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Questions on the Build Public Renewables Act, Part 2: Climate Cart Before the Horse
The successful campaign to Build Public Renewables in New York should rekindle public power. But, contrary to effusive praise across progressive media, is it also a victory for climate politics?
In May, the New York State passed budget legislation that included an initiative to allow the New York State Power Authority (NYPA) to own and operate renewable energy projects across the state. This new law built upon previous legislation drawn up by Public Power New York (PPNY), a campaign of environmental groups and Democratic Socialists of America chapters across New York State under the name the “Build Public Renewables Act” (BPRA). (Disclosure: I campaigned in this coalition as co-chair of our local DSA chapter’s ecosocialist committee from 2019 to 2021.)
Much of the sympathetic reporting and analysis in progressive outlets simply assumed BPRA was a win for the climate and will necessarily lead to decarbonization. The logic goes that since the private sector is failing to advance decarbonization at the necessary speed and scale, the public sector, with its lack of profit motive, can do better. Another product of the hype surrounding the victory was that a campaign for “public power,” i.e., public ownership of parts of the increasingly important electricity sector, was elevated into a model for a “Green New Deal,” a much broader, more aspirational political project, perhaps undermining the significance of the former.
Is the BPRA a climate victory? And does it serve as a model for a Green New Deal? Progressive and socialist accounts — as in In These Times, The New Republic, The Nation, and Jacobin — seem to unite in a resounding and uncritical affirmation. This essay pours a little cold water on both these widely broadcasted claims in the wake of the successful campaign to Build Public Renewables.
Will BPRA Spur Rapid Decarbonization?
While I think the win is significant and might lead to a significant increase of the role of public power in the generation of electricity, I also think too many are heralding BPRA as a victory or model for climate organizing before we can assess whether it succeeds at the ultimate goal: spurring rapid decarbonization. I’m very skeptical this legislation will actually lead to that (though I hope I’m wrong) for four big reasons.
Public Up Against Private
This is not a public takeover of the energy production or ‘generation’ business, which is currently a market dominated by private capitalists, or ‘independent power producers’ buoyed by their own powerful lobbying organization, who all compete to sell electricity in NY’s deregulated wholesale market. It is these capitalists who were most vocal in opposing the legislation: “There’s no shortage of private companies” to develop renewable energy, and “a lot has to play out” before 2025 when BPRA takes effect, their President argued.
The new law only gives NYPA the ability to build renewable projects if it is determined through a public planning process — a process that only happens once every two years and was pushed for by the same independent power producer lobby, and accepted by the PPNY coalition — that the private sector is not moving fast enough to build renewable energy to reach the state’s decarbonization goals. (The Climate Leadership and Community Protection Act mandates that 70% of electricity generated in New York comes from renewable sources by 2030 and 100% of it from emissions-free sources by 2040.) You can bet that the private renewables sector will argue vociferously in this planning process that they have the energy transition covered. There are simply lots of veto-points that will not only prevent NYPA from leading this process, but will more likely ensure NYPA plays only a marginal role in the renewable energy market moving forward. In an interview with David Roberts, energy expert Jesse Jenkins argued private investors are very comfortable — using words like “vanilla” and “mature” — in the renewable energy sector: “People are used to these projects, there's a lot of them, they're smaller.” Even with the direct pay tax credit options in the Inflation Reduction Act, public power entities might be less convinced they can get a foothold in such a market.
Compounding New York state’s penchant for private renewable development is a recently announced Department of Energy Loan Program Office collaboration with the New York State Energy Research and Development Authority (NYSERDA). It is highly likely that only private developers will be able to take advantage of this program (the Tennessee Valley Authority, for example, has concluded that, as a public entity, it cannot take DOE loans).
Short-Term, Renewables-Only Focus
A recent report shows many on the inside of NYS’s electricity planning apparatus are increasingly convinced we cannot reach our decarbonization goals with renewables alone. Fred Stafford and I have already argued NYPA would be better served to direct its efforts toward areas in which it already has significant ownership, expertise, and capacity (like transmission), or in what the public sector excels at developing: less proven, riskier technologies like green hydrogen or small modular nuclear reactors. For example, two jewels of historic public power, the U.S.’s Tennessee Valley Authority and Canada’s Ontario Power Generation, are collaborating on developing small modular nuclear reactors. As we’ve also argued in Catalyst, it’s worth noting that industrial/electricity unions also promote a much broader vision of decarbonization beyond just renewables and explicitly promote nuclear power (and this aligns with the state of the art models on what is required as well).
While the PPNY campaign claims the focus on renewables is because of the 70% by 2030 goal, this ignores the 100% emission-free 2040 goal — a goal that will require many other kinds of technologies, as the state’s grid operator warns. The fixation on renewable energy is a product of the coalition’s ties with environmental organizations like the Energy Democracy Alliance, Food and Water Action, and Alliance for a Green Economy (AGREE), all of which tend to promote unrealistic visions of 100% renewables. When I used to participate in statewide Zoom calls with the coalition, full time staffers from these organizations were huge players driving the organizational goals and strategy.
Tangentially, it was many of these same organizations that waged campaigns to close the Indian Point nuclear power plant outside of NY city. That sad closure angered the unions in the sector, putting hundreds of their members out of work. And emissions have only gone up as a result, since its power was replaced with increased combustion of natural gas. When the campaign starts with a coalition including these anti-union greens, how are you going to build a labor-centered movement?
Eroded State Capacity
Like most public sector entities under neoliberal austerity and privatization, NYPA stands today as a mostly forgotten institution whose state capacity has been eroded for decades. As an example, in 2013 NY State implemented the “Charge Program,” which directed NYPA to build 3,000 charging stations across the state (in 2018 that was revised to 10,000). As of last year they had only built around 500. The question is how it will revive its own state capacity to become a major player in the renewable energy market? It’s only because of the Inflation Reduction Act — allowing public power entities to take advantage of “direct pay” tax credits for the first time — that NYPA welcomed the possibility of investing in renewable energy. (The CEO Justin Driscoll famously opposed BPRA in a July 2022 hearing, right before the IRA Passed, because he felt NYPA could not compete with the tax credit-subsidized private sector.)
How does the PPNY campaign plan to change the institutional culture at NYPA itself, to proactively build? One of the ‘losses’ for the campaign in the negotiations was the scrapping of a proposal to restructure NYPA’s board and governance. And, after the coalition agitated to get Justin Driscoll’s nomination as CEO scrapped from the Senate, it appears Hochul-aligned forces have rammed him in anyway. It’s worth pointing out that the campaign tried to claim that unions opposed Driscoll, using allies from an UAW local, but the building trades actually vocally supported him in the face of this opposition.
But a success of the campaign was a mandate in the final law to build, in accordance with that years-long planning process. The question is what they will do with that mandate.
An Arm of the Executive
Another thorny problem is that NYPA is an extension of executive power: the governor appoints the board. Thus, serious reform of NYPA would likely require a public power champion in office, and it’s very clear that champion is not Kathy Hochul, who just won another four-year term. My reading of the BPRA “win” is that Hochul put her version in the “budget” negotiations so she could have more control on the final version (rather than let it get debated in the legislative session after, where it nearly passed in 2022). See Fred Stafford’s overview of how her version actually improved on the original. It’s his view that Hochul forces aligned with experts in NYPA to write a version that made more sense from their standpoint with expertise in the power sector — and with the new context of the IRA in play. Now with Driscoll as the CEO, Hochul has an ally leading NYPA.
The July 2022 hearing also demonstrated that other entities in NY state like NYSERDA, NYISO, and the New York Public Services Commission, all seem confident the state’s goals can be mostly met with the private sector. This, in my view, is Hochul’s vision as well, and I don’t see her pushing for NYPA to vastly expand their role. And in NYSERDA’s recent 10-point action plan to expand the state’s renewable energy industry, NYPA’s potential role is limited merely to coughing up “just transition” funds for the state to use — a result of BPRA.
Given my hypothesis that BPRA will not lead to significant decarbonization (at least not led by NYPA), I really worry about how this will affect the armies of progressive activists and volunteers who committed themselves to this campaign, along with everyone whose doors they knocked, on the basis it would accomplish such ambitious goals.
Is This a Green New Deal?
Once the law was passed, organizers from the Democratic Socialists of America (DSA) have heralded this as a model for a “Green New Deal” — and recommending other DSA chapters and states take up this model. There are a number of problems with this idea.
No Green New Deal Without Federal Spending
In my view, the entire Green New Deal idea is based on the unique fiscal flexibility of the U.S. federal government’s spending capacities. State and local governments must abide by a de facto austerity and balanced budgets (interestingly, the PPNY campaign always made the case the legislation was revenue neutral since NYPA can raise its own capital via bonds). A real GND could never be possible at the state level. And, on cue, warnings from the Hochul appointed Budget Director on the need to acknowledge “our fiscal constraints” and looming “multi-year budget gaps” are increasingly shaping NYS politics today in 2023.
Another reason for bringing in the fiscal power of the Federal Government is the electricity system largely relies on a highly regressive “rate-base” financing model where needed investments in greening the grid will be paid by ratepayers’ consumption. Federal spending financed by progressive taxation could make needed public investments in the electricity sector without relying on this regressive rate base.
Universal Material Gains vs. Means Testing
The key theory of change behind a GND was to create a broad, popular coalition for climate action by delivering material gains to the working class as a whole. Because BPRA was focused entirely on the generation side (how we produce electricity) and not the distribution side (who sells electricity), it was always hard for the campaign to argue credibly it would lead to lower rates for the whole working class (but they still argued this!). And, unfortunately, in the proposed legislation that barely failed in 2022 and the accepted version in 2023, there are “means tested” utility bill credits only for “low and moderate income” groups — not residential consumers across the board. Many socialists have argued why we should be fighting for universal benefits because means tested programs are frustrating and hard to access — and they also create divisions within the working class. Imagine if you were someone who fell just above the “low and moderate” income threshold and thus gain no price discounts from this legislation? It is a recipe for resentment politics.
The Road Ahead for Public Power
In closing, I want to be clear that this campaign won not because of the strategic brilliance of Green NGOs, but because of the volunteer organizing of masses of socialist and other progressive activists to create pressure for the legislation, and that previously got socialists elected to the legislature. To be sure, this impressive and important feat created a credible primary threat to all Democrats in New York State.
But passing a law does not guarantee the advertised good outcomes. Public power advocates in New York remain at an impasse: despite the important new law, NYPA’s hands are still tied and the organized labor that powers them don’t seem on board.
We do actually need public investment and public power, or else we cannot expect private capital to align its profitability expectations with decarbonization at the scale and speed required.
Currently in New York and elsewhere, the organized workers within the central sector of decarbonization, electricity, oppose public power for legitimate and structural reasons. What we can win without them, BPRA, is weak and compromised, but unfortunately, where those structural barriers exist, a worker-and-union-led path to public power and effective decarbonization seems closed for the time being.
This stalemate, for me anyway, reaffirms the necessity of a much broader political shift at the federal level, as in the original spirit of the Green New Deal. Such a federal shift would have the capacity to actually realize the scale of industrial investment needed — and desired by unions looking for realistic, long-lasting good work — and might achieve the kind of sweeping structural reforms of the legal landscape, like the PRO Act, that could make those unions more open to publicly owned utilities in general.
Even before such a transformation, public power advocates must stop basing their organizing and coalition building on Green NGOs and their narrow, infeasible technical visions of decarbonization, and start listening to what the actual skilled workers in this sector see as a viable path to good union jobs, reliable electricity, and decarbonization.