PSC Approves $400 Million in Financing to Allow Utilities to Build New Electric Transmission Backbone to Support Renewable Energy Development in New York State

The New York State Public Service Commission recently (9/19) said it would allow a consortium of the major utilities known as New York Transco to borrow up to $400 million needed to upgrade transmission corridors that will increase the amount of renewable electricity that can be transmitted across the State.

"Our energy system needs smart transmission projects to move clean power, lower electricity costs, grow the green economy, and reduce emissions," said Commission Chair John B. Rhodes. "Improvements such as these will benefit all New Yorkers."

In 2015, the Commission voted to seek improvements to more than 150 miles of high-voltage transmission lines, representing the backbone of the State's electric transmission system running west to east and north to south, which will provide numerous benefits including reducing grid congestion and allowing lower-cost electricity and renewable electricity being produced in upstate New York to flow to millions of downstate customers.

The upgrades would provide many energy, economic development, and environmental benefits, such as:

• Promoting job growth and the development of new efficient generation resources upstate
• Reducing environmental and health impacts by eliminating less efficient electric generation
• Enhancing system reliability, flexibility, and efficiency
• Increasing diversity in supply, including additional renewable resources
• Enhancing resiliency/storm hardening and taking better advantage of existing fuel diversity
• Reducing production costs through congestion relief and reduced capacity resource costs
• Improving market competitiom
• Improving preparedness for and mitigation of impacts of generator retirements

In response to that decision, Transco, made up of Consolidated Edison Transmission, LLC, Grid NY LLC, Avangrid Networks New York TransCo, LLC, and Central Hudson Electric Transmission LLC, was formed to plan, develop, and own high-voltage electric transmission facilities in New York.

Each of these companies is an affiliate of a fully-regulated, investor-owned utility that operates in New York subject to regulation by the Commission.
In a petition filed on May 2, 2019, Transco requested approval to issue up to $400 million in new long-term debt securities. The financing is needed to complete the development and construction of an electric transmission line referred to as the New York Energy Solutions (NYES) transmission project, which will increase the amount of renewable electricity that can be transmitted from upstate to downstate.

Transco, working with National Grid, proposed this project through the competitive NYISO Public Policy Transmission Planning Process. NYES will help alleviate constraints on the transmission system that delivers electricity between the upstate and downstate regions, as identified in statewide transmission studies. The project will replace aging electric infrastructure, improve resiliency and storm hardening, and unlock upstate renewable development to meet state environmental goals.

The first phase of the project includes a new, 54-mile, 345 kV transmission line that begins at a new Knickerbocker switching station in the Town of Schodack, Rensselaer County, and ends at the existing Pleasant Valley substation in the Town of Pleasant Valley, Dutchess County. Transco expects to submit its Art. VII siting application to the Commission in the near future. The project is slated to be operational by the end of 2023.

Meanwhile, other transmission projects have also been submitted in response to the Commission's 2015 decision, including NextEra Energy Transmission New York, Inc. plans for construction of a 20-mile 345-kilovolt transmission line Located in the Town of Royalton, Niagara County, and the Towns of Alden, Newstead, Lancaster, and Elma in Erie County, and LS Power Grid New York, LLC and the New York Power Authority's proposal to construct and operate a 93-mile electric transmission line between the Town of Marcy, Oneida County and the Town of New Scotland, Albany County. Both projects are under review.

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