Hochul to target limiting gas system expansion, transmission siting

January 11, 2024

Originally published by Politico. Written by Marie J. French.

ALBANY, N.Y. — Gov. Kathy Hochul wants to curtail the expansion of the state’s gas system and align utility rules with the state’s climate law.

Hochul plans to embrace portions of a major environmental priority focused on natural gas utilities as part of her State of the State on Tuesday, according to a copy of her plan obtained by POLITICO.

The governor isn’t backing all portions of a Senate-backed gas transition measure dubbed “ NY HEAT,” but her opening salvo signals the issue is likely to be a top item in budget negotiations.

The governor is also proposing a statewide community solar program for utility customers receiving bill assistance; new efforts by utility regulators to harness smart meters and plan for virtual power plants; and a revamp of the state’s siting process for transmission projects.

“With bold actions to deploy renewable energy swiftly and transition away from fossil fuels, we are not only charting the course for a cleaner and healthier New York State, but we are making important changes that will reduce costs for our most vulnerable New Yorkers,” Hochul said in a statement.

Gas transition proposal

While precise details will have to wait for Hochul’s budget plan Jan. 16, the governor will endorse in her speech an end to the “100 foot rule” that requires other customers to subsidize new gas hookups and the “obligation to serve.”

But will not be a complete prohibition on new gas hookups and may not go as far as the legislative proposal on the issue.

The “Affordable Gas Transition Act,” will “not impact the safe and reliable provision of service to existing customers,” the State of the State book says.

The proposal gives the Public Service Commission the authority to start a proceeding to explore how clean technologies like thermal networks can provide neighborhood-scale solutions and ensure gas customers can have affordable, adequate solutions, according to the governor’s office.

The measure will not include a major priority for environmental groups pushing the legislative NY HEAT bill: a 6 percent of income cap on utility bills for low- and moderate-income residents.

instead, Hochul would direct state agencies to prioritize energy affordability for customers that electrify for heating.

Siting changes target transmission

The Democratic governor also wants to tackle siting transmission, as POLITICO previously reported.

She’s proposing to move the Office of Renewable Energy Siting, currently within the Department of State, under the purview of the Department of Public Service and set up a streamlined process for siting transmission lines.

Hochul won’t propose to move large-scale storage under the purview of ORES, according to the governor’s office.

The New York League of Conservation Voters is supportive of transmission initiative.

“Transmission takes longer than we have time for,” the group’s president Julie Tighe said.

Sen. Kevin Parker, chair of the Energy Committee, said that ORES’ performance thus far has “underwhelmed.” But he noted that the Department of State had to build a new office and add staff for it. He’s open to the idea of expanding the office’s responsibilities and moving it within the administration if it will speed things up.

A transmission project can take up to two years to permit, according to the governor’s office. Larger lines with more complex environmental impacts have often taken longer and typically return to regulators for revisions.

The measure will be dubbed the “Renewable Action Through Project Interconnection and Deployment” or “RAPID” Act.

Details, however, will be key because environmental groups and other state agencies are typically involved in the siting process under Article 7 for transmission projects. Former Gov. Andrew Cuomo had also crafted a new process to expedite transmission along existing rights-of-way as part of the 2020 budget.

Hochul will direct the Department of Public Service to launch a new process aimed at improving interconnections for distributed energy resources like small-scale solar and storage.

“The proceeding will consider incentives, penalties, and other mechanisms for New York State utilities to facilitate faster and more efficient interconnection,” the State of the State book says. “This proceeding will ensure distribution utilities across New York are held accountable to their responsibilities to build out the clean energy grid of the future.”

Other executive actions

Hochul also wants to drastically expand a community solar program to benefit utility ratepayers that National Grid is getting off the ground in its upstate territory.

She wants the Public Service Commission to expand a new “Statewide Solar for All” program to give low-income customers enrolled in utility Energy Affordability Programs credits from community solar projects. This proposal was made by the Department of Public Service and is pending at the PSC. NYSERDA would procure the community solar projects.

The governor’s office estimated that bill savings could be $40 a year for the 800,000 low-income customers who’d benefit.

The governor also wants New York ratepayers to get benefits from time-of-use rates. She’s launching a “Smart Energy Savings Initiative” that she says will save EV owners $200 per year and those with heat pumps between $100 and $500 per year.

Hochul will also direct the Department of Public Service to start an “NY Grid of the Future” proceeding that will focus on flexible technologies like virtual power plants. A plan will be due by the end of the year “laying out clear targets for needed capabilities, required investments, and expected benefits and savings,” according to the State of the State book.