A Sewer Socialist Proposal for the Climate: PowerNYC
· Jacobin
Two years ago, then Assemblymember Zohran Mamdani launched his campaign for mayor with a series of on-the-street interviews of Donald Trump voters on Fordham Road in the Bronx. In the course of the following year, the cost-of-living crisis solidified as the uniting theme of his mayoral campaign, anchored by a clear agenda to bring costs down and build a city where New Yorkers can “afford to dream.” Last week, a big tent of Democratic politicians used this same message to rout the Right across the country — potentially opening the door to a new kind of politics that embeds climate action within economic populist agendas.New York City is already providing a governing framework for legislators across the country seeking to translate campaign slogans into material improvements for working-class people. Through initiatives like discounted groceries at municipal grocery store pilots and a public stake in New York University’s Quantum Institute, the Mamdani administration has begun to demonstrate that the public sector can and must play a critical role in tackling the affordability crisis and meeting people’s everyday needs.In this approach, Mayor Mamdani is drawing on a rich history of public ownership in the United States catalyzed by the New Deal. But in the modern era, we can only ensure that all New Yorkers can “afford to dream” if we tackle the climate crisis — a core driver of economic instability, high costs, and the foreclosure of a stable future.A new report from Climate and Community Institute, Public Renewables Project, and Public Power NY, PowerNYC Development Corporation: The Case for a Public Renewable Developer in New York City, lays out a clear path for New York City to lead on climate action. Drawing on a New Deal–inspired approach to the energy sector, authors Jason Kowalski and Johanna Bozuwa make the case for New York City to take charge of its own energy future via a city-owned development corporation called PowerNYC. By rapidly deploying solar, battery storage, and thermal energy networks (TENs) across the five boroughs, PowerNYC would accelerate decarbonization to lower utility bills, ensure more reliable service, and phase out the fossil fuels driving the combined affordability and climate crisis.Since the New Deal era, public development has built systems to service common needs from international airports to water and sewage systems across the country. Many of these systems still stand as durable remnants of a more ambitious era of governance.PowerNYC Development Corporation applies this formula to twenty-first-century needs: it would leverage the public sector’s ability to coordinate and plan at scale to create a glide path for renewable energy projects that might otherwise languish in the limbo of private markets. Such an institution would fill a clear gap in New York City’s renewable energy landscape, delivering climate and economic benefits in the form of lowered emissions and utility savings.Overlapping Energy CrisesNew York City currently faces multiple overlapping energy system crises that are on track to get much worse in the coming years.First, utility rates are becoming unaffordable for New Yorkers, who are now paying 11 percent more for their electricity bills than they did just last year, largely due to the costs of fossil fuel infrastructure and volatile natural gas prices. Second, the city’s supply of energy is constrained by an outdated grid, power plants reaching the end of their lifespan, and lack of needed transmission lines to bring renewable power from upstate New York, leading to blackouts in the summer and even higher risk of service interruptions in the future. Third, the cascading effects of fossil fuel generation threaten the well-being of New Yorkers through dangerous air pollution and increasingly catastrophic weather events.To address these crises requires tackling the root cause of continued reliance on volatile fossil fuel markets and transitioning to green energy sources.To date, the state has relied chiefly on market incentives to spur renewable energy development, but this strategy has fallen well short of meeting the state’s climate targets. And New York City has fallen way behind the rest of the state, with 90 percent of downstate electricity still coming from fossil fuels rather than renewables.The technology to tackle such challenges exists, and renewable energy provides a cheap and clean alternative to polluting fossil fuels. But bringing projects themselves into fruition faces technical, bureaucratic, and cost barriers. Thousands of viable sites for clean energy projects scattered across public schools, hospitals, affordable housing, and other sites are currently underutilized due to the significant amount of time, expertise, and up-front resources required to turn a promising site into an operating clean energy project. Clean energy development is rarely a core competency of institutions or organizations with other primary purposes. While some of this market is served by private developers, navigating transaction costs, small project sizes, complicated sites, and other requirements and economic considerations often means such projects are deprioritized in the short term.The burden of such delays falls on ratepayers and the public. This summer, heat waves overwhelmed the grid and left thousands of New Yorkers without power during the hottest days of the year. With winter temperatures around the corner, heating oil costs have risen nearly 70 percent since last year. Too often, working-class households are forced to choose between keeping themselves safe or paying their utility bills — even as the climate collapses around them.We are now facing a stark choice: continue business as usual and suffer the consequences, or embrace a new approach that mobilizes the economic strength of the public sector to ensure the job gets done. As timelines for implementation of Local Law 97 (which mandated strict caps on emissions on large buildings in New York City), broader climate mandates, and escalating climate chaos loom, the city needs a public developer like PowerNYC to rapidly expand the deployment of green technology to electrify existing systems.Introducing PowerNYC Development CorporationPowerNYC would use its position as a public developer to create a financially self-sustaining engine of decarbonization for New York City. While many of the component parts and projects exist across agencies and other institutional actors, PowerNYC would consolidate the support available at various levels and provide a means to ensure renewable energy projects move from the page to implementation.One major benefit of PowerNYC would be its ability to recycle capital to create a financially self-sustaining engine of decarbonization. After initial capitalization, its ownership of revenue-generating assets would allow it to back funding for further rounds of development. Applying this model to thermal energy networks and other green technologies would leverage the power of aggregated planning to ensure the public sector can tap into the same low-cost revenue sources from which private utilities already benefit.For example, through PowerNYC, deploying battery storage across the five boroughs would allow the city to package a fleet of batteries’ worth of power to sell back to the electricity grid at peak demand times to displace the fossil power on which the city currently relies. The contract for such a deal could then be leveraged to secure further financing for ongoing development of renewable energy assets.By accessing long-term, low-cost, stable financing, public developers like PowerNYC can unlock the potential for large-scale infrastructure projects while ensuring benefits are democratically distributed. Instead of taking a project-by-project approach, it would maximize the government’s ability to coordinate at scale with the goals of multiplying affordability benefits for ratepayers and expediting urgent climate action.Research shows that deploying an initial 200 megawatts of distributed batteries alone via PowerNYC could generate New York City’s Con Edison ratepayers at least $170 million of savings annually by lowering capacity market costs and distribution costs. And publicly developed thermal energy networks, an alternative to gas pipe replacement, could create savings for National Grid customers in Brooklyn, Staten Island, and Queens who are currently paying for unnecessary gas infrastructure investments. Over time, its development mandate could expand to other clean energy and grid infrastructure needed to support decarbonization and affordability.A Green Era of Public Institution-BuildingNo single city or even country can take on the planetary scale of the climate crisis alone, but the establishment of PowerNYC is a major opportunity for the largest city in the country to chart a new era of public institution-building to rapidly scale up climate ambitions.Cities and states across the country have already embraced the potential of green public development. Nearly a decade ago, the Connecticut Green Bank established a similar, successful model for solar that has driven the state to the top of the national list for its percentage of public schools with on-site solar projects. Countries from Costa Rica to Denmark are using strong networks of public institutions to accelerate the planning and development of public power.Public development is a proven method for bringing public goods to fruition. PowerNYC would use it to accelerate the deployment of green energy systems and begin to fix our toxic, cost-burdening energy system.This article originally appeared in Jacobin, a democratic socialist magazine publishing long-form essays and analysis on politics, economics, and culture. Subscribe to the print edition for $20 a year.
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