A new proposal would establish PowerNYC Development Corporation, a publicly owned developer of distributed batteries, solar installations, and thermal energy networks. Its headline claim deserves scrutiny: an initial 200 MW battery portfolio could save New York City ratepayers at least $170 million annually. The authors recommend $100 million in initial state capitalization.
Affordable electricity, reduced environmental burdens, and better infrastructure are worthwhile objectives. But agreement on those objectives does not establish that this particular institutional model will deliver them. PowerNYC should be judged by the electric services its projects actually provide, their complete costs, and their performance during difficult operating conditions—not simply by installed capacity or public ownership.
I am convinced that implementation of the Climate Act net-zero mandates will do more harm than good if the future electric system relies only on wind, solar, and energy storage. The opinions expressed in this article do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone. I acknowledge the use of Perplexity AI to generate summaries and references included in this document.
Start with the savings calculation
The October 28 paper by Jason Kowalski and Johanna Bozuwa presents the $170 million savings figure prominently. Appendix 1 provides an important qualification: the estimate represents potential reductions in capacity-market costs, not a demonstrated, comprehensive net benefit after accounting for the proposed battery portfolio’s costs.
The calculation has two parts. First, the authors estimate how additional battery capacity would lower prices along NYISO’s 2025–2026 capacity demand curve. They explicitly acknowledge that this simplified calculation does not model the capacity supply stack or fully simulate realized market savings. They then calibrate the result using NYISO’s 2018 energy-storage consumer-impact analysis.
That is a starting point for investigation, not sufficient evidence for a dependable annual savings commitment. The underlying spreadsheet, assumptions, and calculations are available upon request rather than published with the report. Independent reviewers therefore cannot reproduce the headline estimate from the document alone.
The original NYISO consumer-impact study also distinguishes short-term price reductions from long-term outcomes. Its discussion on page 29 warns that initial capacity-cost effects may not persist as retirements and other supply changes occur.
PowerNYC’s proponents should publish their workbook, identify which historical results they used, and explain how they account for changing supply, demand, market rules, and resource retirements. Potential distribution savings should remain separate until specific projects establish which investments can actually be avoided. The paper appropriately acknowledges that those benefits have not yet been quantified.
Lower capacity payments can benefit consumers. But a modeled price reduction is not automatically a permanent reduction in the physical cost of maintaining reliable service.
What problem does ownership solve?
The proposal is more substantial than a call for additional subsidies. PowerNYC would originate projects, aggregate sites, arrange financing, manage construction, and own operating assets. Its intended advantages include standardized procurement, public-site access, coordination, and recycling development capital through refinancing or asset transactions.
Those possibilities deserve consideration. Schools, housing organizations, and other institutions should not have to become energy-development specialists to evaluate worthwhile projects.
However, institutional barriers and engineering constraints are different problems. Lower financing costs do not establish that a battery has adequate duration, that a feeder can accommodate charging, or that electricity will be available when needed.
The report recognizes this distinction in Appendix 2. It discusses coordinated charging schedules and enforceable operating limits to address Con Edison’s concern that simultaneous battery charging could create new local peaks. It also acknowledges that such arrangements could reduce project revenues.
That qualification belongs in the financial analysis. If operating restrictions are necessary for reliability, projected revenues must reflect them.
The relevant question is not whether public development can build projects. It is whether this model can deliver required services more effectively than utility procurement, existing public institutions, private development, or targeted efficiency investments.
Specify what the batteries provide
The most conspicuous technical omission is the absence of a defined energy-storage requirement. The paper proposes 200 MW of batteries but does not specify the portfolio’s usable energy in MWh or discharge duration.
Megawatts describe how much electricity a battery can deliver. Megawatt-hours describe how much it can deliver before requiring recharge. A power rating alone cannot establish the portfolio’s reliability contribution.
NYISO’s own accreditation factors demonstrate why duration matters. For the 2025–2026 capability year—the year cited in PowerNYC’s methodology—the New York City factor was 78.53% for four-hour energy-duration-limited resources and 96.12% for eight-hour resources. These historical factors are not guarantees of future accreditation.
Before accepting the savings calculation, reviewers need to know the assumed duration class, availability, degradation, charging restrictions, and market-participation arrangements. They also need to know whether the same stored energy is implicitly committed to multiple services.
Energy arbitrage, peak reduction, ancillary services, distribution support, and customer resilience should be evaluated separately. A credible operating schedule must demonstrate that the portfolio can meet its combined obligations.
Greg Harkenrider’s guest analysis published on this blog examines how storage requirements depend on the assumed generation portfolio and weather sequence. Its statewide seasonal-storage estimate should not be presented as the requirement for PowerNYC’s limited portfolio. The relevant lesson is methodological: storage must be evaluated against the conditions and services it is intended to address.
Reliability before retirement
The paper argues that distributed clean-energy development could help eliminate New York City’s dependence on local fossil generation. It also describes battery capacity as displacing higher-cost fossil capacity in the capacity market.
Those statements require careful interpretation. Reducing a market-clearing price is not the same as demonstrating that a particular generating unit can retire without compromising reliability.
The Independent Intervenors’ September NYPA conferral overview establishes the appropriate principle: dependable resources should remain available until replacement resources and supporting infrastructure are operational, deliverable, and demonstrated under stressed conditions.
PowerNYC does not have to solve New York’s entire dispatchable-emissions-free-resource problem to justify a useful battery installation. Nor must every distributed project supply electricity through a prolonged statewide renewable shortfall.
But any generation-replacement claim must identify the services being replaced and demonstrate equivalent performance. That requires chronological analysis of demand, generation, battery state of charge, recharge opportunities, imports, and credible equipment outages.
The analysis should address individual projects and the combined portfolio. What happens during consecutive high-demand days? What if local and bulk-system needs occur at different times? Which resources sustain service after batteries discharge?
A useful project is not necessarily a complete replacement resource.
Location matters in New York City
PowerNYC correctly recognizes that strategic siting is essential to securing distribution benefits. It proposes screening public properties for available grid capacity and locating batteries where they can relieve constraints.
But available land, an economical interconnection, and maximum reliability value may not coincide. Candidate sites should be assessed against actual network needs, rather than assuming that a large public-property inventory establishes a viable portfolio.
The Independent Intervenor NYPA conferral overview comments distinguishes bulk-power adequacy from distribution-system performance. Adequate statewide capacity does not establish that a particular transformer or feeder can serve additional demand. Conversely, relieving a neighborhood constraint does not necessarily resolve a bulk-system deficiency.
The 2022 peaker-replacement discussion on this blog also distinguishes purpose-built combustion turbines from larger steam-electric units operating infrequently. Calling both “peakers” does not establish identical replacement requirements.
Any retirement proposal should identify the affected units, their locational services, required operating duration, and the applicable reliability review. Older battery-footprint estimates should not substitute for current project designs.
Solar and thermal energy networks likewise require project-specific evaluation. Their contribution should be assessed alongside the electricity demand, infrastructure requirements, and customer obligations they create.
Count all costs and risks
The distinction between project economics and reliable-system economics underlies my discussion of inexpensive renewables. My affordability-standard comments similarly call for complete, transparent accounting rather than selectively defined costs.
For PowerNYC, that accounting should include financing, charging electricity, losses, degradation, replacement, interconnection, network upgrades, insurance, administration, and decommissioning. It should distinguish host savings, wholesale-market effects, total system costs, and retail-bill impacts.
The report’s promise of projects without upfront costs must also be understood alongside its request for public capitalization and subsequent revenue-backed financing. Moving expenditures away from a project host does not eliminate them.
Who bears overruns, unsuccessful development expenses, revenue shortfalls, and stranded assets? After those risks are allocated, whose bills fall, by how much, and for how long?
Evaluate environmental performance
Environmental evaluation should distinguish avoided emissions from demonstrated reductions in neighborhood exposure and health effects. Plant-specific emissions, dispersion, and source-apportionment evidence are preferable to assuming that proximity alone determines benefits—a concern raised in my earlier peaker discussion.
Directly emitted pollutants and secondary pollutant formation should be evaluated separately. Closing a plant may provide local benefits but their magnitude should be demonstrated rather than dismissed or presumed.
The same discipline should apply to charging emissions, battery chemistry, fire protection, emergency response, and lifecycle impacts. Historical battery incidents should not be generalized to every contemporary installation but they should also not be ignored.
A better development standard
PowerNYC should begin with a reliability-and-affordability investment screen:
- Define the specific system or customer problem.
- Compare technically credible alternatives providing equivalent services.
- Publish complete costs, operating assumptions, and environmental outcomes.
- Establish enforceable performance requirements and independent verification.
- Expand only after demonstrating results.
The Independent Intervenors’ Con Edison testimony, particularly pages 20–22, proposed subway traction-energy recovery, targeted improvements for steam-system customers, and preservation of distribution headroom. They provide cost-effective emission reductions. These are candidates for comparative evaluation—not established savings that should be accepted without scrutiny.
Public development could have a constructive role. However, public ownership should not exempt projects from the engineering, financial, and environmental tests demanded of any other investment.
Before committing public capital, require a reproducible savings calculation, a defined battery portfolio, location-specific reliability evidence, and clear accountability for outcomes. Developing projects is a means. Reliable, affordable electricity is the objective.
