Upstate electricity customers could shell out more than $1 billion to cover the state’s initial round of subsidies for offshore wind turbines, the Cuomo administration’s energy agency has now revealed.
Documents filed today by the New York State Energy Research and Development Authority (NYSERDA) with the state Public Service Commission place the total pricetag on the subsidies as high as $2.2 billion (in 2018 dollars), essentially by promising to pay the operators about double the current wholesale price of electricity on Long Island and New York City for a 25-year period.
Those subsidies will be collected using the PSC’s rate-setting powers, as electric utilities and large electric customers are forced to buy offshore wind renewable energy credits (ORECs) commensurate with the amount of energy they handle on the state’s grid. That funding mechanism means utility customers as far away as Buffalo and Plattsburgh have to chip in—and more than half the funds will come from electricity customers north of New York City.
(Electricity companies, by the way, are prohibited from showing the cost of these subsidies on customer bills).
The awards cover less than 20 percent of the 9,000 megawatts of wind turbines the state is slated to subsidize under the Climate Leadership and Community Protection Act signed in July–meaning upstaters can expect to be tapped again in the next few years.
The costs of these turbines, which Governor Andrew Cuomo says are necessary to reduce the state’s carbon emissions, were needlessly inflated by the Cuomo administration’s insistence that contractors use union labor, abide by the state’s Section 220 “prevailing wage” and by the state’s decision to restrict bidding to just a handful of companies that already hold leases in the Atlantic Ocean.
The Cuomo administration, meanwhile, has blocked less expensive forms of renewable energy (namely most Canadian hydro) from competing for state subsidies.
About the Author
You may also like
NYSERDA’s Roadmap to Nowhere
New York school districts face a multi-billion dollar unfunded mandate to convert to electric school buses. While the transition will cost between $8 and $15 billion above the cost of buying traditional buses, less than $1 billion in state and federal aid is likely to be available to help schools cover the cost. Read More
New Wind Energy Costs Blow the Doors Off Projections
The myth that New York can replace fossil fuel power plants with cheap renewable energy has begun to crumble under renewable developers’ demands for higher prices to offset inflation and supply chain challenges. Read More
Renewable Solar Comes with Recurring Waste Costs
Within 25 years New York will find itself trying to manage the disposal of five million or more waste solar panels every year. Read More
First Annual CLCPA Report Indicates High Costs, Low Benefits
A major deception on emissions reductions lies at the heart of the New York Department of Public Service’s first annual report on implementation of the Climate Leadership and Community Protection Act. Read More
Micron vs. New York Energy Policy
Computer chip manufacturer Micron has revealed that by the 2040s its Onondaga County factories are going to be sucking up enough electricity to power New Hampshire and Vermont combined. Read More
Beware of Medicaid’s Spending Swings
The state's Medicaid spending is becoming increasingly volatile from month to mo Read More
Offshore Wind Lulls Threaten NY Energy Reliability
The volatility of wind off the Atlantic coast will challenge New York's ability to keep the lights on according to a recent analysis from the New York State Reliability Corporation. Read More
Unlikely Pair Tries to Blow Open Secret Wind Deal
Offshore wind developers, citing changing market conditions, are demanding what could be billions of dollars in additional subsidies—but refusing to let the public see how much or explain their reasoning. Read More
Enjoying our work? Sign up for email alerts on our latest news and research.