State regulators are considering whether to allow utilities in New York to once again generate their own power.
The state forced utilities to sell off power plants in the 1990s to encourage more competition. Now, the companies say they want to generate wind and solar power to help meet the state’s climate goals and shore up the grid.
They claim that independent power companies have fallen short of meeting state targets, in part due to financial pressures and supply issues.
The Public Service Commission is weighing the change as it considers how to increase clean and renewable energy generation in New York. Utilities including Con Edison, National Grid and Avangrid-owned Rochester Gas and Electric and New York State Electric and Gas have filed comments supporting the change.
“To reliably and affordably meet New York’s rapidly growing energy needs, utility-owned generation must be part of a practical, all-of-the-above energy solution,” Con Edison spokesperson Elisabeth Ferrari said. “This type of reform would introduce greater oversight into the energy supply market, help address New York’s growing energy needs, and create market conditions leading to more renewable energy and lower, fairer prices for customers.”
National Grid spokesperson Wendy Frigeria similarly said utility ownership could be “one tool among many” for meeting the state’s clean energy and reliability goals, while preserving a role for private developers.
But experts say it’s unclear whether the utilities can deliver.
“Obviously, the utilities are putting forward the claim that it’ll lower costs, and the other side is saying that the utilities will just raise costs,” said Ari Peskoe, executive director of the Electricity Law Initiative at Harvard Law School. “A lot of this is about … who bears the risk from projects that don’t turn out the way the developer intended. And when utilities build projects, they put the risk on the public.”
The Public Service Commission has not put a timetable on its decision, but some groups aren’t taking any chances.
The Independent Power Producers of New York have launched a six-figure campaign to fight the potential change. They acknowledged the challenges of the past few years, but said the utilities don’t hold the solution.
“Ultimately, it’s bad for New Yorkers. It’s just going to cause delays in projects that need to be built in the state,” said Gavin Donohue, the group’s president and CEO. “We have an economic renaissance underway in the state, and we need more investments in the state, not less.”
Utilities could use affiliated companies that are not subject to state regulations to generate power, Donohue said, but they often choose not to.
He also questioned whether utilities have the expertise to build wind and solar facilities. The utility companies say otherwise, claiming in state filings that they already have those resources in place and can add specialized expertise, as needed.
A spokesperson for Avangrid said meeting future energy needs will require major investments in new power generation, including utility-owned projects and greater market transparency.
New York is not alone in this discussion, Peskoe said. Pennsylvania, Ohio, New Jersey and Illinois are just some of the other states where utilities are making a similar push.
Rosemary Misdary contributed reporting to this story.
This story has been updated with new information.