park-wind-farm-3704939_640-150x150-5886927Upstate 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. 

You may also like

82 Questions Hochul’s Pandemic Report Should Answer

This is the month when New Yorkers are due to finally receive an official report on the state's response to the Covid-19 pandemic, one of the deadliest disasters in state history. T Read More

Upstate Catches A Big Break As Offshore Wind Deals Sink

The cancellation of planned offshore wind projects has sparked considerable heartburn and hand-wringing among lawmakers, activists and politically wired businesses and unions, but it’s been good news for the upstate families and businesses who would be paying more than half the cost. For them, each year of delays on scotched projects amounts to future electric-bill savings of upwards of $1 billion—and gives Albany another chance to find a better, less expensive way to go green. Read More

New Jersey’s Pandemic Report Shines Harsh Light on a New York Scandal

A recently published independent review of New Jersey's pandemic response holds lessons for New York on at least two levels. First, it marked the only serious attempt by any state t Read More

Hochul’s ‘Straight Talk’ on Medicaid Isn’t Straight Enough

Arguably the biggest Medicaid news in Governor Hochul's budget presentation was about the current fiscal year, not the next one: The state-run health plan is running substantially over budget. Read More

Albany’s Green Machine Goes Rogue

Upstate electricity customers today got what seemed like good news when Equinor pulled the plug on its Empire Wind 2 (EW2) offshore wind project, one of several being funded by New York customers as far away as Buffalo and Plattsburgh. The announcement however is mainly theater, because Equinor looks poised to squeeze even more money from ratepayers—in a manner that should have state lawmakers deeply concerned about how little control they’ve retained over state renewable energy spending. Read More

DeRosa Is Still Hiding the Truth About Cuomo’s Pandemic Response

As the long-time top aide to former Governor Andrew Cuomo, Melissa DeRosa ought to have useful information to share about the state's pandemic response – especially about what went wrong and how the state could be better Read More

One Brooklyn Health’s Money Troubles Raise a Billion-Dollar Question

A brewing fiscal crisis at One Brooklyn Health, which has received more than $1 billion in turnaround funding from the state, raises the question of whether that money has been well spent. Read More

Another battery flop zaps NY taxpayers

Plans to lure a Canadian battery company to the Hudson Valley with a slew of government incentives, including job-creation tax credits, loans, and federal subsidies, appear to be a dud. It’s a reminder that when it comes to picking winners in the energy-storage space, taxpayers are often losers. Read More