Green Energy Wall Coming Into Focus In New York? – Watts Up With That?

Francis Menton

It was back in 2021 that I started to ask which country or U.S. state would be the first to hit the “Green Energy Wall.” It has long been obvious to anyone who looks at the situation that the fantasy of a fully de-carbonized energy system, with everything run on electricity generated by intermittent wind and sun, could never happen.

But what would be the limiting condition that would put a stop to the madness? Would it be confronting the absurd costs of grid-scale battery storage? Or perhaps a string of blackouts caused by insufficient backup of the wind and solar generation?

Here in New York, we are starting to see some push back from politicians on the fantasy green energy transition, but the source may be the last thing you would have predicted. The immediate issue is the cost of upgrading local delivery infrastructure to transmit sufficient electricity for the imagined future of electrified buildings and vehicles.

Supposedly, under a statute known as the Climate Leadership and Community Protection Act of 2019, we are faced with a 2030 deadline to get some 70% of our electricity from “renewables.” Currently the percent of our electricity that we get from these “renewables” is around 44%, and almost half of that comes from the gigantic waterfall known as Niagara Falls. Without another Niagara Falls on the horizon, theoretically we should be building vast fields of wind turbines and solar panels to meet the statutory mandates; but that effort has stalled out, and the costs of wind and solar generation, and of backup to make the grid run all the time, have barely started to show up in consumer bills. Nor have various big new long-distance transmission projects yet come into consumer bills.

But meanwhile, the big utilities have come forward with large demands for rate increases. So why the need for big rate increases if not from new generators or long-distance transmission? The answer is that the rate increases mainly relate to the portion of the consumer bills referred to as the “delivery” charge, as opposed to the charge for generation. The utilities seek funds to add delivery infrastructure like substations, transformers, and cables to deliver vastly increased amounts of electricity for things like vehicle charging stations (for both cars and trucks) and for the electrification of building heat.

In upstate New York, a utility called National Grid has been petitioning the regulator for a large electricity rate increase, mostly to support these kinds of upgrades to the delivery infrastructure. The service territory of National Grid in upstate New York covers the region between about Syracuse and Albany, and from there North to the Canadian border. After prolonged negotiations, the regulator (Public Service Commission) and National Grid entered into a “settlement” a few days ago on August 14. Here is the PSC release describing the settlement. Basically, the PSC congratulates itself on beating back a much larger rate increase originally sought by National Grid. (The headline is “PSC Dramatically Reduces National Grid’s Rate Request.”). But if you read on you find that they still agreed to a very large increase. The release makes clear that most of the increase relates to the delivery infrastructure:

National Grid had sought a base delivery increase of $509.6 million (25.5 percent delivery or 10.4 percent total revenue) and $156.5 million (29.7 percent delivery or 15.7 percent total revenue) for electric and gas, respectively for one year. Instead, the Commission adopted a joint proposal establishing levelized increases, on a percentage basis, to the company’s electric revenues of $167.3 million in the first year, $297.4 million in the second year, and $243.4 million in the third year.

Basically, they spread NG’s requested increase out over three years; but it still comes to almost a 30% jump on the delivery side by the time it all kicks in.

Governor Hochul then issued a release expressing extreme displeasure:

While I appreciate that the New York Public Service Commission worked to significantly lower the outrageously high initial rate proposals, it’s still not enough. I have been crystal clear that utilities must make ratepayer affordability the priority.

Well, Governor Hochul, good luck trying to blame the utility, but you are the one with all the electric vehicle mandates and incentives and subsidies, thus calling on the utility to provide all this new infrastructure. In all likelihood few will ever buy the electric vehicles, and nobody will ever generate the extra electricity from wind and sun, and thus this infrastructure will mostly be wasted. But can the utility just refuse to make itself ready to meet your ridiculous mandate?

And meanwhile down here in New York City, our utility Con Edison is requesting almost as large a rate increase, again focused on the delivery portion of the bill, and on local infrastructure upgrades necessary to support increased electricity demand. In the City, the increased demand is anticipated to come both from electric vehicles (per the state mandates) and from building electrification (based on a City building electrification mandate known as Local Law 97). It is likely that the result of the Con Edison rate proceeding will be a settlement agreement comparable to what occurred in the National Grid case a few days ago.

I am an intervenor in this Con Edison rate case, and in recent days I have actually been personally participating — in a minor way — in the settlement negotiations. My co-intervenors and I are objecting to any rate increases based on adding infrastructure to support building and vehicle electrification unless and until the additional electricity generation capacity has been built to support these mandates. (There is no chance that this additional capacity, supposedly wind and solar generators, will actually be built.)

The New York Post has a lead editorial today summarizing how the green energy madness is coming around to bite New Yorkers in their pocketbooks. Excerpt:

New York’s state Public Service Commission just OK’d big National Grid rate increases that’ll hike many upstate utility bills by $600 a year — fueling outrage Democrats will soon feel. Downstate, Con Edison is seeking an 11.4% hike to electric bills and 13.3% gas hike — largely thanks to green-energy mandates that Gov. Kathy Hochul embraced along with the rest of the party. The “climate agenda” is delivering pain we’ve long warned of, in New York and New Jersey.

If we ever get to the point of building dozens of gigawatts of wind and solar generation capacity, and enough backup and storage to make them work to support a grid, that would cause electricity rates to multiply by a factor of five or ten or more. We are a long way from that. But here we are just trying to add enough substations and transformers to support 30-50% vehicle electrification, and a comparable amount of building electrification, and it is causing politicians to start to scream. How much more before of this will it take before we quit?

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