June 18, 2013
The Regional Greenhouse Gas Initiative (“RGGI”) raised a record $124.4 million in its June 5, 2013 carbon emissions auction, with the clearing price of emissions allowances reaching a three-year high of $3.21 per ton of carbon dioxide (“CO2”). The increase reflects expectations that the nine-state, cap-and-trade regime for power plant CO2 emissions will impose more stringent emissions limitations in 2014, as proposed earlier this year.
RGGI is the first market-based regulatory program in the United States aimed at reducing greenhouse gas emissions from power plants, originally established in 2005 by a Memorandum of Understanding between seven states in the Northeast and Mid-Atlantic regions. RGGI held its first carbon auction in September 2008, with emissions allowances selling for $3.07 per ton. Between 2010 and 2012, however, the combination of relatively modest emissions caps, reduced electricity demand due to the economic recession, and an increase in lower-carbon power generation spurred by low natural gas prices depressed the price of RGGI emissions allowances and raised questions about the future of the program.
In response to those trends, in February 2013 RGGI concluded a two-year program review with a series of proposed changes to the trading program, including a 45 percent reduction in the regional CO2 cap from 165 million tons in 2013 to 91 million tons in 2013. RGGI also released an Updated Model Rule implementing those proposed changes, which must be implemented by each RGGI state this year. After 2014, the RGGI cap is expected to decrease 2.5 percent each year from 2015 to 2020, requiring additional emissions reductions from regulated entities.
The next RGGI carbon emission allowance auction is schedule for September 4, 2013. For more information on RGGI and state and federal climate regulation, contact Jeffrey Gracer.
February 8, 2013
In an order dated January 16, 2013, Judge Eileen Rakower of the New York State Supreme Court dismissed an Article 78 petition challenging the Hudson River Park Trust’s lease of an easement for a portion of a natural gas pipeline entering Manhattan through Hudson River Park. The lease – along with the pipeline’s route into Manhattan – was challenged by several environmental groups and individuals, who argued that the Trust was required to conduct an environmental review under the State Environmental Quality Review Act (“SEQRA”) of the pipeline and its connection to Con Edison’s pipeline network. The petitioners also argued that leasing an easement beneath the Park violated the public trust doctrine and provisions of the Hudson River Park Act that restrict the uses to which certain areas of the Park may be put.
Judge Rakower first noted that the Federal Energy Regulatory Commission (“FERC”) had analyzed the environmental impacts of the proposed pipeline under the National Environmental Policy Act and issued an Environmental Impact Statement (“EIS”). That EIS concluded that the local pipeline connection to Con Edison’s network was outside of FERC’s jurisdiction, but nevertheless gave some consideration to the cumulative impacts of connection to Con Edison’s network. After issuing the EIS, FERC approved the route of the pipeline through Hudson River Park. The Trust then negotiated the challenged lease with the pipeline developer.
Judge Rakower concluded that, under the federal Natural Gas Act, FERC had exclusive jurisdiction over the siting of the pipeline, and that any challenges to the siting decision – or the Trust’s lease of the right-of-way through Hudson River Park in accord with that decision – must be brought in federal court. Judge Rakower also ruled that state-law environmental review of the pipeline under SEQRA was preempted by the Natural Gas Act. The court therefore dismissed the petition.
For more information on the Court’s decision, contact Elizabeth Knauer.
February 1, 2013
On January 9, Governor Andrew Cuomo delivered his 2013 State of the State Address and outlined several key policy initiatives to facilitate the increased deployment of solar power in New York. The address announced the governor’s intent to (1) extend the state’s NY-Sun solar program at $150 million annually for the next 10 years, (2) appoint a cabinet-level “energy czar” to coordinate the administration’s energy policy, and (3) create a $1 billion “NY Green Bank” to leverage public monies with private sector funds in order to increase investment in renewable energy projects in New York.
“The economy of tomorrow is the clean tech economy,” the governor observed in his address. “We all know it, it’s a foot race – whatever state, whatever region gets there first wins the prize, and we want it to be New York.”
The 2013 State of the State Report that accompanied the address provides further details. To start, the NY-Sun program, originally announced in Cuomo’s 2012 State of the State Address, is designed to increase the state’s solar generation capacity. To that end, NY-Sun has thus far taken the form of a variety of legislative and administrative policy measures, including tax credits, grants, and permitting reforms. NY-Sun presently is authorized through 2015; Cuomo proposes to extend the program’s present funding levels through 2023.
The governor has recruited Richard Kauffman to join his cabinet as the state’s new “energy czar.” Kauffman, whose formal title will be Chairman for Energy Policy and Finance for New York State, previously worked as senior advisor to U.S. Secretary of Energy Steven Chu, and is a leading expert on private sector investment in renewable energy.
Cuomo’s proposed NY Green Bank would “serve a coordinating role to enhance the collective strength of all State clean energy programs,” which together spend $1.4 billion annually. According to the report, the Green Bank would seek to move beyond these programs’ present reliance on “one-time subsidies” by using tools like “bonding, loans and various credit enhancements (e.g, loan loss reserves and guarantees)” to “leverag[e] private capital” and “catalyz[e] market activity.” As the report notes, Connecticut passed legislation creating a similar entity, the Clean Energy Finance and Investment Authority, in 2011.
Individuals and small businesses in New York can take advantage of the NY-Sun Initiative in several ways. For example, the New York State Energy Research and Development Authority (NYSERDA) administers the NY-Sun Competitive Photovoltaic Program, which provides grants supporting the development of qualifying photovoltaic projects. In 2013, NYSERDA will accept grant applications in two rounds, with deadlines of March 14th and August 29th. Additionally, the Long Island Power Authority (LIPA) recently initiated New York’s first feed-in tariff program, the Clean Solar Initiative Feed-In Tariff. Under this program, LIPA will pay a fixed rate to owners of qualifying photovoltaic generation systems for every solar kilowatt-hour generated over a fixed term.
October 24, 2012
On October 19th, the Municipal Art Society and the New York City Landmarks Commission (LPC) published an in-depth guide (“Guide”) to increasing the energy efficiency of historic rowhouses in New York City by employing measures such as the installation of rooftop solar panels. The guide provides resources for rowhouse owners seeking to improve the energy efficiency of their buildings in ways consistent with the special regulatory requirements applicable to historic buildings.
Increasing the energy efficiency of historic buildings is an important component of decreasing the overall greenhouse gas emissions (GHG) of New York City and meeting PlaNYC’s goal of a 30% reduction in such emissions by 2030. Presently, over 75% of the city’s GHG emissions come from buildings, and over 50% of the city’s building stock consists of buildings constructed before 1940.
Generally, any exterior change to a designated historic building, such a landmarked building or a building in a New York City historic district, is subject to the approval of the LPC, even if a permit from the Department of Buildings is not required. The Guide provides useful details on a variety of measures to improve energy efficiency with minimal architectural impact, such as weatherizing buildings, using energy-efficient heating and lighting controls, and installing basement and roof insulation.
The Guide also discusses the installation of solar panels on historic buildings, a project with the potential for a significant aesthetic effect. However, the Guide notes that most solar panel installations for flat or low-slope roofs, such as those often found on historic rowhouses, are approved by the LPC at the staff level, without need for a public hearing before the full commission. Hopefully this recent publication will encourage LPC staff to streamline the approval process for solar installations that meet applicable guidelines.
April 18, 2012
Two recent events signal New York’s continuing interest in promoting offshore wind development. First, on March 30, 2012, New York signed a Memorandum of Understanding (“MOU”) intended to streamline offshore wind development in the Great Lakes. The MOU was also signed by Pennsylvania, Illinois, Michigan, Minnesota and several federal agencies with regulatory authority touching on Great Lakes wind development, including the Environmental Protection Agency (“EPA”), the Army Corps of Engineers, the National Oceanic and Atmospheric Administration (“NOAA”) and the White House Council on Environmental Quality (“CEQ”). The MOU signatories agreed to work together to create and publish a regulatory roadmap for offshore wind development in the Great Lakes within 15 months, with CEQ serving as the primary federal point of contact.
Second, on April 3, 2012, the Renewable Energy Task Force of the Bureau of Ocean Energy Management-New York (“BOEM-NY”) convened a meeting to discuss New York’s ongoing activities regarding offshore wind development in the Atlantic, including the progress of studies intended to support a forthcoming proposal to amend the state’s Coastal Zone Management Program to include Atlantic wind development. The Task Force also discussed the New York Power Authority’s request that BOEM grant a commercial lease on the outer continental shelf to the Long Island-New York City Offshore Wind Collaborative, and the process and timeline for BOEM’s leasing decision and environmental impact review.
For more information, please contact Michael Bogin
January 26, 2012
Last week, DEC proposed two new regulations affecting power plants in New York State. Both implement provisions of the Power NY Act of 2011, and both apply to proposals to construct or modify power plants with the capacity to generate at least 25 megawatts.
First, DEC proposed carbon dioxide emissions limits for new and expanded power plants (so long as the expansion adds at least 25 megawatts of capacity). These limits are measured on the basis of a 12-month rolling average by dividing the total emissions of CO2 by the total megawatts generated or fuel input into the plant.
The limits are:
- 925 pounds of CO2 per megawatt-hour of electrical output, or 120 pounds of CO2 per million Btu of input for combined cycle combustion turbines, stationary internal combustion engines firing only gaseous fuel, or boilers firing over 70% fossil fuel, and
- 1450 pounds of CO2 per megawatt-hour, or 160 pounds of CO2 per million Btu of input for simple cycle combustion turbines or stationary internal combustion engines firing either liquid fuel or a combination of liquid and gaseous fuel.
Second, DEC proposed regulations governing analysis of environmental justice issues when power plants are sited under the reauthorized Article X of the Public Service Law. According to DEC Commissioner Joe Martens, these are the first such regulations in the country.
The proposed environmental justice regulations require an initial analysis of the area immediately surrounding the proposed facility to determine whether that area includes an “environmental justice area” containing a minority or low-income community that may already bear a disproportionate share of environmental impacts. If so, an application to site a power plant must include an analysis of any significant adverse environmental impacts to the environmental justice area resulting from the plant’s operation or construction. Such an assessment must include:
- An analysis of the plant’s cumulative impact on air quality,
- A comprehensive analysis of the environmental justice area, and
- A comparison of that area to the county or other adjacent communities (for facilities proposed within New York City, this includes the entire city) to determine if the impacts to the environmental justice area are disproportionate.
The regulations also require the applicant to identify, analyze, and implement mitigation measures that will avoid any disproportionate significant adverse environmental impacts to the maximum extent possible. If the impacts cannot be avoided or minimized, the applicant must offset the impacts.
The proposed environmental justice regulations state that they are “not intended to … create any right to judicial review involving the compliance or noncompliance of any person with this Part.” DEC also acknowledges, however, that the Power NY Act “expressly provides for judicial review” of power plant siting determinations. Thus, it is unclear to what extent, if any, the proposed regulations’ disclaimer precludes judicial review of the Act’s mandatory environmental justice analysis, or whether such limitation would be deemed consistent with the underlying statute.
Comments on both sets of proposed regulations are due by 5 p.m. on March 15, 2012. Information on filing comments is available here.
For more information, contact Jeffrey Gracer.
December 8, 2011
On November 17, 2011, the New York State Public Service Commission (“PSC”) decided to postpone its decision on Covanta Energy Corp.’s (“Covanta’s”) petition to classify waste-to-energy power as “renewable” under New York’s Renewable Portfolio Standard (“RPS”). New York’s RPS aims to produce 30% of the state’s electricity from “renewable sources” by 2015, up from approximately 21% in 2009.
To attain that goal, the RPS provides production incentives for renewable electricity generation, funded through a surcharge on ratepayers’ electricity bills and administered by the New York State Energy Research and Development Authority (“NYSERDA”). Eligible renewable electricity generators participate in a competitive solicitation process for the incentives, which are provided based on the megawatt-hours of renewable electricity delivered toNew York ratepayers or used on site. Additionally, the generator transfers all rights to the “RPS attributes” to NYSERDA, so the generator cannot benefit from the resulting pollution reductions under other emissions trading programs.
Most of the incentives to date have gone to wind, hydroelectric, biomass, and landfill gas projects, though a range of other sources – from solar, tidal and wave energy to anaerobic digesters converting agricultural biogas into electricity and heat – are also eligible. Covanta’s prior requests to include waste-to-energy facilities in the RPS, in 2004 and 2010, were both denied by the PSC.
Covanta’s petition presents a controversial question, as waste-to-energy plants provide an alternative to fossil fuels, but simultaneously present a number of environmental issues that are different from those associated with traditional renewable energy sources. Environmentalists and the New York Attorney General’s Environmental Protection Bureau have opposed the petition, citing, among other things, concerns regarding mercury emissions.
Proponents of waste-to-energy facilities argue that incineration for power production is better for the environment than transporting the waste to landfills. Covanta submitted a letter to the PSC on December 6th clarifying its position and highlighting the greenhouse gas benefits of waste-to-energy facilities. Covanta reasons that environmental benefits from waste-to-energy production make waste-to-energy a more environmentally-attractive option than landfill gas recovery, a method which is currently RPS-eligible.
A middle ground approach has been adopted in other states, including Connecticut, New Jersey, Massachusettsand Pennsylvania, whereby waste-to-energy facilities may receive subsidies, but not to the same degree as their zero emissions renewable generator counterparts. DEC officials have supported this compromise as an appropriate measure in the event that the PSC decides to allow waste-to-energy plants in the RPS.
For more information on the firm’s practice in the areas of energy and waste-management, contact Jeff Gracer and Paul Casowitz.
Update (December 14, 2011): In a recent letter to the PSC, Covanta withdrew its petition to classify waste-to-energy power as renewable under the New York RPS.
Older Posts »