By Opeyemi Naimot Dawodu, Legal Intern, Pace Energy and Climate Center
Introduction
The Pace Energy and Climate Center (PECC) is happy to announce the publication of the report, Expanding Municipal Options for Thermal Energy Networks (“the Report”), —developed for Mount Vernon, a municipality in New York State, on strategies for a permitting regime and the potential options for structuring thermal energy networks (TENs). TENs, otherwise called district geothermal, involves the adoption of technologies that use heat pumps to move thermal energy from sources, such as the ground, surface water, wastewater, and waste heat, to provide heating and hot water to one or more buildings. TENs also involve moving thermal energy to sinks, such as the ground, and surface water, to provide cooling to one or more buildings. Thus, TENs are ideal for heating and cooling purposes in buildings.
The goals of municipal TENs projects are to enhance decarbonization efforts, promote cost-effective means of providing heating and cooling to homes, commercial buildings, and industry, as well as promote equitable access. These projects are a critical effort towards the fight against climate change because the energy supply contributes to no less than three-quarters of global greenhouse gas emissions, and the amount of greenhouse gas emissions from commercial and residential buildings from heating and cooling are significant.
Legal Considerations for Developing TENs
It is against this background that PECC has developed the Report, which critically evaluates a myriad of options available to Mount Vernon and other municipalities for implementing TENs in their communities. The report considers affordability as the central goal while also taking into consideration sustainability and equitable access to TENs. The report discusses some key considerations that could potentially affect the affordability of TENs. These considerations include the permitting regime, legal and tax considerations, and business models. A unique feature of the report is that it highlights potential strategies that Mount Vernon and other municipalities in New York can adopt in developing a permitting regime. The report advises Mount Vernon on the most viable options for structuring the permitting regime and how the options impact the project timelines and cost. A permitting regime that is more flexible and less cumbersome is highly recommended for Mount Vernon and other municipalities as this will promote the development of geothermal technologies and reduce energy costs that could be passed onto consumers.
Proposed Permitting Regime for TENs
Specifically, the report proposes a risk-based approach for the permitting regime, which involves categorizing the permits into four types. That is, Types A, B, C, and D. The report suggests that Type A permits would apply to small-scale, closed-loop and low-risk projects. Type B permits would cover more complex closed-loop geothermal pump projects that are low risk but more complex than Type A. Type C permits would apply to open-loop systems while Type D would potentially cover projects with technical risk, a higher degree of complexity and environmental sensitivity. These tiered categorizations help to strike a balance between low-risk and high-risk projects while factoring in the features, complexity, technical requirements, and environmental risks involved. The tiered permitting approach would also enhance the ease of adoption and advancement of TENs while ensuring cost-effectiveness. In the report, PECC also proposes that municipalities facilitate TENs projects through permits and by incorporating federal and state environmental regulations and industry standards. The Report also calls upon municipalities to consult with the New York State Department of Environmental Conservation which is in the process of developing a regulatory framework for TENs that will govern drillers.
Legal/Tax Considerations
On the legal and tax considerations, PECC’s report analyzes the various ways the TENs project can be structured to maximize the tax exemptions, incentives, and ensure efficient pricing. To achieve this, ownership, financing, operation, and revenue generation options are considered in the Report to give municipalities a clear picture of the options, and respective tax consequences. For instance, the Inflation Reduction Act (IRA) has extended the Investment Tax Credit (ITC) to apply to geothermal technologies. Also, PECC’s Report factors in the legal considerations under the New York State Utility Thermal Energy Network and Jobs Act, the Public Service Commission’s (PSC) regulatory roles and how to qualify for PSC regulation exemption, as well as the New York State law governing Local Development Corporations (LDCs).
Business Models for TENs
In addition, the PECC report suggests the adoption of business models, like municipally-owned (not-for-profit) TENs, as this will provide significant economic benefits for consumers, prioritize cost efficiency, and ensure long-term community benefits. Municipally-owned TENs could be structured with complete municipal ownership, which means that the municipality owns, finances, and operates the TEN. This type of model is appropriate for a municipality that has the administrative, financial, and technical capacity to run the TEN. There is maximum cost-efficiency and control in this model. There are other types of models including partial municipal ownership with outsourced services and private or utility-owned TENs with municipal involvement. These models are discussed in the report with particular emphasis on the municipally-owned TENs as the most viable option for Mount Vernon.
Conclusion
Overall, PECC’s focus in the TENs report is to assist Mount Vernon and other New York municipalities in developing geothermal technologies in the most affordable, sustainable, and equitable manner possible. The report’s objectives align with the New York State decarbonization goals as well as Statewide actions to promote energy efficiency in buildings and industries. PECC remains committed to foster, through its projects, the reduction of greenhouse gas emissions.
The report, Expanding Municipal Options for Thermal Energy Networks, can be found here.
The Pace Energy and Climate Center (Center) is happy to announce that Ryan McEnany, one of the Center’s Institute for Energy Democracy Fellows, has been named a New York City & State Trailblazer in Clean Energy. This prestigious honor recognizes New York’s clean energy leaders, including innovative industry figures, groundbreaking policymakers and notable environmentalists and conservationists.
In addition to being an Institute for Energy Democracy Fellow at the Center, Ryan McEnany is the Director of Energy and Resiliency for Pace University. He is forging a path for the University to meet its commitment to become a net-zero institution by 2040. In doing so, he is leading the effort to decarbonize the University and dramatically reduce energy use and carbon emissions while saving $11 million in energy costs to date. McEnany has thus far led the University to a 25% reduction in greenhouse gas emissions and put it on track to achieve a 50% reduction by 2030. One main strategy being deployed is incorporating beneficial electrification through the installation of a 700-ton heat pump, among other energy efficiency projects, into an ongoing renovation at the University’s Manhattan campus that will result in a 60% carbon reduction for the building.
Ryan McEnany’s bio can be found at: https://energy.pace.edu/experts/
By Elizabeth Wescoe, Legal Intern, Pace Energy and Climate Center
Since 2021, the Pace Energy and Climate Center (the Center) has issued 10 regulatory and permitting reviews for feasibility studies developed by Endurant Energy, a leading distributed energy infrastructure developer, in support of thermal energy network (TEN) projects. The Center’s regulatory and permitting reviews advise the developer on how to establish district geothermal energy systems while navigating a complex legal system. Geothermal energy technologies produce heating and cooling for buildings by using a heat transfer system that absorbs thermal energy from the Earth’s subsurface, sewer systems, or surface water.[1]
The Center hopes that its participation in TEN feasibility studies will contribute to the advancement of thermal technologies as an important renewable energy source. The Center’s first nine regulatory and permitting reviews assessed sites in New York State. The latest report, which was finished in January 2025, looks beyond New York State borders and into the Western United States. This expansion represents the technology’s growth in popularity, as well as the Center’s success in aiding developers in building advanced, clean energy infrastructure.
In New York, the feasibility study reports have supported projects that were made possible through the New York State Energy Research and Development Authority (NYSERDA) via the closed Community Heat Pump Systems program (PON 4614).[2] The program has provided funding to “over 50 project sites, that have explored a wide range of technical solutions and business models for thermal energy networks.”[3] Each report has assessed the site’s areas of concern, applicable statutes and permitting requirements, anticipated challenges, potential business models, recommended steps, and authorities with jurisdiction over the project. The reports also address the challenges faced by developers, considering that regulations in New York State are in development.
The Center’s reports have contributed to New York district geothermal projects in Erie County (Silo City), the Bronx (the Peninsula), Queens (Innovation QNS), New Rochelle (Pratt Landing), Flushing Bay (Willets Point), Gowanus, Brooklyn (Gowanus Green), East New York, Brooklyn (Spring Creek Towers), Long Island City (Ravenswood), and Mount Vernon (20 South 2nd Square). With each of these locations came varying local ordinances, policies, and geographic hurdles, making each analysis unique to the area.
The Center’s most recent work is in support of a project site located in the Western United States. This location has a completely different set of applicable state and local laws, most of which focus on the conservation of water in an arid environment. The Center conducted a structured assessment of the Western site akin to its work on the New York projects, by looking at key issues with the location, environmental regulations, recommended steps, and jurisdictional authorities. Unlike New York, the Western State does have some regulation regarding geothermal energy, but it still lacks a comprehensive set of laws to guide developers, making the Center’s feasibility study report an important contribution to the geothermal project.
The Pace Energy and Climate Center’s work on these studies, in collaboration with Endurant Energy has helped to advance the development of district geothermal energy projects by addressing complex regulatory and site-specific issues. The Center’s contribution is particularly important given potential future changes to the regulatory environment for these geothermal projects.
[1] NYSERDA, Overcoming Legal and Regulatory Barriers to District Geothermal in New York State, Final Report (2021).
[2] Community Heat Pump Systems (PON 4614) Projects, https://www.nyserda.ny.gov/All-Programs/Large-Scale-Thermal/Winners (last visited Mar. 8, 2025).
[3] Id.
By Tamika Thomas, Legal Intern, Pace Energy and Climate Center
Going Green with a Charrette
The Pace Energy and Climate Center (PECC), in partnership with the New York State Energy Research and Development Authority (NYSERDA), recently conducted the New York State Thermal Energy Network (TEN) Charrette. The Charette included thirteen (13) workshops with municipalities that addressed topics ranging from the introduction of TEN system technologies to potential business models for TENs that New York State municipalities should consider.
These workshops began in April 2023 and focused on fostering dialogues aimed at developing a shared set of ideas regarding regulatory planning, business model development, and workforce participation. The series of workshops continued until October 2024, engaging participants that included municipal council members, mayors and supervisors, engineers, sustainability directors, and project managers with expert presentations and discussions on what is necessary to facilitate geothermal energy projects at scale. The cooperative approach of this initiative was rooted in the municipalities’ interest in pursuing low-carbon heating and cooling solutions that would offer equitable energy solutions and take advantage of the place-based nature of the technology.
NYSERDA and PECC will produce a Municipal Reference Manual on Thermal Energy Networks to carry forward the lessons learned from the process and sessions to help local governments promote district thermal systems.
Thermal Energy Networks
TENs are large-scale thermal energy systems that use heat pumps to exchange thermal energy between one or more buildings and thermal resources like the ground, surface water, wastewater, and waste heat to provide heating, cooling, and hot water.. They serve as a renewable energy source with the potential to function effectively as a connected heating and cooling system, providing numerous significant benefits. Commonly implemented internationally and by many college, hospital, and institutional campuses across the U.S., these systems can significantly reduce fossil fuel consumption, decrease financial burdens on consumers, and boost community resilience.
The Municipal Reference Manual on Thermal Energy Networks that PECC is drafting in cooperation with NYSERDA will help advance TENs across New York State.
Further Thermal Energy Roll Out
TENs are currently governed by various existing regulatory frameworks, as discussed in the forthcoming Municipal Reference Manual. Municipalities hold the authority to regulate land use, including zoning and permits for geothermal systems. This allows them to incorporate environmental standards and identify potential barriers to implementing TENs. Furthermore, municipalities can define TENs within their zoning codes to promote public land use for TENs development.
The Municipal Reference Manual, being developed by PECC in collaboration with NYSERDA, will also present potential business models for TENs. These models were shaped through rigorous stakeholder engagement and start to highlight differences in financial benefits and outline operational responsibilities. Each business model presents distinct advantages and challenges while being designed to foster economic growth opportunities and enhance community workforce engagement. The business models have the potential to offer municipalities varying ownership structures, from control over system planning to governance, while supporting equitable consumer costs and alleviating energy-burdened communities of inequities.
Collaboration with non-profit organizations is another option, providing benefits such as tax-exempt status, transparency in competitive bidding, and a cost-effective procurement process that benefits buyers and sellers. Engaging private entities, local development corporations, and municipalities is another model that reduces a municipality’s financial burden while increasing access to federal and state incentives. By aligning operational capacity – resources, infrastructure, expertise, and processes – with local clean energy goals, municipalities can effectively integrate TENs into their long-term sustainability framework and planning. Thermal Energy Networks have potential to support a clean, resilient, and energy-efficient future by factoring regulatory approaches into an operational model that aligns with community needs.
Through initiatives like the Charrette, PECC supports municipalities in navigating regulatory landscapes and adopting innovative thermal energy solutions. The Charrette process prioritized listening to the voices of municipal stakeholders to help address their needs and enable their support of thermal energy solutions in their community. The nearly two-year process helped identify barriers, such as funding limitations and policy constraints, while considering the expectations of the municipalities. The roles of PECC and NYSERDA in implementing sustainable thermal energy will foster a cleaner, more equitable, and energy-efficient community rooted in collaboratively driven solutions.
The Pace Energy and Climate Center is pleased to announce that on Tuesday, April 22, 2025, Joseph Siegel, the Center’s Interim Executive Director, will join other climate change experts for the Sixth Annual Earth Day Climate Change Symposium of the New York State Bar Association. The virtual Symposium will cover developments in state climate change law, federal rollbacks on climate change in the Trump Administration, and corporate considerations on ESG requirements and risks posed by climate change. Siegel will cover climate change updates specific to the U.S. Environmental Protection Agency.
Joining Siegel on the panel will be Basil Seggos, former Commissioner of the New York State Department of Environmental Conservation and graduate of Elisabeth Haub School of Law, who will discuss state climate change developments. Other panelists include Michael Gerrard, Founder and Faculty Director of the Sabin Center for Climate Change Law at Columbia Law School, and Linda French, Global Head of Sustainability Policy & Regulation at JPMorgan Chase. & Co.
Details and Registration:
Tuesday, April 22, 2025 | 9:00 – 11:00 a.m. Eastern Time | 2.0 MCLE Credits | Webinar
Registration Link: https://nysba.org/events/sixth-annual-earth-day-climate-change-symposium/
The Pace Energy and Climate Center is happy to announce that four Elisabeth Haub School of Law student interns have joined the Center for the Spring 2025 semester. The interns, Opeyemi Naimot Dawodu, Tamika Thomas, Elizabeth Wescoe, and Brooke Wood, will be working on a broad set of issues including district geothermal codes and associated municipal permitting, thermal energy networks, expanded use of geothermal by municipalities, and related training to be offered by the Center. They will also be researching legal approaches to improving indoor air quality in underserved communities, opportunities under the United Nations Framework Convention on Climate Change and other international agreements to advance conflict resolution and collaboration on the climate crisis, and strategies to mediate domestic multi-stakeholder conflicts on renewable energy.
The interns will conduct research and writing, attend meetings, and assist with the ongoing work of the Center. The interns bring to the Center a range of experience and backgrounds, and we are very grateful that they have joined us. Their bios can be found here.
