Towns worry about PFAS settlements

By RY RIVARD

07/31/2023 10:00 AM EDT

Good morning and welcome to the Monday edition of the New York & New Jersey Energy newsletter. We’ll take a look at the week ahead and look back on what you may have missed last week.

TOWNS WORRY ABOUT 3M, DUPONT SETTLEMENT PLANS — New York towns were worried about settlement deals over PFAS even before 22 attorneys general urged a federal judge last week to block a $10.3 billion settlement proposal from 3M Co. The attorneys general — including New York’s Tish James and New Jersey’s Matt Platkin — said the proposed deal wouldn’t do nearly enough to resolve claims the company contaminated drinking water supplies across the country with toxic “forever” chemicals.

But three New York towns — two on Long Island and one in the Adirondacks — had already expressed concerns about the 3M settlement proposal and a related $1.2 billion settlement proposal from Chemours Co., DuPont de Nemours Inc. and Corteva Inc. PFAS cleanup costs are estimated to cost many billions more — perhaps hundreds of billions more.

Beyond the objections to the size of the settlements, there are also criticisms of what they cover. They generally cover public water systems but not local governments that also have to deal with and pay to clean up contamination from chemicals at airports and in waterways and drinking water supplies.

If water systems collect their cash first, town officials worry the companies will run out of money before towns have a chance to collect — potentially placing the burden on those municipalities to foot the bill for costly remediation, according to recent legal filings on behalf of Town of East Hampton, Town of Islip, and Town of Harrietstown. Nick Rigano, an attorney for the towns, objected to the DuPont proposed settlement by saying it “wrongfully ignored” the towns.

“This disparate treatment is unwarranted because there is no material difference among these categories of cases,” Rigano wrote in another filing about the 3M proposal.

3M has defended the proposed settlement and argued that it’s “not unusual” for there to be objections to significant settlement agreements. — Ry Rivard

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HAPPY MONDAY MORNING: Let us know if you have tips, story ideas or life advice. We’re always here at [email protected] and [email protected]. And if you like this letter, please tell a friend and/or loved one to sign up.Here’s what we’re watching this week:

MONDAY— Indian Point Decommissioning Oversight Board and Indian Point Closure Task Force holds a public forum, 6 p.m. at Cortlandt Town Hall, 1 Heady Street, Cortlandt, NY 10567 or online.

WEDNESDAY— The New Jersey Board of Public Utilities holds the first of two technical conferences on “the future of the natural gas utility,” 9:30 a.m. - 4:45 p.m. at the Trenton War Memorial and online.

THURSDAY— The New Jersey Board of Public Utilities holds the second of two technical conferences on “the future of the natural gas utility,”, 9:30 a.m. - 4:45 p.m. at the Trenton War Memorial and online.

FRIDAY— New Jersey’s third offshore wind solicitation bids are due, 5 p.m.

— New law to save New Jersey’s first wind farm challenged in court: Protect Our Coast NJ and Defend Brigantine Beach are challenging a new law specifically designed to save Orsted’s Ocean Wind 1 from financial uncertainty for violating the “special” legislation part of the New Jersey Constitution, which generally attempts to prohibit laws designed to aid a single entity. “The Legislature’s giveaway of federal tax credits to Orsted benefits a single company in violation of the New Jersey Constitution,” said Bruce Afran, an attorney for the groups who oppose offshore wind. “In New Jersey, laws that favor a single private party are generally unconstitutional.” According to the attorney, the lawsuit, filed last week, is now pending before Superior Court Judge Douglas H. Hurd in Trenton and is “expected to be briefed and argued later this fall.”

OFFSHORE WIND DELAY, AGAIN: NYSERDA is pushing back awards for offshore wind developers to the last three months of the year, delaying progress on a key component of achieving the state’s climate targets. The New York State Energy Research and Development Authority informed bidders on Thursday that due to a clarification of the RFP they’ll get another opportunity to re-price their bids, though they cannot increase them, only lower or maintain them. The new deadline for bids is August 24.

Greg Lampman, NYSERDA’s director of offshore wind, explained it this way: “It clarifies for the bidders that we can separate packages,” he said. If a supply chain investment plan (SCIP) that has multiple components is proposed by developers, NYSERDA can select certain pieces of that proposal. Lampman declined to discuss the implications of the change. He said it would clarify things for bidders if they did not understand this approach and that may result in a change in price. “If there is an incomplete understanding, then it’s a chance that the competitive process is not playing the way it’s supposed to,” Lampman said. State law also requires NYSERDA to notice the change to the RFP. “If there’s a change in the basis of understanding of how the process works, there’s a chance that the price can change and we’re just affording them the opportunity to make that adjustment,” Lampman said.

The flexibility this approach provides NYSERDA might be key to New York’s effort to capture significant parts of the offshore wind supply chain such as blade or nacelle manufacturing. Such large facilities will likely require multiple commitments from offshore wind developers to buy from them in order for manufacturers to build in New York because of the significant capital investment required. “A purchase commitment proposal can still be eligible for award if it is associated with a SCIP facility that is not part of the award package,” Lampman said. “If an individual investment were only associated with a single bid, the process would be much easier. But in some cases, we have the requirement in bids that are contingent upon having more than one selected bidder.”

The notice states the update will simplify the number of proposals submitted by bidders. NYSERDA got 100 different proposals for eight projects in the first iteration of the process. Some developers “had a bid strategy that included breaking them out, and this clarification results in there being redundant, potentially redundant bids,” he said.

Although the delay pushes awards back to an unspecified portion of the fourth quarter of this year, Lampman noted that the previous target for summer went until late September. (NYC Climate Week ends the day after summer ends, technically.) “I think a lot of people are very interested in the outcome,” Lampman said. “We’re working towards that outcome as efficiently as we can but maintaining the integrity of the process is the most important part.” — Marie J. FrenchBPU DECARBONIZATION PLAN FACES “BAN” CRITICISM, “CHOICE” PRAISE — POLITICO’s Ry Rivard: Amid a political firestorm, the New Jersey Board of Public Utilities on Wednesday gave power companies the option of helping customers switch from gas to electric appliances. The board’s move — called a gas stove mandate by its opponents — was met with attacks from Republicans, South Jersey Democrats and industry groups.

It was a significant but more modest attempt to help Gov. Phil Murphy meet his goal of electrifying 400,000 residential buildings and 20,000 commercial buildings by the end 2030. Utilities charge their customers hundreds of millions of dollars to help fund energy efficiency programs. The board is now encouraging those companies to spend that money on customers who want to get rid of their gas-fired water heaters, space heaters and stoves.

“It’s disturbing that Gov. Murphy is trying to circumvent the Legislature by having the BPU rubber-stamp his plan to transform how millions of New Jersey homes are powered,” said Sen. Anthony Bucco, leader of state Senate Republicans. South Jersey Democrats in competitive districts came out against the BPU’s action and state Sen. Vin Gopal (D-Monmouth) and his running mates issued a press release urging the board to clarify that it was just voting on voluntary incentives.

BPU President Joseph Fiordaliso rejected the anger at the board’s action as lies, misinformation and fear mongering. “With these new incentives, we are encouraging folks to move to energy efficient options — notice I said ‘encouraging folks’ — but let’s be clear, we are not requiring, not mandating anyone to give up their gas stove,” Fiordaliso said. “If that were the case, I would be thrown out of my own house.”

Eric DeGesero, who represents the Fuel Merchants Association of New Jersey and New Jersey Propane Gas Association, called the board vote a “railroad job,” but even though he has led the campaign against mandates, he acknowledged the board action was not a ban on gas stoves. “This is what I would call the non-mandate mandate,” he said.

NY AND NJ OBJECT TO 3M PFAS DEAL — POLITICO’s Annie Snider, Jordan Wolman and Ry Rivard: Twenty-two attorneys general urged a federal judge Wednesday to block a $10.3 billion settlement proposal from 3M Co., saying the deal wouldn’t do nearly enough to resolve claims the company contaminated drinking water supplies across the country with toxic “forever” chemicals.

The move, from both Democratic and Republican attorneys general from 19 states ranging from Hawaii and Texas to New Jersey and NewYork along with two territories and Washington, D.C., comes as public concern about the chemicals is mounting and the Biden administration is preparing to issue first-ever federal drinking water regulations that could cost water utilities and their customers billions each year.

The AGs argue that the proposed settlement could negatively impact their own lawsuits against 3M. For instance, they say that 3M could end up paying far less than $10 billion because of provisions that could require water providers to reimburse the company for certain costs, and could leave water utilities and taxpayers liable for harms stemming from the chemicals. They also argue that the settlement would improperly bind all U.S. water utilities to it unless they opt out. Many utilities don’t yet know the extent of contamination they are facing nor the cost of dealing with it, and it’s unclear yet how much compensation the proposed settlement would deliver to individual utilities.

“While I appreciate the effort that went into it, the proposed settlement in its current form does not adequately account for the pernicious damage that 3M has done in so many of our communities,” California Attorney General Rob Bonta, who led the state coalition, said in a statement.

U.S. District Court Judge Richard Gergel, for the District of South Carolina, is currently weighing whether to sign off on 3M’s proposed settlement, and a related $1.2 billion settlement proposal from Chemours Co., DuPont de Nemours Inc. and Corteva Inc.

NORTHEAST WIND WOES — POLITICOs Ry Rivard and Marie J. French: We take a look at the grim financial outlook for the country’s offshore wind power industry and how it is threatening President Joe Biden’s most important energy plans. The administration is counting on offshore wind farms to produce at least enough power for 10 million American homes by the end of the decade.

Up and down the Northeast — the center of the burgeoning industry — however, energy companies have struggled to finance their projects, going hat in hand to governors and utility regulators asking for more money so they can start building the turbines they have already promised to deliver.

The energy developers’ requests have caused unrest in statehouses and among a public wary of already-rising power bills. But without a dramatic increase in offshore wind capacity, there is no way Biden or two of the nation’s greenest Democratic governors — New York’s Kathy Hochul and New Jersey’s Phil Murphy — can hope to meet their climate change goals.

“This is a pretty fragile time in the offshore wind industry,” said Molly Morris, president of Equinor Wind US, which is developing three projects to serve New York.

BUILDING DECARBONIZATION BACK ON AGENDA — The New Jersey Board of Public Utilities is again set to consider a plan that would encourage building electrification. The board delayed action on the item at another board meeting earlier this month amid opposition from Republicans, traditional industry groups and the state’s ratepayer watchdog. On Wednesday, the BPU is set to take up recommendations that “focus on goals, targets, and performance incentive mechanism, as well as building decarbonization and demand response programs.”

A BPU staff straw proposal aims to use a new three-year energy efficiency program that utilities will have to start next year to decarbonize buildings. Utilities would help customers switch from gas to electric appliances by targeting space and water heating in the residential and multifamily sectors and making buildings electrification-ready. Gov. Phil Murphy earlier this year set a target to electrify 400,000 residential buildings and 20,000 commercial buildings by 2030, which generally means retrofitting them to switch from natural gas to electric heat.

PSE&G, the state’s largest utility, has taken a positive view of Murphy’s goals and of the BPU’s plan. Others did not. Some parties, including the state’s ratepayer watchdog, have questioned whether the BPU has the authority to regulate greenhouse gas emissions, which decarbonization would do indirectly.

To explain a delay in taking up the item, BPU President Joseph Fiordaliso said at a July 12 board meeting, “We’ve gotten an awful lot of stakeholder input, and we want to make sure that we include every aspect of input we’ve received before we have the final order issued.” — Ry Rivard

SCHUMER PUSHES FERC —POLITICO’s James Bikales: Senate Majority Leader Chuck Schumer (D-N.Y.) is urging FERC to significantly strengthen its proposed rules on transmission — an indication Democrats are looking beyond negotiations on the Hill to speed up permitting of the high-voltage lines. Schumer pushed FERC commissioners in a letter on Thursday to finalize a transmission planning rule with cost allocation provisions, including a specific list of benefits that must be considered in cost-benefit analyses. He also pressed FERC to “expeditiously finalize” its rule clarifying the commission’s backstop siting authority when states deny permits for major transmission projects.

Cost allocation and federal backstop authority are among Democrats’ top priorities in permitting negotiations on the Hill, which have slowed since the two sides reached a debt ceiling deal with some regulatory reforms.

Missing from the deal, however, were changes to speed up the permitting of transmission projects, which Democrats see as vital to the success of the clean energy transition. Republicans have indicated they are open to some transmission reforms, but haven’t spelled out what specific policies they would support and are asking for reforms to bedrock environmental laws in return.