New York’s energy transformation continues despite the recently enacted and proposed federal changes affecting the industry. The U.S. House of Representatives recently passed a federal budget package that includes significant provisions affecting clean energy investment and tax policy, though the final scope and timing remain uncertain as negotiations continue in the U.S. Senate. While the outcome of federal action may ultimately influence market dynamics, New York remains focused on advancing its regulatory and infrastructure priorities. With the Climate Leadership and Community Protection Act (CLCPA) setting nation-leading clean energy targets of 70% renewable electricity by 2030 and 100% zero-emission electricity by 2040, the regulatory landscape is adapting to support the pace and scale of development.
This focused update is on four key areas: the expansion of utility-scale renewables, the buildout of grid-supporting storage, updates to NYISO’s interconnection process, and the rise of natural gas within the regulatory landscape. These topics reflect both the momentum and the complexity of project planning in New York.
1. Progressing Renewable Energy and Transmission
To maintain progress toward CLCPA goals, New York is rapidly advancing its utility-scale renewable energy portfolio. Recently, NYSERDA announced over 2.5 MW of Tier 1 REC contracts that were finalized to support solar, onshore wind and hydropower projects. Additionally, these recent solar projects include a mix of brownfield redevelopment and agrivoltaic installations, reflecting a growing emphasis on dual land uses and sustainable siting practices. These projects are expected to create more than 1,900 near-term, family-supporting jobs and generate more than $6 billion in private investment while reinforcing the State’s commitment to the development of locally produced clean energy and maintaining grid resiliency. At the permitting level, the Office of Renewable Energy Siting (ORES) has made measurable progress since it began reviewing all projects 25 megawatts or larger, and as of May 2025, over 20 siting permits have been issued under Article 94-c.The State’s permitting framework has also been strengthened by the Renewable Action Through Project Interconnection and Deployment (RAPID) Act, which expands ORES’s jurisdiction to include major transmission infrastructure under Public Service Law Article VIII. By consolidating environmental review and permitting for both generation and transmission projects, the RAPID Act aims to implement a more integrated and efficient approval process, which is critical for aligning project development schedules with CLCPA objectives.
To support its long-term clean energy goals and reduce reliance on fossil peakers, New York is also expanding transmission infrastructure to deliver renewable power from upstate wind and solar regions, as well as offshore wind injection points on Long Island, to load centers across the state. These investments are aimed at improving system reliability and unlocking access to zero-emission power from Buffalo to the New York City metro area.
2. Reliability in Reserve: Bulk Storage
Recognizing that an electric grid supplied by a significant amount of renewable generation must also be reliable, New York has doubled its energy storage target to 6 gigawatts by 2030, with a longer-term goal of 17 gigawatts by 2050. Storage will be essential to replacing fossil peaker plants, managing peak winter demand from electrification, and supporting the integration of intermittent wind and solar. On March 21, 2025, the New York Public Service Commission approved NYSERDA’s Bulk Energy Storage Program Implementation Plan, with key modifications including project maturity requirements, standardized efficiency factors, and a pricing approach for long-duration storage. The plan also confirms that two-hour resources remain eligible for potential contract awards, in addition to longer duration energy storage.
To advance deployment of its Bulk Energy Storage Program Implementation Plan, NYSERDA will conduct three future competitive solicitations, each targeting 1 gigawatt, beginning no later than June 30, 2025. Procurements will use the Index Storage Credit (ISC) mechanism, modeled after Index RECs, which compensates developers for the difference between a Strike Price and a market-based Reference Price. Each round will reserve at least 20 percent for long-duration storage (eight hours or more), with a geographic emphasis on New York City and Long Island, where grid constraints and peaker plant retirements are most prevalent. Inflation adjustments between award and construction will also be permitted.
Prior to finalizing the ISC solicitation, NYSERDA has issued a Request for Information on the Draft ISC RFP, with stakeholder comments due by May 29, 2025. The draft ISC RFP outlines requirements for a detailed Project Development Plan, which must include permitting status, site control, interconnection readiness, environmental impact summaries, and a schedule showing commercial readiness by the end of 2030. Supporting materials such as field studies, shapefiles, local approvals, and system schematics are also required, reflecting NYSERDA’s emphasis on project viability and permitting in shaping the state’s next major clean energy procurement.
3. Unlocking the Queue: Interconnection for New Projects
As New York ramps up clean energy development, timely and coordinated interconnection has become a defining challenge. In April 2025, the New York Independent System Operator (NYISO) launched a new cluster-based interconnection process, replacing the traditional first-come, first-served model. This updated framework groups projects by location and timing, enabling more efficient studies, clearer upgrade planning, and faster paths forward for viable proposals. The changes align with FERC Order 2023 and New York’s CLCPA goals.
More than 240 projects are now advancing through Phase 1 of the new process, highlighting both developer demand and system constraints. The approach introduces earlier requirements for site control and financial commitment, reducing speculative applications and improving project readiness. For permitting professionals, the new process offers clearer timelines and stronger alignment between interconnection, environmental review, and project financing. As the grid evolves to accommodate more wind, solar, and storage, this efficiency will be critical to advancing projects in lock step with reliability needs and policy mandates.
4. Natural Gas, Reliability, and the Transition
New York continues to phase out fossil fuel generation, with a focus on retiring aging, high-emission natural gas-fired peaker plants, particularly those located within environmental justice communities. The State’s “Peaker Rule” (Part 227-3), issued by the New York State Department of Environmental Conservation (NYSDEC), imposes nitrogen oxide emission limits that have already led to several plant retirements in New York City and on Long Island in 2023 and 2024. Additional retirements are anticipated; however, system reliability remains a significant limiting factor. In 2023, the NYISO determined that four New York City peakers, Gowanus 2 and 3, and Narrows 1 and 2, must remain operational past their planned May 2025 retirement to prevent a projected 446-megawatt capacity shortfall. These units have been designated for continued operation through May 2027, with a possible two-year extension, reflecting the ongoing tension between decarbonization goals and system reliability requirements.
At the same time, natural gas infrastructure continues to factor into New York’s regulatory landscape. In February 2025, NYSDEC approved air permits for the Iroquois Enhancement by Compression (ExC) project, enabling increased compression capacity at their existing Athens and Dover compressor stations. While the DEC acknowledged that the project was not consistent with the greenhouse gas emission limits under the CLCPA, the permits were granted following a determination by the Department of Public Service that the project was essential for maintaining safe and reliable natural gas transmission service to downstate gas customers. As a condition of the approval, Iroquois is required to invest $5 million in greenhouse gas mitigation efforts, including support for heat pump adoption and installation of new electric vehicle charging infrastructure in affected and nearby communities.
Recently, the federal administration lifted a month-long stop-work order on Equinor’s $5 billion Empire Wind offshore wind project off the coast of New York. The project stoppage, initiated in April, was reversed following negotiations with Governor Hochul that may also facilitate the siting and permitting of new natural gas transmission infrastructure within the State. Governor Kathy Hochul welcomed the decision, stating, “I’m pleased that President Trump and Secretary Burgum have agreed to lift the stop work order and allow this project to move forward.” While it remains to be seen whether midstream gas transmission companies attempt to advance new natural gas projects there, Governor Hochul emphasized New York’s commitment to collaborating with the federal government and private entities on energy projects that comply with state laws, aiming to ensure reliability and affordability for consumers.
5. Conclusion: Permitting at the Center of New York’s Energy Transition
Permitting sits at the center of New York’s clean energy strategy, connecting the State’s policy goals with the needs of infrastructure delivery.
In this environment, our role at Epsilon extends beyond permitting support – we are a strategic partner with our clients to ensure the advancement of project development. Epsilon helps our clients anticipate and react to regulatory shifts, align with state and regional policy priorities, and permit projects in a cost effective and schedule-driven manner.
Epsilon understands how to navigate complex projects through New York’s evolving regulatory landscape, ensuring they are grounded, defensible, and positioned to succeed.
About the Expert
For more information about New York’s energy transition process or how Epsilon can assist with your energy development projects, please contact our New York practice lead, John Zimmer, at jzimmer@epsilonassociates.com.
Sources:
NYISO Reliability Assessment, reported in Utility Dive. https://www.utilitydive.com/news/nyc-peakers-planned-2025-retirement-remain-online-reliability-must-run-nyiso/700417/
NYSDEC Iroquois ExC Permit ApprovalDPS Letter;News10 Coverage: DEC Approves Iroquois Pipeline Expansion