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Our attorneys stay on top of changes in legislation, agency regulations, case law, and industry trends—then craft timely legal alerts to keep clients up to date on legal developments important to their business.

April 1, 2020

COVID-19: Empire State Development Corporation Limits Scope of "Essential" Energy Projects

One of the primary ways New York State is trying to combat COVID-19 is through social distancing measures. Deemed necessary in light of the lack of a COVID-19 cure, these measures started as recommendations and then quickly turned into workforce reduction directives that now require all non-essential businesses to reduce their in-person workforce at any work location by 100 percent. The issue then became how to interpret the term “essential business”—a task delegated to the Empire State Development Corporation (ESD). 

Following Governor Cuomo’s directive, on March 19, the ESD initially issued guidance for determining which businesses are essential and not subject to the 100-percent workforce reduction requirements. It also provided a process by which a business or entity that was not identified as essential could request designation as an essential business. The ESD’s guidance has evolved since its initial issuance and, in doing so, has limited the breadth of what it means to be an essential business in an effort to further limit the spread of COVID-19.

Yesterday, the ESD issued further guidance on “essential” businesses; this time, specifically addressing energy sector projects. Essential projects (i.e., those activities necessary to respond to the COVID-19 state of emergency or to provide basic human services) include:

  1. Utility operations and maintenance and capital plan activities for: 
    • Existing power generation, including existing energy storage and EV infrastructure
    • Utility-scale new power generation for projects with an in-service date of September 1 or sooner 
    • Existing fuel supply 
    • Transmission and distribution infrastructure, including for maintenance, resilience, reliability, and demand response 
    • Ensuring safe and reliable service to customers
  2. Energy construction activities related to: 
    • Existing or expanding grid or other critical infrastructure, including but not limited to servicing transit facilities, health care facilities, affordable housing, and homeless shelters
    • New renewable generation or energy storage that are necessary to the continued operation of any of the above

All other renewable, energy storage, and power generation work is not considered essential. Similarly, energy efficiency and new EV infrastructure is not essential.

If you have any questions regarding the content of this alert, please contact Yvonne Hennessey, Environmental and Lobbying & Election Law Compliance Practice Areas co-chair and co-team leader of the Oil & Gas, Linear Infrastructure, and Energy Markets Teams, at yhennessey@barclaydamon.com.

We have a specific team of Barclay Damon attorneys who are actively working on assessing regulatory, legislative, and other governmental updates related to COVID-19 and who are prepared to assist clients. You can reach our COVID-19 Response Team at COVID-19ResponseTeam@barclaydamon.com.
 

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