New York government watchdogs raised alarms over the state’s plans to pay for new offshore wind turbines to generate electricity declaring upstate residents would end up footing the bill for downstate power.
“Fifty-three percent of the people who are going to be paying for these turbines aren’t going to benefit from them,” said Ken Girardin, policy analyst at the Empire Center. “That is to say 53-percent of the money is going to come from rate payers north of New York City, in upstate.”
In July, Governor Andrew Cuomo unveiled a new order from the state Public Service Commission (PSC) for the construction of wind turbine towers capable of generating 800 megawatts of electricity in the Atlantic Ocean south of Long Island and east of New York City.
The project, he announced, was intended to “jump start” the development of offshore wind power. Cuomo’s “50 by 30” initiative seeks to derive 50-percent of the state’s electricity from renewable sources by the year 2030.
“We are not going to stop until we reach 100-percent renewable because that is what a sustainable New York is really all about,“ the governor declared during his announcement.
“This is politically motivated energy policy. It’s not being guided by any good science,” Girardin countered.
Analysis by the Empire Center focused on the cost of wind generated electricity, offshore wind energy in particular.
“There is a contingent in the green energy community that really romanticizes these offshore wind turbines that have been built in Europe,” Girardin said. “They are the single most expensive type of renewable energy. Power coming from offshore wind costs about four times what power generated now by conventional means costs.“
Because added cost can make wind power harder to sell into the electric grid, state and federal subsidies have long propped up wind power providers enabling them to sell their electricity at a loss.
Those subsidies have been collected from utility customers in their bills.
The PSC letter launching the Long Island turbine project announced the availability of its own subsidy, “Offshore Wind Renewable Energy Credits,” to support the project. And it specified that “every” state electric utility, or “load serving entity” “shall invest in new offshore renewable generation resources,” meaning every electric consumer in the state would contribute to the funding of the project, even though the project was only meant to generate electricity for New York City and Long Island.
”The governor’s plan to pay for this is to make rate payers across the state, in Buffalo, in Rochester, in Syracuse, pay extra on their electric bills to generate the money to pay for these wind turbines,” said Girardin.
Based on likely construction costs and market rates for electricity, calculations by the Empire Center put the cost to upstate New York utility customers alone at $4.3-billion over 20 years for the wind turbine project.
A statement from the PSC insisted that upstate New York had actually seen the majority of recent renewable energy development and said, “all New Yorkers will benefit from a more diverse and resilient energy system that also combats climate change.”
The statement also said “introducing a new, cost-effective energy source into the statewide grid will not only provide significant statewide environmental benefits, it will stimulate an emerging industry, creating thousands of new jobs across New York.”
Materials from the Cuomo administration’s press office quoted supporters like Lisa Dix from the Sierra Club saying, “[r]apidly advancing offshore wind is not only necessary to achieve the Governor’s bold climate goals but is critical to making New York a renewable energy economic powerhouse.”
But Girardin warned that, for all the pain higher electric bills might cause homeowners, the plan for higher electric rates could do the most damage to the state’s economy.
“For places such as big businesses or hospitals, that have large electricity bills, you’re going to be looking at an annual cost in the thousands, if not tens of thousands of dollars, directly as a result of this mandate,” he said. “So, it won’t just hurt regular ratepayers in their pocketbooks. It’s going to be one more negative impact on the upstate economy.”
The funding plan drew criticism from Rochester area state Senator Rich Funke who declared in a statement, “no taxpayer in Upstate New York should be responsible for paying for a project that will primarily benefit residents of New York City and Long Island.”
Funke also took issue with the plan’s use of special charges levied by the PSC to raise its funding rather than the normal legislative budgeting process.
“I support renewable energy,” he continued, “but I do not support the Governor bypassing the legislature to impose yet another tax on hardworking New Yorkers.”
The PSC’s plan did not spell out how much the wind turbine proposal would cost rate payers but specified that utilities should present their proposed contracts to handle the offshore renewable energy credits by March of 2019.
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