Presented by Community Offshore Wind: Delivered every Monday by 10 a.m., New York & New Jersey Energy is your guide to the week’s top energy news and policy in Albany and Trenton.
Oct 28, 2024 View in browser
 
POLITICO Weekly NY & NJ Energy Logo

By Marie J. French and Ry Rivard

Presented by 

Community Offshore Wind

Good morning and welcome to the weekly Monday edition of the New York & New Jersey Energy newsletter. We'll take a look at the week ahead and look back on what you may have missed last week.

QUICK FIX

EV TRUCK RULE HITS ROADBLOCK — POLITICO’s Alex Nieves and Ry Rivard: Blue states backing the electric truck transition are getting cold feet. New Jersey — one of the 10 states that follows California’s rules to transform the heavy-duty trucking sector — is contemplating giving truck manufacturers a break from having to sell electric models.

“The state is just not ready,” said New Jersey Senate Transportation Chair Patrick Diegnan, who introduced a bill this week that would delay the start of New Jersey’s zero emission sales mandate by two years amid concerns that there aren’t enough electric trucks or chargers.

New Jersey isn’t an outlier.

Regulators in Oregon, Massachusetts and New York are all considering slowing down portions of California’s regulations, which are designed to increase the number of electric trucks on the road — and offer cleaner diesel engines for trucking companies that can’t afford electric models.

No place is the tension clearer than in New Jersey, home to one of the nation’s busiest stretches of highway for trucks: A Democratic governor and congressional delegation are pushing for a clean truck future, while legislative Democrats are unsure it’s here.

At the same time that state lawmakers were pushing a delay, New Jersey Rep. Frank Pallone this week joined Biden officials in the Garden State along the I-95 corridor to tout $250 million in Inflation Reduction Act funding for electric truck charging stations.

The two dozen charging stops, to be built between Maryland and Connecticut, are meant to be a “testament to the lasting impact” of President Joe Biden’s signature climate spending package, said Pallone, the ranking Democrat on the House Energy and Commerce Committee.

— Supporters of the rule are pushing back against any kind of delay: “If you look at the rule it provides for a slow ramp up and flexibility for the truck owners, which is in line with the pace of development we’re seeing today,” said Pam Frank, CEO ChargeEVC, which is a pro-EV industry group.

— Right now, Frank said there are no charging stations in New Jersey meant to quickly charge a long-haul heavy truck in New Jersey, but the federal government and the state utility board are working to provide money to install more chargers. Plus, many trucks can use standard EV car charges.

ICYMI: PJM MULLS AUCTION DELAY — POLITICO’s Catherine Morehouse: The nation’s largest power market proposed to delay its planned December capacity market auction as it faces rising turmoil over the dramatic price spikes recorded at its last auction that critics contended were caused by skewed market rules.

In a notice sent to members of the 13-state PJM Interconnection on Thursday, the grid operator said it “will be supporting a delay” of its next capacity auction as it waits for FERC’s response to a complaint filed by environmental groups arguing PJM could have avoided a surge in prices at its previous auction that pushed up prices billions of dollars. The groups further allege that by not fixing its rules, market prices could rise as much as $15 billion in costs over the next three auctions.

HAPPY MONDAY MORNING: Let us know if you have tips, story ideas or life advice. We're always here at mfrench@politico.com and rrivard@politico.com. And if you like this letter, please tell a friend and/or loved one to sign up.

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Around New York

— Gov. Kathy Hochul and state officials discussed the possibility of siting a small, advanced nuclear plant at Fort Drum in August, a local TV station reports. Local congressional representatives are pushing for the Army to place a small reactor there.

— Rivian EVs for Amazon take to the streets in the Albany area.

— An advanced manufacturing business park in western New York, known as STAMP, is instead attracting … data center proposals.

— Long Island key to state’s energy transition, officials say.

Around New Jersey

— Holtec sues former executives after settling criminal probe.

Here's what we're watching this week:

MONDAY

— MTA committees begin meeting, 9 a.m.

TUESDAY

— Gov. Phil Murphy speaks at American Clean Power’s offshore wind power conference in Atlantic City, 8:20 a.m.

— Environmental advocates attend a hearing in state Supreme Court about Greenidge’s cryptocurrency mining plant, 10 a.m., Yates County Supreme & County Court, 415 Liberty St., Penn Yan.

WEDNESDAY

— The MTA board meets,9 a.m.

— The New Jersey Board of Public Utilities holds a special meeting to consider state utility companies’ state-mandated energy efficiency programs at 12:30 p.m. The utilities proposed rate increases ranging from under 1 percent to over 5 percent to pay for the programs.

 

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What you may have missed

ENERGY USERS GATHER: New York’s policymakers want to cast a broad net to lessen the blow of charging for emissions for companies that use significant amounts of energy and are exposed to trade pressures, they said Thursday. But much is still up in the air. A coalition of large energy users that includes the state’s university system, Wegmans and several upstate manufacturers gathered in Saratoga on Thursday and got an update — of sorts — on the state’s “cap and invest” policy.

One of the issues officials are working through, as they continue to promise draft regulations by the end of this year for the cap-and-trade style program, is how to define the “energy intensive and trade exposed” industries that will get free allowances. Companies will have to meet both criteria, said NYSERDA’s Vlad Gutman-Britten.

“For a very long time, the great majority of the costs of compliance for [these industries] will be offset,” he said. He said the state wants to take a “protective and cautious” approach and cast a wide net to define these companies.

“We’ll know much more in the future about how the program is impacting households, how it is affecting businesses and there will be time for adjustments,” Gutman-Britten said. “We want to be very cautious because there are clear trade-offs between the benefits provided to business and industrial folks in the state of New York and household impacts.”

Another pressing question for business leaders making long-term plans is when “cap and invest” may begin. State officials have said they want to see the program start in 2025. But with draft regulations not expected until later this year and a lengthy public comment period stretching into 2025, there’s not much clarity on the timeline.

“It could play out in a couple of ways,” said Mike Sheehan, assistant director of the division of air resources at DEC. He said it would be difficult for the state to start the compliance period, during which allowances have to be purchased, while the public comment period is ongoing. The state is assessing options, Sheehan said.

The Citizens Budget Commission is pushing for a more detailed analysis of the impacts of the “cap and invest” program on households and industries. More information is expected when the draft regulations are released, a NYSERDA spokesperson said. The current price ceiling contemplated would not achieve the state’s goals, absent significant additional policies.

“Our pursuit of those targets in the long term is a multifaceted strategy,” Gutman-Britten said.

CBC thinks the 2030 target needs to be reconsidered. Multiple intervenors have pushed for the state to reconsider its 2030 renewable electricity target, as well.

During the conference Thursday, Gavin Donohue of Independent Power Producers of New York Inc., which represents power plants including fossil fuel, nuclear and renewables, also urged changes. “We need to look at the dates,” he said. “We need to look at the law and see if its really realistic.” The Business Council of New York State is also pushing for changes to the law.

Gov. Kathy Hochul’s deputy secretary for energy John O’Leary said there has been progress on the climate law’s targets, pointing to a completed offshore wind project, under construction transmission line, build-out of distributed solar and other signals.

“The climate act has its targets … and as the governor says again and again, the state is seriously committed to achieving these goals,” O’Leary said. He invited input from the large energy users as the administration crafts its 2025 agenda that will seek to balance affordability and economic development priorities amid the clean energy transition. — Marie J. French

ENERGY EFFICIENCY: The New Jersey Board of Public Utilities is holding a special meeting on Oct. 30 to consider state-mandated three-year energy efficiency programs for PSE&G, Atlantic City Electric Company, Jersey Central Power & Light, Rockland Electric Company, South Jersey Gas, Elizabethtown Gas and New Jersey Natural Gas.

Utility spending could increase by billions of dollars across the state, with the expectation that more efficient energy use will ultimately offset the relatively small rate increases on customers’ bills. But the potential approval comes amid increased attention by lawmakers on incremental rate increases that have added up to higher and higher bills. The higher rates from these programs would pay for demand response, decarbonization and other efficiency projects. — Ry Rivard

TRAIN TOURPOLITICO's Ry Rivard: Amtrak and New Jersey Transit have not yet gotten to the bottom of problems with their trains and tracks that upended commutes this summer, causing massive headaches and political blowback. That means problems could crop up again next summer. And the summer after that.

That was the frustrating takeaway from a Wednesday tour that five members of New Jersey’s congressional delegation took on a special train from New York Penn Station to New Brunswick, New Jersey.

“I don’t think anybody feels like we are at the point where we can say to you today that we have a plan for next summer,” Rep. Mikie Sherrill told reporters outside the New Brunswick train station.

This summer saw the worst month of performance on New Jersey Transit, which operates along tracks owned by Amtrak, since Democratic New Jersey Gov. Phil Murphy took office in 2018.

BUDGET WATCHDOG BACKS CLIMATE LAW CHANGES— POLITICO’s Marie J. French: A prominent business-aligned budget watchdog said in a report Wednesday morning that New York won’t be able to achieve its 2030 emissions goals — and needs to reconsider key parts of the state’s climate law. The Citizens Budget Commission wants Gov. Kathy Hochul’s administration and lawmakers to weaken the 2030 goal to slash emissions 40 percent from 1990 levels and change how emissions are counted under the landmark climate law. 

“I don't think this is a mystery. Looking how far away we are from our renewable goals, which are obviously tied to the emission reduction goals — and we're not going to meet it,” said Andrew Rein, president of the Citizens Budget Commission.

Overall, as of 2021, the state had only reduced emissions 10 percent from the 1990 baseline.

Why it matters: CBC released a report Wednesday focused on Hochul’s flagship “cap and invest” proposal, which would charge companies for emissions and then invest the proceeds into clean energy programs and rebates to consumers who would see higher gas prices and energy bills.

Hochul’s administration is considering a cap on the price charged for emissions, but implementing such a cap would mean the state won’t achieve its climate goals without putting additional policies in place. That has alarmed environmental advocates and has led Rein to the conclusion that the state won’t be able to achieve the 2030 goals.

CBC has concerns about the affordability of the program as currently proposed and even more so if it were designed to achieve the 2030 target. Instead, the group wants the state to change the target so the cap-and-trade style program would be more effective and less costly. They’re also pushing for more detailed estimates of the program’s cost on households and businesses.

MTA BUDGET GAPS ARE BACK — MTA’s budget gaps are back, according to a new report from New York State Comptroller Thomas DiNapoli.

“A year ago, the MTA was looking forward to a period of solid fiscal health, but its financial condition has quickly turned from stable back to uncertain,” DiNapoli said in a statement.

There are several problems, the comptroller’s office found, including paid ridership that has not rebound as quickly as expected since the pandemic. About half the people who ride buses are not paying fares and real estate-related tax revenues are below projections.

According to the report , released Wednesday morning, a budget gap of over $200 million could start this year and increase to more than $650 million by 2028. These gaps could end up being much larger — $3 billion in 2028 — if fare evasion continues running rampant, revenue expected from casinos is delayed and other macroeconomic factors turn against the MTA.

These woes , which affect the $19 billion annual operating budget, are related to other gaps in the MTA’s multi-year infrastructure budget. Gov. Kathy Hochul put a giant hole in the current five-year capital plan when she announced a “pause” on the money-making congestion pricing plan, which would have begun collecting enough tolls this summer to pay for $15 billion in repairs and upgrades. Instead, without the money, the MTA is going to have to suck several hundred million dollars a year out of its operating budget to pay for maintenance and borrowing-related costs.

A year ago, fixing the MTA’s problems was one of Hochul’s major accomplishments. Now, the MTA’s problems are another one of her many headaches. — Ry Rivard

BREAKING WIND NEWS —POLITICO’s Matt Friedman: According to a poll of 616 New Jersey voters by the William J. Hughes Center for Public Policy at Stockton University, just 17 percent said a candidate’s views on offshore wind energy would influence their vote a “great deal,” compared with 41 percent who said it would influence it “somewhat,” and 37 percent who said it would not affect their vote. “No matter which side of the issue voters land on, they seem to agree that it’s not a top priority,” said Hughes Center Research Director Alyssa Maurice. “The opposition to offshore wind is particularly vocal and well-organized in New Jersey, but the poll shows that for most voters this issue doesn’t move the needle much.”

CON ED BUS PILOT: The state’s largest utility has inked a deal with a bus company to fund a dozen electric school buses in Brooklyn. Con Edison signed an agreement with First Student, a leading school transportation company, last week to provide $9 million from ratepayers to support the buses that will have solar panels on top and be able to supply power back into the electric grid. They’ll replace diesel buses and charge at a depot with a 500-kilowatt solar array and a 2-megawatt battery.

First Student hails the project as a “vehicle-to-everything” project with managed charging and the ability to supply electric capacity when electric demand peaks and potentially a backup power supply for emergency services. “Harnessing electricity from First Student electric school bus batteries to create an emissions-free smart energy hub that can serve a community during peak demand while turbocharging America’s fight against climate change is truly revolutionary,” said First Student CEO and President John Kenning. The company has more than 1,800 vehicles in New York City. The Brooklyn site is also getting $720,000 from NYSERDA vouchers for 6 retrofit electric buses. First Student has gotten federal and state funding for electrifying 102 buses in six other school districts in New York state.

Con Ed also sees the project as a chance to get additional data about the operations of electric school buses as the state and city press toward electrification goals. New York state requires all school buses purchased to be electric in 2027, with some waivers, to support electrifying the entire fleet by 2035. — Marie J. French

NEW YORK OFFSHORE WIND FIELD NARROWS — POLITICO’s Marie J. French: New York state is now down to three options in its latest attempt to secure offshore wind projects that would help it meet its renewable energy goals. Attentive Energy, an offshore wind developer, last month submitted a project backed by French energy giant TotalEnergies, New York City fossil fuel plant owner Rise Light and Power, and Corio Generation. The developer has now withdrawn its bid, said Damian Bednarz, managing director of Attentive Energy.

“Attentive Energy commends the State’s steadfast support of offshore wind and will continue to evaluate market conditions and future opportunities as they arise,” Bednarz said in a statement. “As Attentive Energy continues to advance opportunities from our lease area, we remain committed to deploying offshore wind and contributing toward our region’s shared economic and environmental goals.” The withdrawal of the project leaves New York with fewer options to achieve its near-term renewable energy targets as it carries out a fifth procurement process. None of the proposed projects are expected to be fully online by the 2030 deadline for the state to get 70 percent of its electricity from renewables.

 

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