PSC reverses on who would pay bulk of offshore wind cable-line costs

The state Public Service Commission has reversed a previous ruling that would have left Long Islanders and other downstate ratepayers with the tab for the bulk of offshore-wind power transmission costs, following an appeal by LIPA to spread the costs statewide. 

The PSC's latest decision, announced during a session Thursday, shifts the cost for the potentially billions of dollars for transmission-line upgrades and new lines to one that allocates costs based on utilities' electric-load volume for zones across the state. 

Under the newly ordered cost scheme, Long Islanders would pay around 14% of the costs for the transmission projects, which are heavily concentrated in the downstate, and specifically Long Island, region, because many of the offshore wind projects will connect at or pass through Long Island to reach the state electric grid. 

Under the previous March 2021 order by the PSC, downstate utility customers would have borne 75% of the cost of the projects, in part because the PSC found the Long Island Power Authority and Con Edison customers and their grids would be the biggest beneficiaries of the upgrades. Con Ed also filed an appeal objecting to the ruling.

In a statement confirming the decision, PSC spokesman James Denn said the latest decision is "consistent with other rulings." 

The commission, he said, "ordered that the cost allocation associated with certain transmission projects be based on the volumetric load-ratio share methodology, instead of a formula under which 75% of the selected projects’ costs would be borne by the economic beneficiaries of the projects, and the remaining 25% of costs would be borne by each of the utilities’ load-ratio share" under the March 2021 order. " 

The planned projects include building new large-scale power lines and, in some cases, nearly tripling the capacity of existing ones, including one between the LIPA and Con Edison service territories. Expanded transmission capacity also will make it easier for electricity generated upstate to reach Long Island.

Projects covered by the ruling aren't just to benefit offshore wind, but also include the state Clean Energy Standard and other projects initiated to comply with the state's Climate Leadership and Community Protection Act, Denn said. 

Newsday last year reported on the commission's initial order, and LIPA's objection to it, which included coalitions of Long Island business groups and local officials. 

Kyle Strober, executive director of the Assocation for a Better Long Island, whose real estate development members represent some of the largest LIPA ratepayers, called the decision a "more equitable cost-sharing" arrangement. He'd previously urged the commission to reverse its ruling. 

"The PSC clearly recognized that the statewide energy policy should not put an unfair financial burden on Long Islanders simply because of their geographic location," he said.

LIPA applauded the PSC's revised ruling, saying it "sets a consistent standard for how clean energy project costs are allocated across the state.”

Long Island Association chief executive Matt Cohen, who also had advocated for the commission to change the ruling, said wind projects off Long Island benefit the entire state, including helping New York meet climate-law mandates. 

"This is the fair and equitable decision by the PSC and our region will continue to lead the way in developing the renewable energy necessary to achieve the state’s goals," he said in a statement.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.