On August 27, 2021, Justice Peter Lynch of the New York State Supreme Court, Albany County issued the first substantive ruling in Town of Copake v. New York State Office of Renewable Energy Siting, No. 905502-21 (Sup. Ct. Albany Cty. Aug. 27, 2021), a lawsuit challenging the validity of regulations promulgated by the New York State Office of Renewable Energy Siting (ORES). Specifically, in a brief order, the Court denied the petitioners’ request for a temporary restraining order and ordered argument on whether the petitioners are entitled to a preliminary injunction. Oral argument is scheduled for September 8, 2021.
Earlier this year, as part of the New York State budget, the Legislature enacted New York State Real Property Tax Law Section 575-b (RPTL 575-b), which creates new requirements for the real property taxation of wind and solar energy projects that have a nameplate capacity of 1 megawatt (MW) or greater. These new requirements are applicable to projects that are not subject to a payment in lieu of taxes (PILOT) agreement and, notwithstanding these statutory changes, municipalities will continue to have the flexibility to enter into PILOT agreements with project proponents. Municipalities are likely, however, to look to the new requirements for guidance when negotiating such PILOT agreements.
New York State continues to supercharge the deployment of renewable energy projects. Building on landmark legislation passed in 2019, New York State’s newly created Office of Renewable Energy Siting (ORES) has now finalized the regulations that will govern siting and permitting of large-scale renewable energy projects greater than 25 MW; projects between 20 and 25MW have the option of proceeding under Article 10 of the Public Service Law or the ORES process. The regulations create a clear glide path that replaces the lengthy and cumbersome process previously established under Article 10. With these new procedures in place, developers can expect a 60-day shot clock for ORES to make a completeness determination, and a 12-month deadline for ORES to issue a final decision on a siting permit to promote cost-effective and efficient development that aligns with New York State’s commitment to fully decarbonize its electric sector by 2040. Continue Reading New York State Office of Renewable Energy Siting Streamlines and Expedites Deployment of Large-Scale Renewables
In an order issued on February 11, 2021, the New York State Public Service Commission (“Commission”) established a “host community benefit program” through which owners of large-scale renewable energy facilities (25 MW+) would pay $500/MW (for solar) or $1,000/MW (for wind) each year for the first 10 years of project operation to be distributed equally among all residential utility customers residing in the municipality where the facility would be located. See Case 20-E-0249, In the Matter of a Renewable Energy Facility Host Community Benefit Program, Order Adopting a Host Community Benefit Program (issued Feb. 11, 2021) (“Host Community Benefit Program Order”). Such benefits would complement—not replace—the numerous other benefits that renewable projects bring to local communities through payment in lieu of taxes (“PILOT”) agreements and other community agreements that fund local programs and initiatives. Continue Reading New York State Public Service Commission Establishes Host Community Benefit Program
On the evening of December 21, 2020, Congress provided a last-minute boost for clean energy projects and technology by passing a $1.4 trillion federal spending bill together with a $900 billion COVID-19 relief package. According to Senator Lisa Murkowski, Chair of the Senate Energy and Natural Resources Committee, “[the bill] represents the first modernization of our nation’s energy policies in well over a decade.” In particular, the bill’s clean energy provisions include: Continue Reading A Big Day for Clean Energy: $1.4 Trillion Federal Spending Package Extends Tax Credits and Provides Research Funding for Clean Energy Projects and Technology
The Accelerated Renewable Energy Growth and Community Benefit Act (“Accelerator Act”) was enacted to speed up the siting and construction of major renewable energy projects in New York State. One of the key components of the Accelerator Act was the creation of the Office of Renewable Energy Siting (ORES) within the New York State Department of State to address, in large part, many of the shortcomings of New York State’s existing Article 10 siting process. At the statutory level, ORES is intended to improve and streamline the process for cost-effective siting of large-scale renewable energy in a timely fashion in order to achieve the State’s aggressive renewable energy targets. Of course, the details would be fleshed out in regulations required to be promulgated within a year of the Act’s passage. Continue Reading New York State’s Office of Renewable Energy Siting Draft Regulations Out for Public Comment
On August 20, 2020, the New York State Supreme Court, Appellate Division, Fourth Department issued a decision in Cornell University v. Board of Assessment Review (“Cornell University”), finding that a solar photovoltaic system is taxable real property. See No. CA 19-00339, slip op. 04636, 2020 WL 4876486 (4th Dep’t Aug. 20, 2020). This decision settled, at least in the Fourth Department, a real property tax question long considered—and feared—by solar developers. Although this decision has the potential for significant impacts on solar development projects throughout New York State, it may be possible to mitigate the financial impact of this tax burden with careful planning and mindful project decisions. Continue Reading Solar Photovoltaic Systems Are Taxable Real Property: Fourth Department Decision Requires Consideration in Early Project Development
On May 14, 2020, the New York State Public Service Commission (“Commission”) issued an order that will mark a turning point in the State’s electric grid modernization efforts (“Transmission Planning Order”). The Transmission Planning Order was issued in response to the recently enacted Accelerated Renewable Energy Growth and Community Benefit Act (“Accelerate Act”), which was signed into law on April 3, 2020, as previously reported in Phillips Lytle’s Energy Client Alert. The Accelerate Act directs the Commission to conduct a comprehensive study (“Power Grid Study”) to identify distribution, transmission and bulk investments to facilitate timely achievement of New York State’s nation-leading clean energy objectives set forth in the Community Leadership and Community Protection Act (CLCPA). Upon completion of the Power Grid Study, the Accelerate Act directs the Commission to establish utility-specific capital plans to support the development and implementation of appropriate electric system upgrades. Continue Reading New York State Public Service Commission Accelerates Grid Modernization Efforts
The New York State Public Service Commission (“Commission”) leveraged an unprecedented interpretation of its “just and reasonable” regulatory authority to impose drastic changes to the retail energy marketplace, which will have ripple effects on Renewable Energy Credit (REC) markets, retail energy contracts, Distributed Energy Resource (DER) providers and other clean technology stakeholders. The Commission’s Order Adopting Changes to the Retail Access Energy Market (“Order”) establishes enhanced eligibility criteria for Energy Service Companies (ESCOs), mandates price caps on ESCO products, severely limits the type of value-added products and services ESCOs can provide to customers, and mandates granular transparency of energy product information on utility bills. By March 11, 2020, all ESCOs must file revised eligibility applications detailing how they will comply with the Order or risk immediate suspension. For insights into what this Order may mean for the future of retail energy markets and DER products in New York State, please see our latest Client Alert.
Since the New York State Public Service Commission (“Commission”) first authorized the Community Distributed Generation (CDG) program in 2015, CDG Sponsors—the entities that organize, own and/or operate CDG projects—have faced an uphill battle in explaining the program, marketing it to customers and streamlining the energy billing process. The confusion arises first and foremost because CDG customers currently receive only bill credits, not renewable electricity or the environmental attributes of that electricity. This is further complicated by the fact that credits are typically denominated on the bill in kilowatt hours and are allocated in a cumbersome manner, whereby the utility first applies credits to a customer’s utility bill, but then the customer separately pays for a portion of those credits at a discounted rate (the “CDG Savings Rate”) to a third party – the CDG Sponsor – through a second bill. In addition to creating market confusion, this two-step process imposes unnecessary customer management and billing costs. Continue Reading New York State Public Service Commission Modernizes Community Solar Billing Procedures