NY Commission Approves Contracts for Champlain Hudson Power Express, Clean Path Transmission Projects

The New York State Public Service Commission has approved contracts with Clean Path New York LLC for its Clean Path NY project, and H.Q. Energy Services Inc. for its Champlain Hudson Power Express project, to deliver clean, renewable solar, wind and hydroelectric power from upstate New York and Canada to New York City.

The state's renewable energy and transmission projects are expected to deliver up to US$5.8 billion in overall societal benefits statewide, including greenhouse gas reductions and air quality improvements, and US$8.2 billion in economic development across the state, including investments in disadvantaged communities. Further, when built these projects will help protect against volatile fossil fuel price fluctuations and stabilize long-term energy costs.

As the largest transmission projects contracted for New York State in the last 50 years, these projects will reduce the city's reliance on fossil fuel-fired generation by more than 50% in 2030. The announcement accelerates progress to exceed New York State's goal for 70% of the state's electricity to come from renewable sources by 2030 on the path to a zero-emission grid by 2040 as outlined in the Climate Leadership and Community Protection Act.

The decision was bolstered by the City of New York's confirmation that it will join in these landmark awards by agreeing to purchase a portion of the renewable attributes generated by the two projects, thus helping to make the scale of these projects possible while creating the opportunity to reduce the cost impact of these projects by up to US$ 1.7 billion to all other ratepayers.

The NYS Office of General Services has also committed to entering into a contract with the New York State Energy Research and Development Authority (NYSERDA) for Tier 4 RECs associated with the energy used by State agencies and departments located in the City. NYSERDA will also offer renewable attributes from these projects for voluntary purchase, finally enabling the many New York City organizations with interest in switching to clean energy, but who have been unable to do so on-site due to practical constraints, to go 100% renewable with confidence.

The government commitments and likely potential for additional private sector purchases are expected to significantly reduce the statewide utility ratepayer impact of implementing the CLCPA and Tier 4 program.

The PSC’s October 2020 order adopted a Tier 4 program as part of the PSC’s Clean Energy Standard with the purpose of increasing the penetration of renewables into New York City, and directed NYSERDA to conduct a Tier 4 solicitation. In Jan. 2021, NYSERDA issued a Tier 4 renewable energy solicitation seeking projects that can cost effectively and responsibly deliver renewable energy to New York City, an area of the state that relies on aging fossil fuel-fired generation.

The selected projects are expected to deliver 18 million MWh of clean energy per year, or more than a third of New York City's annual electric consumption, from a diverse and resilient clean generation portfolio including onshore wind, solar, and hydroelectric power, backed by energy storage, from upstate New York and Quebec. Combining these projects with the existing contracted portfolio of offshore wind projects connecting directly into New York City, turns the page on the City's energy history, increasing resilience and reliability while significantly improving air quality.

With approval of the contracts, NYSERDA payments will commence for each respective project once the project has obtained all required permits and approvals, has completed construction, and is delivering power to New York City, which is expected to begin in 2025 for the fully permitted CHPE project and 2027 for the CPNY project.

“The decision by the Public Service Commission is a game-changer for New York’s transition away from fossil fuels and helps to ensure New York City, the nation’s most populated city, will be powered with clean and reliable renewable energy." said Doreen M. Harris, president and CEO, NYSERDA. "These transformational projects pave the way for cleaner air and a healthier future for all New Yorkers, especially in communities disproportionately burdened by air pollution, and will stimulate our statewide economy with an investment of $8.2 billion in economic development and create thousands of high-quality jobs. We look forward to working with our partners at Clean Path NY and Hydro Quebec to deliver these critical benefits for families and businesses across the state.”

As a component of these landmark deals, Hydro-Quebec will purchase electricity from the planned Apuiat wind farm, developed by the Innu communities in Quebec, as well as enter into a partnership with the Mohawk Council of Kahnawà:ke for joint ownership of the line in Québec that will connect to the Champlain Hudson Power Express.

NYSERDA's successful procurement resulted in the award of projects that bring the highest and best value to New York, including promoting the interests of disadvantaged communities, ensuring economic benefits accrue to the State, and promoting workforce development. Key benefits of these projects include:

• Protecting New York Families: The projects will deliver up to US$2.8 billion in public health benefits resulting from reduced exposure to harmful pollutants – including avoided premature deaths, reduced asthma-related hospital visits, and lost workdays due to illness.
• Massive Economic Driver and Job Creator: The projects will create approximately 10,000 family-sustaining jobs statewide with US$ 8.2 billion in economic development investments, helping accelerate the state's economic recovery from COVID-19. The project developers have also committed to prevailing wage and project labor agreements to ensure quality, good-paying jobs for New Yorkers.
• Developer-Committed Investments in Disadvantaged Communities: The two projects committed to investing a combined US$ 460 million in community benefit funds to create pathways to green energy jobs, support public health, advance capital improvement projects, realize habitat restoration and improve the environmental footprint of buildings in disadvantaged communities.
• Environmental Protection: Combined, the projects are expected to reduce greenhouse gas emissions by 77 million metric tons over the next 15 years, the equivalent of taking one million cars off the road over this time period.
• Cost Effective: The two Tier 4 approved contracts combined will result in significant societal benefits up to US$ 5.8 billion. The contracts include an index REC structure to help cushion customers against spikes in energy prices so when electricity prices rise the Tier 4 program costs go down. The average statewide bill impact for the typical residential customer will be approximately 3 percent, or US$ 3 per month beginning once the projects are in operation.

In addition, these new underground transmission lines will avoid, minimize, and mitigate environmental damages including impacts on sensitive species and habitats and be resilient in the face of extreme weather. Both projects are required to go through the PSC's Article VII permitting process, which includes a full review of the need for the project and any environmental impacts of the siting, design, construction, and operation of major transmission facilities in New York State. CHPE has received its Article VII permit, and CPNY will begin the process.

The CPNY and CHPE projects will add to New York's existing robust pipeline of large-scale renewable energy, composed of nearly 100 solar, land-based wind, and offshore wind projects totaling 11,000MW of clean power — enough to power over five million New York homes when completed.

The state's commitment to building out new green energy transmission, led by 250 miles of new major upgrades already underway throughout the State and reinforced by this award, will allow the current pipeline of renewables to power more than 60 percent of New York's electricity from renewable energy once operational.