Contracts approved for transmission lines to bring renewable power into New York City

A New York State agency Nov. 30 said it has approved two contracts to deliver solar, wind and hydropower into New York City through new transmission lines, with an expected average Tier 4 renewable energy credit cost of $28.29/MWh for both projects.

"This announcement not only accelerates our pace to achieving the goal for having 70% of New York State's energy to come from renewable resources, we're also creating sustainable jobs, reducing our dependence on fossil fuels, and paving the way for cleaner air and a healthier future for all New Yorkers," New York Governor Kathy Hochul said in an emailed statement.

The project proposals were submitted in response to the New York State Energy Research and Development Authority's solicitation under the Tier 4 renewable energy credit program.

In total, the two transmission lines will transport approximately 18 million MWh/yr. of upstate and Canadian renewable energy, according to NYSERDA.

The announcement is "bolstered" by the City of New York's confirmation that it will join in these landmark awards, the agency said.

"If the largest city in the nation can rely on clean energy for power, any place can," New York City Mayor Bill de Blasio said. The city has a goal to power all New York City government operations with 100% renewable electricity by 2025.

The contracts have been submitted to the New York Public Service Commission for approval and are subject to a public comment period that will run through Feb. 7, 2022. No date has been set for the PSC to decide after the comment period.

If the contracts are approved, NYSERDA payments will only start for each project once it has received all required permits and approvals, has completed construction, and is delivering power to New York City, which is expected to begin in 2025 for the fully permitted Champlain Hudson Power Express project and 2027 for the Clean Path New York project, according to NYSERDA's statement.

The Tier 4 program procures both renewable energy and new transmission capacity and has been set up with an index renewable energy credit, or REC, structure to "help cushion customers against spikes in energy prices so when electricity prices rise the Tier 4 program costs go down," NYSERDA said.

With an expected average Tier 4 REC cost of $28.29/MWh for both projects, once the projects enter operation, the average bill impact for customers will be approximately 2%, or just over $2 per month, according to NYSERDA.

The Index Tier 4 REC strike price for each month in all years of the 25-year Clear Path contract is $129.75/MWh.

The Index Tier 4 REC strike price for each month in the first year of the CHPE contract is $97.50/Tier 4 REC which increases to $176.36/Tier 4 REC in the 25th year of the contract.

Project details

The 1,250-MW Champlain Hudson Power Express project has been under development for many years and would involve building a high-voltage direct current line from the Canadian border into the city that would primarily run under the Hudson River and existing rail lines.

CHPE is being developed by Transmission Developers, which is backed by private equity firm Blackstone.

The project would be supplied with hydropower from provincially owned Hydro-Québec's reservoir system. Large-scale hydropower did not qualify to receive RECs before the state created the Tier 4 system.

The Clean Path project combines a 1,300-MW, 174-mile underground HVDC transmission line with over 3,400 MW of new wind and solar projects in upstate New York, with availability and reliability maximized by the existing Blenheim-Gilboa pumped hydro storage facility, according to a statement.

The project is a partnership of the state-owned New York Power Authority, and private companies Invenergy and energyRe.