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Q&A
Discussion on Champlain Hudson Power Express (CHPE) project and its impact on electricity costs
0:32:25
ยท
3 min
Council Member Restler and Deputy Commissioner Barakat discuss the Champlain Hudson Power Express (CHPE) project and its potential impact on New York City's electricity costs and sustainability goals.
- The city is expected to be the anchor purchaser of renewable energy from CHPE
- DCAS clarifies that CHPE will initially increase costs due to it being a renewable energy credit (REC) purchase
- Potential Canadian tariffs on electricity are discussed, with DCAS noting the situation is fluid and uncertain
- The project is still on track to be completed by spring 2026, despite potential challenges
Lincoln Restler
0:32:25
So I mean I'll just I'll do a slight preamble.
0:32:29
Decas purchases 3,900,000,000 kilowatt hours of electricity annually for city buildings.
0:32:34
48.7% of our energy use is of course electricity.
0:32:38
As we work to meet our sustainability goals, we'll be relying even more on electricity and a major part of our plan to lower electricity cost is reliant on the Champlain Hudson Power Express Chippy, which is scheduled to be coming online in May of twenty twenty six.
0:32:52
Indeed, the city of New York is expected to be the anchor purchaser of this renewable energy flowing into New York City.
0:32:59
I've been a supporter of Chippy.
0:33:01
My mom grew up in Quebec in Montreal.
0:33:04
I know that not everybody up there is as enthusiastic as I am, but I think it's a very worthwhile project and a good thing for the city of New York.
0:33:15
How much does DCAS expect Chippy to lower electricity costs?
0:33:20
Have you been able to model that?
Sana Barakat
0:33:22
So the Chippy actually is going to be a wreck purchase.
0:33:26
So it is going to be an increase in cost.
0:33:29
But the benefits of course are beyond the financial.
Lincoln Restler
0:33:34
And I've been asked, you're not the first person I've asked this question at preliminary budget hearings.
0:33:39
Think you're the third, but I haven't gotten a good answer yet, so we'll see if today's the day.
0:33:44
Have you begun discussing with colleagues internally the impacts of the potential Canadian tariffs on the city's electricity bills and what the potential costs will be for us?
Sana Barakat
0:33:55
Yes.
0:33:56
As you know, the situation is very fluid at this point, right?
0:33:59
And even the state issued a report saying the same thing.
0:34:03
There's a
Gale A. Brewer
0:34:03
lot of
Sana Barakat
0:34:03
unknowns.
0:34:05
And the big part of it is that it's not even certain that electricity sales will be part of the tariff.
0:34:13
But if it does, it's not affecting the the construction of It is still on track to be completed by the spring of twenty twenty six.
Lincoln Restler
0:34:22
Right.
0:34:22
And as I said, I think it's a good thing that we're doing that we've prior we are the anchor purchaser for Chippy and that we've supported this.
0:34:29
And I think the City Of New York's leadership from the previous administration in advancing this has been instrumental in it happening.
0:34:35
But as you noted, it will lead to an increase in costs.
0:34:38
And if there's a potential 25% tariff that's imposed on this electricity, which is a very real threat, it could be a major challenge for our electricity budget at DCAS.
0:34:51
Is that right?
Sana Barakat
0:34:52
It does increase the cost, but at the same time we were doing all these other things that help reduce the cost including demand response, right, and energy efficiency project which are, you know, with the goal to reduce energy consumption.
Lincoln Restler
0:35:08
Can I ask just like, have you been consumption?
0:35:17
Can talking to OMB, to state legislative affairs, the governor's office, federal affairs about the impact that these tariffs could have on this project and electricity costs for the city?
0:35:22
Are we sounding an alarm bell that this could be severely problematic for the city's finances?
Sana Barakat
0:35:27
Our understanding it's not going to be significantly affecting the pricing.
0:35:33
The report came out actually two days ago from the state saying that it's saying the same.
0:35:38
But we continued the discussion with OMB.
0:35:40
And as we get clarity on what the tariff looks like, of course we're going to continue the discussion and see the impact there.
Lincoln Restler
0:35:48
Great.