, it would expand the New York Power Authority, empowering it to build out utility-scale renewable energy generation and transmission infrastructure and requiring it to supply only renewable power.
NYPA is the largest state-owned energy provider in the U.S. It currently owns and operates one-third of New York’s high voltage power lines and provides up to 25% of the state’s electricity, the majority of which comes from hydropower.
Under the bill, NYPA would be required to fully decarbonize its existing energy infrastructure, decommissioning its fossil fuel plants by 2025 while rapidly increasing the state’s renewable energy generation. (The report proposes that the entity would have the right of first refusal for all renewable energy projects greater than 25 megawatts in the state.)
In addition to supplying power directly to customers who choose to opt-in, NYPA would also have to ensure that all publicly owned buildings—to which it is the sole provider of energy—run on 100% clean power by 2025.
As it does all this, it would also be required to adhere to strict labor standards and unionization for all its projects, and also to partner with worker-owned cooperatives and small businesses owned by members of disadvantaged communities to procure necessary equipment and appliances. The law would also forbid the entity from shutting off power for unpaid bills.
That NYPA is publicly owned and operated is important for two reasons. For one, as a state entity, it’s directly governable, unlike investor-owned utilities.
“We want to embark on an energy transition that is simultaneously rapid, equitable, and thorough. We want the energy system to be fully decarbonized, we want it to be maximally equitable, and we also want it to happen in less than 10 years,” said Thea Riofrancos, an associate professor of political science at Providence College and co-author of the new report. “In the private sector, the way to do that is to create incentives for investments and to regulate. With the public sector, it’s much more direct. You can ensure it happens.”
Unlike investor-owned utilities, which maximize money for their shareholders, NYPA also has no profit motive. That would make it easier to ensure that the utility bills of low-income households stay low and that communities see the benefits of an energy transition.
“With NYPA, they don’t have always to go the cheapest option or choose actions that will make the most money,” said Johanna Bozuwa, co-manager of the climate and energy program at the Democracy Collaborative and co-author of the report. “They are held to the standard of the public interest. That means that, for instance, instead of putting transmission through a place that may be cheapest but might have pretty significant environmental impacts, we can actually shift that framework because it’s not a profit motive that we’re going for.”
To ensure that it operates in an equitable manner, the report suggests that the law could come with a number of measures to boost democratic control. The authors suggest the state could create a multi-stakeholder board with seats for longtime environmental justice leaders or labor organizers who have a say in NYPA’s actions. They also propose that NYPA create community engagement hubs where residents can learn about new renewable energy plans and work opportunities and provide input on where new energy projects are sited.
The report estimates that the comprehensive proposals would create up to 51,000 jobs—including 16,000 permanent ones—and between $48.6 billion and $93.5 billion of additional economic activity. It could also serve as a model for the rest of the country.
In the state of Nebraska, for instance, the electricity sector consists entirely of public power districts, publicly owned utilities, and energy cooperatives. The state could implement a similarly ambitious timeline to move the grid to 100% renewables. The federally owned Tennessee Valley Authority, which sells energy to 150 companies as well as utilities, could also take up a similar project.
If the bill passes and is successful, Bozuwa also said it could help show that the U.S. needs more public entities to control electricity—and that there’s no reason we can’t create them.
“We could see, for instance, federal money going to states so that they could set one up themselves so that they can build out public renewable energy in their states, bring down the cost, make it accountable to the people, and bring down energy poverty at the same time,” she said. “It’s exciting to think of how we could take NYPA as this state-based entity, take the principles that guide it, put it through a rapid energy transition, and use the federal level to unleash similar types of entities across the U.S.”
The Biden administration could use the New York bill’s model, Riofrancos added, to ensure that it meets the goals it has set since taking the White House, including the promise to decarbonize the grid by 2035 and ensure “40% of the overall benefits of relevant federal investments” meet the needs of communities who have borne the worst brunt of the climate crisis and pollution.
“By using a public institution … you can directly ensure that projects and jobs are sited in the places that deserve them most, where working class and racialized communities have been the most impacted by not only the climate crisis but also the pandemic and economic recession,” said Riofrancos.
Through the power of the public sector, the U.S. has achieved massive energy goals quickly before. During the New Deal, for instance, President Franklin Roosevelt created the Rural Electric Cooperative system.
“It actually was able to bring lights on within 10 years,” said Bozuwa. “So we don’t need to create sticks and carrots for the private energy sector. We’re saying to the private sector, we’re going to outflank you, we’re going to make sure we transition the public sector faster than you ever would.” By Dharna Noor, Staff writer, Earther
A new era of public power: A vision for New York Power Authority in pursuit of climate justice
by Johanna Bozuwa, Thea Riofrancos, Sarah Knuth, Patrick Robbins, Suzy Baker, A.L. McCullough, Kira McDonald, Chelsea Mackin, Daniel Aldana Cohen, Billy Fleming, Nick Graetz, and Neilay Shah.May 10, 2021EXPANDING DEMOCRATIC OWNERSHIPTRANSITIONING TO ECOLOGICAL SUSTAINABILITY
In 2019, New York State lawmakers passed the most ambitious state-level climate legislation in the country—and among the most ambitious in the world. The Climate Leadership and Community Protection Act (CLCPA) mandates that New York’s electricity sector become greenhouse-gas-emission-free by 2040 and achieve an 85% reduction in all emissions by 2050.
Crucially, it also establishes that 35%–40% of the investment-led benefits to decarbonizing the state’s energy system go directly towards disadvantaged communities, which have borne the social, environmental, and public health costs of the fossil fuel energy system, the climate crisis, and economic insecurity. This report proposes that the New York Power Authority (NYPA)—the largest state-owned energy provider in the United States—play a key role in implementing this ambitious, and equitable, climate plan.
A New Era of Public Power: A vision for New York Power Authority in pursuit of climate justice shows that NYPA is uniquely positioned to carry out CLCPA mandates in alignment with the rapid and just decarbonization goals of the law. NYPA’s public ownership structure also opens up new and more equitable financing opportunities for the entire state. Furthermore, because it is a publicly owned energy provider, its activities can be democratically accountable to New Yorkers, particularly those historically burdened by the impacts of energy infrastructure and climate crisis.
As both the owners and customers of NYPA, New Yorkers have the opportunity to demand, build, and benefit from a more democratic and equitable energy system. The NYPA energy transition investments proposed in this report could create somewhere between 28,410 and 51,133 total direct and indirect jobs and between $48.6 billion and $93.5 billion of additional economic activity by 2030.
Why NYPA can lead on equitable decarbonization
- Fewer profit incentives: As a nonprofit entity, NYPA has incentives that are not driven by the focus on quarterly earnings statements and shareholder value that dictates the behavior of private utilities and independent power producers (IPPs). This means NYPA can consider additional sources of value and benefits in designing its goals, strategies, and structure. It also enables NYPA to be a supportive partner in reducing energy consumption through efficiency gains—something largely antithetical to the private utility business model—and creating transparent, mutually beneficial relationships with community partners. Any revenues generated by NYPA can be reinvested into the grid, lowering customer bills, or in other economic development projects throughout the state that create jobs and wealth in disadvantaged communities.
- Coordination with the state: Instead of attempting to induce better behavior from private utilities and producers through complex and costly incentives and regulations, the state can leverage its own power via NYPA to quickly and effectively implement the CLCPA. There is also the possibility to create efficient partnerships with other governmental agencies, especially NYSERDA (New York State Energy Research and Development Authority) and the Office of Renewable Energy Siting (ORES).
- Democratizing energy: Because it is a public entity owned by and accountable to New Yorkers, there are more opportunities to mold NYPA into a more democratic institution than a private company would allow. Legally, NYPA is already held to statewide standards of open meeting laws, freedom of information, prevailing wage laws, and more. Robust democratic reforms, including heightened accountability, transparency, and stakeholder participation standards, would help ensure that the CLCPA’s 40% benefits standard is realized in New York’s disadvantaged communities.
- Cheap and equitable financing: NYPA’s standing as a public institution means that it has access to the municipal bond market, lowering the cost of capital and the price of electricity compared to private companies. This access to cheap capital, combined with the lack of a profit-maximization incentive and a mandate to prioritize disadvantaged communities, should allow NYPA to increase its investment in a host of decarbonizing strategies without significantly raising costs for communities. These features also distinguish NYPA from NYSERDA, which has provided necessary financial resources but is funded in large part via a line item on consumers’ utility bills.
For NYPA to realize its full potential to achieve the CLCPA timeline and equity goals, this report proposes that New York should:
- Ban for-profit energy service companies and make NYPA a public option energy provider. Right now, NYPA is limited in terms of who they can provide energy to in the state. NYPA should be empowered to provide energy to end-use consumers in the state as well as towns with Community Choice Aggregation (CCAs). The state should also ban the use of for-profit Energy Service Companies (ESCOs), transitioning those customers to NYPA as their energy provider. Eliminating for-profit ESCOs would both eliminate predatory operators in the state and replace them with publicly owned power production that has clear mandates for renewable energy. Additionally, NYPA could act as an alternative energy provider, with progressive rate structures that support low-income households. For a truly just and competitive energy market in the state, New Yorkers deserve a public option for electricity.
- Expand NYPA’s development of renewable energy and phase out fossil fuels. The state should establish mandates for NYPA to fully decarbonize its existing energy infrastructure, and decommission its fossil fuel plants by 2025. NYPA should be given the “right of first refusal” for all renewable projects over 25 megawatts to give the public more agency in the renewables scale-up process. This would ensure that utility-scale projects in the state are deployed with high levels of community participation, and strong labor, environmental, and community benefit standards. It would guarantee that benefits of the new infrastructure reach disinvested communities, creating between 75,750 and 34,700 total jobs and between $15.0 billion and $59.8 billion in additional economic activity between now and 2030. Moreover, by investing in distributed renewable energy, NYPA will help build up climate resiliency in the state, build close ties with residents, and lower bills for users. The state simply cannot meet the 35–40% benefit standard of the CLCPA without such a provision.
- Expand efficiency and electrification efforts. NYPA has already positioned itself as a major player in both efficiency and electrification efforts. NYPA should accelerate its efficiency programming, with a particular focus on supporting low-income housing to alleviate energy poverty. This could create 16,425 sustained jobs between now and 2030, and an economic impact of $25.3 billion in additional economic activity. Historically, NYPA has used bulk purchasing power to lower energy costs from appliances in low-income housing—a strategy that could be used again to lower efficiency and electrification costs. NYPA should also expand its transportation electrification programming for a more comprehensive transition to electrified transport infrastructure.
- Invest in equitable transmission and storage infrastructure. Because NYPA is a major transmission actor, its continued investment in public transmission infrastructure will be key to connecting upstate renewables to downstate residents, while also curtailing unnecessary transmission buildouts. NYPA should also maintain its existing energy storage infrastructure while promoting just sourcing of new grid-scale battery projects.
- Increase democracy in NYPA. Its expanded role in the energy ecosystem of New York also comes with significant responsibility. The enterprise should be held to high standards of transparency, accountability, equity, and participation. Any changes at NYPA should come with structural reforms that reflect New York’s commitment to disadvantaged communities and workers. NYPA should shift its utility board structure towards a multi-stakeholder model, including representation from community and labor groups. Specifically, it ought to create an Office of Community Engagement, co-hosted with NYSERDA, to coordinate transparency, community input, and accountability. To reflect differing regional needs, Regional Hubs could operate as conveners of job opportunities, community review, and more. Structural reforms not only would reflect New York’s commitment to environmental justice communities and workers but would strengthen NYPA by building grassroots support.
- Set high labor standards for green jobs in New York. The transition towards a renewable energy economy will take a massive commitment and has the potential to create a huge number of jobs in New York. Expanding NYPA’s role in that transition could create new baselines for the renewable energy sector—where salaries need to be raised, and avenues to unionization encouraged, to appeal to workers with unionized jobs in the fossil fuel sector. It can do so by requiring high-level labor standards and unionization for projects, lifting up small, women-owned, and minority-owned businesses; and accelerating the cooperative and social enterprise economy in the state. By being intentional about project development, NYPA can be an anchor for positive forms of economic development in disadvantaged and environmental justice communities via workforce training, pathways to unionized employment, and clear community benefits and project labor agreements.
Ultimately, by prioritizing equity and environmental justice, NYPA will recreate a New York that is not only more livable, but also more sustainable looking forward into the future. NYPA plays a monumental role in simultaneously mitigating and adapting to the climate crisis in New York State, while serving as a model for public power authorities in other states that might also follow NYPA’s bold example. Download and read now: New-Era-of-Public-Power-NYPA-FINAL.pdf
