Challenge looms for N.Y.’s clean energy standard

By Saqib Rahim | 08/24/2016 07:00 AM EDT

New York state has received the first legal challenge to the clean energy standard (CES) it passed earlier this month.

This story was updated at 9:33 a.m. EDT.

New York state has received the first legal challenge to the clean energy standard (CES) it passed earlier this month.

Lawyers for Ampersand Hydro LLC, which controls 12 small hydropower stations in New York, have asked regulators for a rehearing on procedural grounds. The document entered the official record this morning, marking the first formal challenge to the CES by opponents.


The New York Public Service Commission confirmed the CES, a plan to get half the state’s power from renewable energy by 2030, this month. Under the plan, three nuclear plants would receive subsidies through 2029. Regulators said this was necessary to keep the state from switching to natural gas, which would raise greenhouse gas emissions on net.

Ampersand said small hydropower should get the same subsidy. It said the PSC violated state administrative law by giving nuclear an unfair advantage and failing to explain why small hydropower didn’t get the subsidy.

"The CES Order erred by failing to develop a rational and reasonable implementation plan that would enable all renewable and zero-emission resources, including small hydro generation facilities, to economically survive," the petition said.

The PSC approved the CES on Aug. 1. The vote was 3-0, with one abstention. The aggressive 50 percent target drew applause from some environmental groups.

But the program’s ambition, along with its controversial nuclear component, has also aroused opposition. Advocates for business, natural gas, manufacturing and independent power have all raised objections. Some said the CES would raise power prices too much. Others said the state should switch to a fuel-neutral strategy, instead of supporting nuclear (EnergyWire, Aug. 19).

Equal treatment sought

Few were expecting a challenge from the hydropower industry. But Ampersand’s filing said small hydropower deserves the same subsidy that nuclear power gets. Like nuclear, it’s a zero-carbon resource. Like nuclear, Ampersand said, it has installations at risk of closing because they don’t make enough money.

"The unexplained preference in the CES Order for one type of renewable and zero-emission generation resource over other competing resources with similar characteristics is contrary to New York laws," the petition said. "An unexplained sharp departure from the Commission’s prior orders supporting a competitive electricity market is per se arbitrary and capricious under New York administrative law."

The CES has a section that requires new renewable generation. Another section is meant to retain existing renewables. The third "tier" includes the nuclear subsidy.

That setup may result in a bizarre outcome — renewable energy companies challenging a policy meant to encourage their product.

"Some comments in response to the July staff proposal suggested to us that advocates for other non-GHG-emitting electricity generating resources may wish to contend that they are unfairly left out of the nuclear zero emissions credit program and should qualify for the same or comparable ZEC due to similar environmental attributes," Timothy Fox, vice president at ClearView Energy Partners LLC, said by email.

"It’s a pretty good deal for these nukes, right?" said Tyson Slocum, director of Public Citizen’s energy program. "Any competing generator that isn’t as well politically connected as these guys, they’re going to be upset."

Exelon asks for clarification

Other parties have until the end of the month to ask the PSC for a rehearing. They also can file suit with the New York Supreme Court, although the court will likely want to see that a party tried at the PSC first. Finally, parties can object to the CES with the Federal Energy Regulatory Commission.

Exelon Corp., which is trying to become the owner of all three nuclear plants eligible for the subsidy, has asked regulators to clarify the CES. On Monday, it said it wanted to know what happens to the subsidies if it fails to buy the James A. FitzPatrick nuclear facility from Entergy Corp. (EnergyWire, Aug. 23).

"It is simply a procedural matter," the Department of Public Service, the PSC’s staff arm, said in an emailed statement to EnergyWire yesterday.

The next step is to take public comments on Exelon’s petition. Then the PSC will make a decision on it.

"Exelon’s petition will not slow nor have any other effect on the regulatory process to transfer the FitzPatrick nuclear facility to Exelon," the statement said. "What may or may not happen if the deal does not go through would be speculative at this point."