New Governor’s Budget Unlocks Some $1.4 billion For Clean Energy Projects Across New York State

KATONAH, N.Y. -- In an unheralded portion of the Executive Budget, state leaders significantly expanded the ability of The New York Power Authority (NYPA) to supply clean electricity to residents by allowing NYPA to finance new renewable generation projects for qualifying municipalities, far more inexpensively than has been developed to date.

Responsive to concerns from the NY Legislature that engaging this agency would atrophy the private markets, the new authority provided within in the Executive Budget (Executive Budget, Section S1508/A2008, Parts kk & ll) was designed specifically to stimulate the growth and diversity of the private market by requiring NYPA to support extant market participants, in preference to a unilateral and fully integrated market role for the agency.

The authorization will seed development by providing highly competitive capital to wind, hydro and solar developers. This capital will only be available to support power plants that serve residents in municipalities that have activated specific home-rule authority, through a mechanism titled Community Choice Aggregation (CCA).

As a result, communities that pass a CCA local law will now be able to contract for lower-cost renewable power for their residents and small businesses. NYPA's cost of capital is so much lower than what has previously been offered to the market, that these "CCA communities" will gain terms for their residents unavailable elsewhere. CCA community residents are slated to gain access to new, inexpensive local renewable power. This will create critical support for meeting New York State's target of 30% renewable generation by 2030.

Mike Gordon, CEO of Joule Assets and founder of Community Choice Aggregation for NY State, comments, "We are delighted by this legislation. It creates amazing opportunity to take a quantum leap in the development of new clean generation resources. It will not only cleanse the power supply, it will drive local economies with unparalleled near-term development, that will spawn vibrant new industries. By our calculation, it will feed the development of the clean generation market, with a potential for an excess of $1.4 billion of construction around the State, in the next eighteen- to twenty-four months."

The governor's new budget also authorizes NYPA to facilitate and finance other community owned clean energy initiatives, such as storage, micro-grids, energy efficiency upgrades, etc.

Mike Gordon continues, "Ubiquitous local ownership of the financial products that fund and access fair and transparent percentages of this new infrastructure will be within municipal leaders' grasp—the clout in every one of these developments will be in local leaders' hands."

Though it has escaped substantial media attention, the measure has attracted deep interest throughout the State. Before the legislation was passed, 158 of NY State's 1,607 municipalities contacted Joule Assets, as a center of expertise, for further information concerning the potential of the initiative. In excess of 20 key environmental groups worked together to ensure passage of the measures.

The legislation explicitly authorizes the construction of six large new renewable power plants, providing 400 MWs of supply as well as an unlimited number of smaller (<25 MW) renewable power plants throughout the state.

Further information on the legislation and on how each community may access the capabilities connected with it, is available through Glenn Weinberg ( gweinberg@jouleassets.com or at 646.785.7204)