On August 15, 2024, the New York State Public Service Commission (PSC) issued an order establishing a proactive planning proceeding and directing New York State’s utilities to develop a framework for considering and planning infrastructure projects designed to meet new loads anticipated from the adoption of electric vehicles (EVs) and electrification of buildings.
The PSC identified the need for a significant ramp-up of infrastructure upgrades as a by-product of its efforts to address barriers to medium- and heavy-duty EV charging infrastructure. Stakeholder input across several technical conferences in 2023 highlighted that billions of dollars in grid upgrades will be necessary to enable electrification by 2050, in line with state policies under the Climate Leadership and Community Protection Act (CLCPA). Further, utility infrastructure upgrades can take over seven years to complete and, without intervention, can lag behind electrification efforts where construction timetables for both EV charging infrastructure and buildings are considerably shorter.
New York State’s utilities are directed to make two proposals: first for a long-term upgrade-planning process, and second for urgent upgrade projects. The PSC expects the long-term planning procedures to be developed by the first half of 2026, with the first filings due December 13, 2024. Urgent upgrade project proposals are due November 13, 2024, in order for the PSC to issue decisions in an expeditious manner.
With the long-term plans, the PSC’s aim is to develop a unified approach for the new electrification load. Transportation, for example, does not respect the boundaries of the respective utility territories; as such, the collaboration among the utilities is expected to prevent inefficient or duplicative upgrades. To that end, the PSC gave the option for utilities to recommend whether or not these frameworks should be integrated into the newly established Coordinated Grid Planning Process (CGPP), which was just established in August 2023 to coordinate transmission planning on a two-year cycle. Regardless, the proposals must also identify how granular load and demand forecast data will be obtained and modeled, either developed in-house from the bottom up or derived from the CGPP and CLPCA Scoping Plan; develop evaluation criteria for the PSC to weigh in on to determine the necessity and value of each upgrade project; and ascertain what future upgrades may arise on timelines not accounted for by the proposed planning process.
Regarding urgent upgrades, the PSC qualifies urgent as projects that must begin construction prior to the completion of the above long-term planning process within the next two years. In seeking approval of urgent upgrade projects, the utilities must present a rate-case quality proposal supported by cost estimates. To facilitate consideration of urgent upgrade projects, the order also directs the utilities to separately collaborate and propose a common approach to evaluation criteria, cost allocation, and cost recovery.
Barclay Damon will continue to monitor the ongoing proceedings.
If you have any questions regarding the content of this alert, please contact Brenda Colella, Regulatory Practice Group leader and Regulatory Practice Area co-chair, at bcolella@barclaydamon.com; Ekin Senlet, Regulatory Practice Area co-chair, at ensenlet@barclaydamon.com; David Solimeno, associate, at dsolimeno@barclaydamon.com; or another member of the firm’s Regulatory Practice Area.