New York’s energy transition is becoming a blank check written by us

New York’s power grid is heading toward a period of enormous investment. That’s unavoidable.

Electricity demand is rising. The state’s pushing more homes, vehicles and businesses toward electrification. Data centers and large manufacturers are seeking access to the grid. Existing power plants are aging. Transmission bottlenecks are already limiting how efficiently electricity can move across the state.

And absolutely none of that is particularly surprising. I’ve been writing about it for two years now.

What should concern ratepayers is that New York still doesn’t appear to have a financial plan for handling all of it.

The New York Independent System Operator’s draft 2025-2044 System and Resource Outlook makes that problem hard to ignore. The report does not calculate what the transition will add to an individual utility bill, and it’s not a formal reliability study. But it describes a system that will require an unprecedented amount of new generation and transmission while relying, in some scenarios, on technologies and construction timelines that do not exist today.

That’s a warning sign.

Under scenarios requiring a fully zero-emissions electric system, NYISO estimates New York will need upwards of 105 gigawatts of new resources by 2044. Less stringent scenarios require roughly 30 to 60 gigawatts.

For context, the report says less than 15 gigawatts of new resources have been added to New York’s system during the past 25 years.

In other words, the most aggressive scenario could require the state to build roughly seven times as much new capacity over the next two decades as it added during the previous quarter-century.

That capacity would include enormous amounts of wind, solar, storage, nuclear power and, potentially, hydrogen-fueled generation. It would also require massive transmission investment to move electricity from the places where it can be generated to the places where it is actually needed.

We’re not talking abstract numbers. Each project requires land, permitting, interconnection work, financing, materials, labor and, eventually, cost recovery.

The draft report does not attach a statewide price tag to that buildout. I think that’s pretty significant.

New Yorkers are being given increasingly specific policy targets, but they are not being given a clear, consolidated accounting of what those targets are expected to cost households and businesses. The policy conversation remains focused on megawatts, emissions percentages and targets that are years away.

Meanwhile, affordability is discussed as an afterthought. For ratepayers, it is most definitely not. It’s the entire point.

One of the report’s most troubling findings involves curtailment.

Curtailment occurs when a generator is capable of producing electricity but cannot deliver it because the transmission system lacks enough capacity. The power is available, but the grid can’t move it where it needs to go.

Under the report’s policy scenarios, statewide renewable curtailment in 2035 could sit between 4% and 14%. Certain areas face much greater risk. In one high-demand scenario, a Northern New York generation pocket shows a 47% curtailment rate.

What would that mean?

Well, New York could spend billions developing renewable projects, utilities and developers could recover those costs through contracts and rates. Great. But then, a significant share of that electricity could be trapped behind transmission constraints.

Ratepayers would not simply be financing power generation. They would be financing power generation that the system can’t use. That’s not an argument against renewable energy. It’s an argument against approving generation, transmission and large new loads as disconnected pieces of policy.

The state has to stop treating construction as the same thing as progress. A project has limited value if its output cannot reach customers.

The report expects new data centers and manufacturing facilities to add as much as 5 gigawatts of concentrated demand during the outlook period.

Where those facilities are located will materially affect transmission needs, congestion and system efficiency. NYISO says placing large loads near available generation or underused transmission can reduce system costs, while poorly aligned siting can require additional infrastructure and reinforcement.

That should become the foundation of New York’s large-load policy.

Communities across Upstate New York are being encouraged to welcome projects marketed as economic development. But a project that consumes extraordinary amounts of electricity can force expensive upgrades far beyond its property line.

The central ratepayer question is simple: Who pays for the upgrades?

It shouldn’t automatically be residential customers or existing small businesses.

Large energy users should be required to cover the infrastructure costs they create, including a reasonable share of upstream transmission and generation needs. They should also face firm development deadlines, financial security requirements, and obviously, consequences if a speculative project reserves grid capacity but never gets built.

Otherwise, the state risks creating another version of the same broken arrangement I have written about before: Private interests collect the upside while the public absorbs the long-term infrastructure risk.

I have argued that utility customers are already being asked to finance investments through the rate base while shareholders receive an approved return. And that’s not even getting into the subsidies handed out by New York State, which are also taxpayer dollars. Everyone should note here that ratepayer and taxpayer are the same thing.

The spending may be necessary, but those billions are not gifts from the utilities. They’re our dollars, prepaid and repaid through bills with financing and profit included.

Adding poorly planned data centers to that structure could make the problem a lot worse.

The report repeatedly emphasizes the continuing need for firm, dispatchable generation — resources that can produce electricity when demand is high and renewable output is low.

Today, fossil-fueled plants provide much of that capability.

In fully zero-emissions scenarios, NYISO’s modeling turns to hydrogen-fueled generation to replace some of that capacity. But the report is blunt: Hydrogen generation is not commercially available at the required scale, and the supporting infrastructure for production, storage and transportation doesn’t exist today.

In one 2044 scenario, the system includes nearly 30 gigawatts of hydrogen capacity. Yet the report projects that hydrogen plants could operate at annual capacity factors below 5%.

That means New York could need to construct an enormous fleet of expensive power plants and an entirely new fuel network primarily as insurance for a relatively small number of critical hours.

Maybe hydrogen becomes viable. Maybe costs fall dramatically. Maybe the infrastructure is built faster than expected.

But “maybe” isn’t a ratepayer protection plan.

Before customers are committed to financing a technology-dependent pathway, regulators should be required to explain the alternatives, cost ranges, technological risks and offramps. New York shouldn’t lock ratepayers into the most expensive route simply because admitting that policy timelines need adjustment is less-than-ideal politically.

The Central East transmission interface — the major pathway carrying electricity from western and northern New York toward eastern and downstate demand — is already a recurring bottleneck.

NYISO estimates annual demand congestion there could rise from roughly $325 million in 2025 to between $2 billion and $5 billion by 2035, depending on the scenario.

Congestion isn’t merely an inconvenience for operators. It means lower-cost electricity can’t reach customers, forcing the system to use more expensive generation elsewhere. Those higher costs flow into wholesale electricity prices and, ultimately, customer bills.

The state therefore faces two different expenses at once.

Ratepayers will be asked to finance transmission upgrades. Until those upgrades are completed, they may also pay higher energy prices caused by congestion. If projects are delayed, poorly coordinated or built in the wrong sequence, customers could spend years paying both.

That’s exactly why regulators should demand measurable outcomes from every major grid investment. Utilities should be required to show how much a project will reduce congestion, improve reliability, unlock generation or lower expected long-term costs.

“We need to modernize the grid” is not enough.

As I wrote recently, New York’s monopoly utilities have spent years blaming aging infrastructure, storms, trees, electrification and growing demand for poor performance. But the infrastructure did not suddenly become old, and growth did not materialize without warning. Ratepayers surrendered competition in exchange for competent planning and reliable service.

They’ve received too many excuses and too little accountability.

New York’s grid must evolve. Pretending otherwise would be dishonest.

But the draft Outlook makes clear that the difference between a manageable transition and an affordability disaster will come down to policy design, project sequencing and cost allocation.

The Public Service Commission should require a public, statewide ratepayer-impact analysis that brings generation, transmission, utility investment, large-load growth and state clean-energy contracts into one financial picture.

Major energy users should pay the incremental costs they create. Utilities should face performance-based consequences when approved investments fail to deliver promised reliability or capacity. Projects should be prioritized based on measurable system value, not political visibility. Regulators should reconsider timelines when the alternative is forcing customers to finance unproven technology or redundant infrastructure.

And every major proposal should answer the question government and utilities routinely avoid: What will this do to a typical customer’s monthly bill?

New York has spent years debating what kind of grid it wants. The harder conversation is about who carries the risk when projects run late, technologies fail, forecasts miss and costs escalate.

Or if electeds simply fail to act.

At any rate, right now the answer appears to be the same group that always carries it.

Ratepayers.

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Last week I sat down with Grace Rice, the former manager of Bob’s Supermarket in Wolcott. The 19-year-old talked about how she became store manager as a teen, and the challenges around running a rural grocery store.