A fight between Con Ed and developers is slowing NYC’s battery buildout

It’s already hard to build grid batteries in New York City. But now, an increasingly hostile dispute between the utility Con Edison and energy-storage developers is making it even harder.

The two sides agree that ​“community-scale battery projects” — bigger than those that back up a home but smaller than most grid-scale installations — could seriously improve reliability and affordability for New Yorkers.

But they disagree on how those batteries should be managed, and on how the financial rewards for the services they provide to the grid should be parceled out.

Private energy-storage developers who have been cut off from plugging into Con Ed’s grid for the past year say the utility is unfairly tilting the playing field in its own favor.

In August 2025, Con Ed abruptly changed the rules for nearly 600 megawatts of third-party battery projects seeking to interconnect to its grid. Then in November, the utility issued a new interconnection policy that developers say dramatically raised the costs they would have to pay to interconnect, by as much as fourteenfold in some cases.

That’s according to a petition filed in March with the New York Public Service Commission from the New York Battery and Energy Storage Technology Consortium (NY-BEST) and the New York Solar Energy Industries Association (NYSEIA). The groups say Con Ed’s changes have effectively made it impossible to move ahead with roughly $1.5 billion in battery-project investment. They also accuse the utility of circumventing proper regulatory procedure to impose these restrictions and are asking the commission to force the utility to revert to its former rules.

“It’s just unacceptable for a regulated utility to operate like this,” said New York City Council member James Gennaro, a Democrat who chairs its Committee on Environmental Protection and Waterfronts. ​“We’re looking to get to the bottom of this because we want battery storage to progress. This is good for the grid, it’s good to reduce our dependence on peaker plants, it’s good for everyone.”

In a March letter, environmental groups and city and state elected officials, including Gennaro, called on the commission to force Con Ed to ​“roll back these unilateral and unwarranted changes.”

Con Ed says the changes are about preserving grid reliability and preventing a flood of third-party batteries operating outside of utility control from driving up costs to its customers. It is asking regulators to approve a plan that it says will better align the way that these batteries charge and discharge with the needs of its increasingly strained grid.

“We think storage is important for the clean energy transition,” said Raghu Sudhakara, Con Ed’s vice president for distributed resource integration. ​“But it has to be sited in the right location, it has to come online at the right time, and it has to operate under the right operating conditions.”

The dispute is creating roadblocks just when New York City needs all the resources it can get to meet peak electricity demand during heat waves. In fact, the utility’s latest reliability contingency plan, filed with regulators in July, identified the need for 125 MW of ​“clean and non-emitting” capacity in New York City by 2033. That plan ​“named energy storage as a primary resource,” said Claudia Villar-Leeman, NY-BEST’s senior director of policy and regulatory affairs.

Environmental justice groups are also pushing for batteries to help replace fossil-fueled power plants that are polluting low-income neighborhoods. In light of those pressures, Con Ed’s actions to block battery developers are ​“frustrating, because batteries should be able to avoid the need for these infrastructure upgrades rather than causing them,” she said.

Fact-checking Con Ed’s claims of a looming battery-caused grid emergency 

Con Ed argues that its new rules and interconnection charges are needed to prevent third-party batteries from overwhelming its grid. In the past two years, the number of interconnection requests for battery projects of 5 MW or less have increased about threefold, and now add up to nearly 2.5 gigawatts, Sudhakara said.

If all those batteries are allowed to plug in and start charging at once, they could pull more power than sections of Con Ed’s grid can handle, the utility warned. And because it doesn’t directly control these third-party batteries, Con Ed argues that it has no way to prevent that from happening.

But battery developers and trade groups say Con Ed’s argument relies on worst-case scenarios and ignores the flexibility of energy storage systems.

“We have utility planners taking our most flexible resource and treating them as if they’re completely inflexible,” said Noah Ginsburg, NYSEIA’s executive director. ​“If your starting point is false assumptions about the flexibility of the resource you’re dealing with, you’re not going to get a positive outcome.”

Those assumptions bother Adam Cohen, chief technology officer and co-founder of NineDot Energy, a community battery developer that runs six community battery sites and has more than two dozen others in development in New York City.

Con Ed’s analysis ​“assumes batteries will charge in an inflexible manner, from midnight to 8 a.m., with no day-by-day variation, and at a fixed charging rate,” Cohen said. If all those batteries did charge that way, they could indeed overload certain parts of the grid, he said.

But batteries can be controlled to avoid these kinds of problems, Cohen said. An April study by analysis firm Danovo Energy Solutions, commissioned by NineDot, found that Con Ed could use technical approaches now available to its grid operators to nearly double hosting capacity.

A similar study published in May from NYSEIA, NY-BEST, and the Electric Power Research Institute, a prominent utility research organization, found that active management could significantly increase capacity for community-scale battery projects on Con Ed’s grid.

These aren’t pie-in-the-sky grid management concepts, said Meghan Nutting, vice president of regulatory reform at the nonprofit Interstate Renewable Energy Council. Utilities are using these ​“flexible interconnection” approaches to streamline the grid interconnection of electric vehicle charging depots in California and community solar projects in Illinois. In fact, Con Ed itself does this with solar and battery-equipped electric bus charging sites in its service territory.

“The assumption that these are stupid resources that all do the worst things at the same time is uninformed,” she said. ​“You can put rules around when batteries can draw from the grid or discharge to the grid.”

Utility control versus third-party competition 

Though this fine-grained control is possible, Con Ed says current state regulations prevent it from exercising that control.

In New York state, community solar and battery developers are able to connect to utility grids under a ​“value of distributed energy resources” (VDER) structure, which sets the price that project developers are paid by utilities for the energy they provide to the grid. Under the VDER rules, battery developers choose when they charge and discharge to maximize their revenue — and while their choices may align with what local grids need for reliability at times, they may diverge from those grid needs at others, and perhaps in hard-to-predict ways.

Battery developers in New York are prepared to work with Con Ed to revamp these rules to better match grid needs to VDER values, NYSEIA’s Ginsburg said. But so far, the utility has refused to engage in those efforts, he said.

Specifically, Con Ed and other utilities in the state have declined a request from the New York Public Service Commission to propose revisions to the VDER tariff. Such changes could align third-party battery incentives to being dispatched in ways that could defer the need for costly grid upgrades, he said.

“Our state regulatory agency asked the utilities, ​‘Give us tariff language to make these VDER resources more valuable from a reliability perspective.’ And the utilities said, ​‘We’re not going to do that,’” he said.

Con Ed and other New York utilities dispute that characterization. In a joint filing with the commission, they argued that the changes to the VDER tariff sought by NYSEIA and other parties representing battery developers could end up costing utility customers more than the traditional grid upgrades that battery storage is meant to avoid.

In the meantime, Con Ed is asking regulators to approve an alternative plan to avoid driving up costs for customers. Its idea is to largely replace VDER compensation for third-party battery projects with a more utility-controlled approach called Reliability Asset Dispatch Rights (RADR).

Under RADR, developers wouldn’t operate their batteries to maximize their moneymaking potential. Instead, Con Ed would enter into long-term contracts to reimburse those batteries for the cost of the energy they pull from the grid and for the cost of grid upgrades to enable their projects.

Con Ed predicts that this utility control could avoid the risk that third-party batteries operating on their own schedules will drive up customer costs without delivering benefits. But importantly, Con Ed is asking to earn a regulated rate of return on those RADR expenses, bringing these batteries more closely into the realm of capital assets like poles and wires. VDER’s third-party tariff structure was designed explicitly as part of New York State’s decade-long utility regulatory reform effort to find alternatives to the utility rate-base model.

NYSEIA has yet to issue an official position on the RADR proposal. But Ginsburg said he believes that Con Ed would better serve its customers and the third-party battery developer community by reforming the system already in place rather than launching a new utility-centric alternative.

Meanwhile, New York utilities are lagging well behind on both the state’s recently watered-down renewable energy targets and its goal of building 6 GW of energy storage by 2030, he said.

It’s important to note that third-party battery developers aren’t necessarily incentivized to operate their batteries in a way that minimizes cost impacts to Con Ed customers. ​“I appreciate that Con Edison is a business, just like the members of my association are businesses,” Ginsburg said.

Still, ​“the theoretical risk of overbuilding at some point in the future takes second fiddle to the fact that we need deployment, and we’re not getting it at the scale and pace necessary,” he said. ​“The question for regulators is, is there a better way to align incentives?”