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April 17, 2020

Deep Dive Part Two: New Article VII Deadlines, Transmission Planning for New York State in Accelerated Renewable Energy Growth and Community Benefit Act

We recently issued an alert announcing the NYS Legislature had passed the Accelerated Renewable Energy Growth and Community Benefit Act to expedite siting renewable energy projects, and, in Part 1 of our “Deep Dive” series, we discussed the new accelerated siting process in more detail. In today’s second “Deep Dive,” we provide an overview of the Act’s amendments as they relate to Article VII of the Public Service Law and describe how the Act seeks to prioritize the planning and cost-effective development of distribution and transmission infrastructure.

Power Grid Study

Pursuant to the Act, the Department of Public Service is directed to undertake a “power grid study” to evaluate and identify distribution and local transmission upgrades and bulk transmission investments to ensure the targets established by the Climate Leadership and Community Protection Act (CPLCA) are timely met.

In developing the study, the Department must consult and coordinate with the NYS Energy Research and Development Authority (NYSERDA), the NY Power Authority (NYPA), the Long Island Power Authority (LIPA), the state grid operator (NYISO), and utility owners and developers of transmission projects as well as utilizing information available to the Department from other relevant studies and research related to upgrading the state’s power grid. NYSERDA and the NYPA are authorized to contribute to the cost of the study, subject to their respective boards’ consent. The Department has discretion to include issues it determines to be appropriate, including system reliability, safety, cost-effectiveness of upgrades, and investments in promoting the development of major renewable energy facilities, among others. The Department’s initial findings and recommendations are required within approximately nine months of the Act (early January 2021).

State Distribution and Local Transmission Upgrade Programs

No later than 60 days following the Department’s initial findings and recommendations, the NY Public Service Commission (PSC) is directed to commence two separate proceedings: to establish a capital expenditure plan for state distribution and local utility transmission upgrades and to develop an investment plan for bulk transmission upgrades. The second proceeding will likely include a separate section for the transmission lines and upgrades needed for the off-shore wind projects awarded contracts by NYSERDA.

The purpose of the state distribution and local transmission upgrade program is to establish a prioritized schedule to complete each of the distribution upgrades and local transmission upgrades identified in the power grid study. Similarly, LIPA is directed to establish a capital program to address upgrades in its service territory.

The “bulk transmission investment plan” will identify specific projects to be completed under an aggressive schedule to achieve the state’s renewable energy development and emission reduction goals in accordance with the CLCPA. This plan will be submitted to the NYISO, and project selection will follow the NYISO’s public policy transmission planning (PPTN) process. Projects will be awarded within eight months following a PPTN notice by the NYISO, a considerably shorter amount of time than the last PPTN process in early 2010s.

If the PSC identifies a project that must proceed prior to the eight-month PPTN period, it may do so through the NYPA’s competitive procurement process. Given the NYPA’s current ownership and operation of substantial electric transmission assets in New York State, under the Act, the NYPA is authorized through a public process to solicit co-participation and may enter into agreements and take other actions to undertake and timely complete the development of priority transmission projects. For priority projects outside of the NYPA’s existing rights of ways (ROWs), the NYPA may select private-sector participants through a competitive bidding process.

The above programs are intended to be evaluated every four years, commencing January 1, 2023, including a comprehensive review by the PSC of the actions taken and their impacts on grid congestion and achievement of the CLCPA targets. New proceedings will be instituted to address any deficiencies as determined necessary by the PSC. Both our regulatory and renewable energy attorneys will monitor these proceedings as they develop, and we will issue future legal alerts with more details.

New Statutory Deadlines to the Article VII Process

The Act also adds new statutory deadlines to the Article VII process, which is a dramatic change for transmission owners and developers. Before the Act, there was no deadline for the PSC’s final decision on the Article VII Application under the Public Service Law. 
The new major Article VII deadlines include: 

  • A 12-month statutory deadline for the PSC to issue a final decision on Article VII applications once an application is found complete. This is a positive improvement, as, without a deadline, these Article VII proceedings tend to go on for years even for straightforward upgrade and maintenance projects.
    • Under the Act, applicants have the right to waive the 12-month deadline; the deadline is also tolled during settlement discussions.
    • The PSC may extend the 12-month decision deadline under reasonable circumstances by no more than six months on three grounds: 
      • In order to give consideration to specific issues necessary to develop an adequate record
      • Because the applicant has been unable to obtain necessary approvals 
      • Consents related to highway crossings or for other reasons deemed in the public interest
  • The Act also directs the PSC to promulgate rules and regulations to establish an expedited process for projects proposed in existing ROWs and includes a nine-month deadline for final decisions for those proposed projects. This will also be a game changer for the applicants, especially for the upgrade projects on existing lines.

If you have any questions regarding the Act, the CLCPA, the PPTN process, or how these new laws and proceedings may impact your projects in New York State, please contact Brenda Colella, Regulatory Practice Area co-chair and co-team leader of the Renewable Energy and Energy Markets Teams, at bcolella@barclaydamon.com; Ekin Senlet, partner, at esenlet@barclaydamon.com; Genevieve Trigg, counsel, at gtrigg@barclaydamon.com; or Angela Sicker, law clerk, at asicker@barclaydamon.com. 
 

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