Wind Power and the South Shore of Long Island
The companies contracted to build renewable energy projects in New York have had a rough month. First, their effort to renegotiate their contracts at a higher rate was rejected by the state’s Public Service Commission, and then their effort to force the City of Long Beach, Long Island to close part of their beach for two years while a powerline was tunneled below was vetoed by Governor Hochul. The bid for an increased subsidy was a brazen attempt to muscle the state into paying any price to meet our greenhouse gas reduction goals. According to Politico’s Marie J. French:
“The state’s landmark climate law requires 70 percent of electricity in 2030 to come from renewable resources. The projects seeking higher payments — four offshore wind and 86 land-based renewable projects — represent 25 percent of the forecast electricity demand in 2030. The increases, if approved, would have totaled about $12 billion net present value, doubling the costs to ratepayers of the existing contracts as Hochul has warned about the stress that higher rates would have on residents. Hochul said in a statement the decision by the PSC was necessary to maintain affordability and preserve the competitive process.”
Similarly, the attempt to force Long Beach to accept the project was another effort to strong-arm a local community into sacrificing the use of parkland without concern for local needs. Both corporate setbacks indicate that these renewable energy companies need to get more sophisticated about how they engage in New York’s state and local politics. I should note that I have a summer home in Long Beach, and I favor the offshore wind project. Most people in Long Beach suffered the impact of Hurricane Sandy and understand that climate change is real and that we need to move to renewable energy. According to the reporting of Charles Lane in the Gothamist:
“Long Beach City Council President John Bendo says residents are acutely aware of rising sea levels and the need for more renewable energy, but that they opposed bringing the power transmission line through the center of town and its beach. Bendo faults the wind developer, Equinor, for not addressing the community’s concerns. “We begged them to implement some kind of public engagement process to talk to the residents. If you want to sell your project to residents, you need to explain to them what benefits are there for them,” Bendo said. “And they just did nothing. They didn’t lift a finger.” Equinor did not address questions about its community engagement when asked by Gothamist. Instead, the company’s President Molly Morris emailed a statement saying that New York was undermining the state’s renewable energy mandate.”
This company clearly overestimated their political leverage with the state of New York. They think we are so desperate to decarbonize we will pay any price they ask and force a project on a town without consideration of local impact. All this makes me question the management competence of this company and is an indication that other vendors should be considered. If there are no other vendors, we should delay the project until there are.
Engagement with local communities is critical to siting new infrastructure. Since the beach is mainly used from Memorial Day to Labor Day, perhaps the project could be phased in such a way to keep the beach in use during those months. Alternatively, a community benefits agreement could provide funding for a new local facility in exchange for the inconvenience caused by construction. Possibly, lower electric rates could be provided as a side payment to people in Long Beach. A company that engages with a local community has a better chance of successfully siting a facility than one that tries to ram a project down a community’s throat.
Environmentalists need to understand that we undermine support for critical climate goals if we are insensitive to local community concerns or accept contractors who try to jack up the price they are charging once they get their foot in the door. Some of the local activists protesting the offshore power project are far-out conspiracy theorists, but others are expressing legitimate and important concerns. It may be that the costs of construction of the wind project are growing and are beyond the control of the contractor, but if renewable energy is to be implemented, it must be less expensive than fossil fuels. If this wind project’s costs are out of control, we should look for renewable energy technologies that are lower in price. Moreover, the effort by environmentalists to push this project over the objections of the Republican minority in the state legislature ensures that decarbonization will become an increasingly partisan and polarized issue. Instead, we should be building a consensus on the need to build a modern, more reliable, and cleaner energy system. Unquestionably, some of the Republican opposition to renewable energy is ideological, and these zealots will oppose anything Democrats support, but the urgency of the climate crisis should not be used as an excuse to short-cut the important step of building community understanding and support of a renewable energy project.
We cannot adopt a strategy of decarbonization at any price. Renewable energy and battery technologies are rapidly developing. They are becoming more cost-effective and reliable. We need not commit to technologies that are characterized by higher costs. Moreover, we should not contract with vendors operating as monopolies without competition. Fifteen years ago, my colleague Bill Eimicke and I published a book with Georgetown University Press entitled The Responsible Contract Manager: Protecting the Public Interest in an Outsourced World. In that work, we acknowledged that contracting was an essential tool in modern organizations but warned about the danger of entering into bad deals. When a vendor seeks a 25% cost increase before they’ve built anything, that’s a sure sign of a weak contractor. And it is typically a sign of additional problems that are sure to come. A contractor that won’t engage with a local community and hides behind the state’s carbon reduction goals while seeking a massive price increase is not my idea of a competent and reliable partner. And keep in mind that additional cost overruns or political malpractice might well undermine public support for climate goals.
The transition to a renewable resource-based economy has begun, but movement from the current system of production to a true circular economy will take time and often be a matter of two steps forward and one step back. Forcing the transition on a reluctant public is a terrible way to generate support for change. There are no shortcuts to meaningful change. The public must be engaged, and projects must be modified to address public concerns. New York State needs to utilize Long Island’s offshore winds to meet our decarbonization goals. But the important ends do not justify the use of illegitimate means.