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NYPA Sells More Than $608 Million In Green Bonds To Support Grid Expansion

April 29, 2022

by Paul Ciampoli
APPA News Director
April 29, 2022

The New York Power Authority (NYPA) has sold more than $608 million in green bonds to finance capital expenditures related to its development of electricity transmission in New York State.

NYPA said that the bond sale supports its VISION2030 strategy to expand the transmission of renewable energy throughout New York and the creation of the future digital grid while meeting the objectives of the state’s Climate Leadership and Community Protection Act and Governor Kathleen Hochul’s State of the State initiative to issue green bonds to benefit the transformation of the state’s electric grid.

The green bonds, which are specifically earmarked for the development of transmission assets, will accelerate NYPA’s progress toward the state’s clean energy and climate goals, including the mandate to obtain 70% of the state’s electricity from renewable sources, as identified in the Climate Act.

The bond sale marks the first time in NYPA history that it has issued a 100% green bond to only support revenues derived from specific projects and not NYPA itself.

Sustainalytics, a company that rates the sustainability of companies based on their environmental, social and corporate governance performance, has also provided a second party opinion on the green bond designation.

 The increase in capital will directly support the development of two ongoing large transmission projects:

  • Smart Path, a $484 million project to improve 78 circuit-miles of transmission from Massena in St. Lawrence County to the Town of Croghan in Lewis County enabling transmission from clean energy projects in the North Country into the grid and to load centers;
  • Central East Energy Connect, a $210 million project that includes the construction of more than 90 circuit-miles of new 345 kV and 115 kV transmission lines and two new substations between Marcy in the Mohawk Valley and New Scotland in the Capital Region.

The bond sale included approximately $600 million of tax-exempt Series 2022A Bonds and was completed on April 14. The interest rate that NYPA priced is 3.62 percent, which is the lowest rate of any bond ever issued by NYPA.

As a result of the NYPA’s retail marketing efforts, 50 percent — more than $300 million — of the bonds were sold to retail investors. The rating on the bonds was affirmed in March with an A1 from Moody’s, AA from S&P and AA- from Fitch.

NYPA owns approximately one-third percent of the high voltage transmission lines in the state.