A shortage of available electricity in downtown Canandaigua has forced developers to pause their plan to convert a long-vacant building into dozens of new apartments.
“That's pretty scary. That’s the middle of the city of Canandaigua,” said Ryan Davis, director of economic development for Ontario County.
The project would put 52 apartments into the imposing Labelon building on Chapin Street.
“It's the type of development that we want to do, you know? ... That would be a trophy project,” Davis said, and a big deal for downtown businesses. “And now we're kind of just waiting to find out.”
A utility study is wrapping up that should identify what is needed — potentially adding millions of dollars to the project cost.
The power shortages are not limited to the city of Canandaigua. A 650-unit Uptown Landing development on the north edge of the town of Canandaigua is also stalled. So is a townhouse development in Farmington. Elsewhere, the lack of available power has blocked new housing in Brighton and commercial development in Henrietta.
“It's tough to define what ones were missing, because we may not know yet,” Davis said of residential, commercial and industrial development. “You look at that list ... of all the development in Farmington and Victor and Canandaigua, what I do know is some of them are going to be affected. We just don't know to what level.”
Rochester Gas and Electric and New York State Electric and Gas are seeking a double-digit rate increase, promising to invest billions in upgrades. But it's a dynamic system, and there isn’t an easy fix.
Just adding capacity, like with a large-scale solar project in the middle of the county, wouldn’t solve it, Davis said: "You’ve got to get it onto the grid.”
And there are problems there, too.
“This is a multi-pronged issue," Davis continued. “It's power production, it's transmission and distribution. And it seems like there's not a lot of parts in Ontario County where one of those issues isn't a problem.”
While not backing the rate hike, the Ontario County Board of Supervisors last week demanded RG&E and the state prioritize their area for infrastructure investment.
A new era
Concern over capacity issues and available electricity have been percolating for years. But this is a dynamic system. It wasn’t until Henrietta lost a major commercial project a few years ago that Davis and others started looking at it as a regional concern.
Problems arose in Farmington soon after.
“Most developers have been operating under the assumption that the power was always going to be there, and I think for a very long time it was,” Davis said. “But right now, you have aging infrastructure. We're removing more base power production than what we're putting on you. And, you know, we need more investment in the grid.”
And demand is dramatically increasing, fed by data centers, and the increasing electrification of everything from houses to cars.
The county statement also criticized state energy policy that "does not match the current capability of that infrastructure” — blaming state mandates on electric heating and appliances for compounding the problem.
"I think it would be unfair to suggest that it's all on the utility," Davis said.
Developers also point to the state’s current rule that if a project uses up the last available power in an area and needs more, that developer must pay for the system upgrades — which are costly and can take years.
“It places an unreasonable financial burden on a single project, even when others have contributed to the increased load, and discourages economic investment across the state,” developer Jeff Cook wrote to the state’s Public Service Commission in August. “Reforming this rule is essential if we want to encourage, rather than deter, development in communities like ours.”
Cook is one of the developers on Uptown Landing.
All this development is happening because Ontario County is growing — adding 4,000 people over the past decade, a nearly 4% increase in population, records show.
That, too, is applying pressure to the problem as a lack of availability leads to issues with affordability.
“Families are being priced out, businesses are looking elsewhere, and the only thing standing between Ontario County and desperately needed housing is a utility system that refuses to keep up,” said Jared J. Simpson, chairman of the Ontario County Board of Supervisors.
Or as Davis put it: “Houses are where jobs go at night, and you have to pay attention to it.”
In a statement, a spokesperson for the utility's parent company Avangrid responded:
"New York State and the country are facing a critical challenge in electric capacity that’s slowing down development due to a sharp rise in demand. RG&E and NYSEG’s proposed ‘Powering New York’ plan is designed to overcome those challenges by investing in an aging grid, allowing for the expansion of electrical capacity. The companies have proposed a newly established customer cost allocation program (CCAP) which will better position the companies to respond to emergent system capacity needs such as those recently seen in the Canandaigua area.
"NYSEG and RG&E are committed to working with local and state officials to find solutions for private development projects that balance the growing community’s needs and affordability for our customers."
Goals versus realities
Gov. Kathy Hochul has made housing a focus of her affordability agenda.
The governor initially sought to impose mandates on local governments to build new housing, aiming for 800,000 new units over 10 years. The goal was to meet demand but also bring down housing costs. But her plan faltered, facing stiff resistance from the suburbs.
Hochul followed with a bevy of grants for “pro-housing” communities. And Ontario County responded.
“We have roughly a quarter of the pro-housing communities for the entire (Finger Lakes) region,” Davis said, adding: “We really have embraced that idea — and we have to have the power to do it.”
In the nine-county Finger Lakes region, 48 communities are certified as “pro-housing communities,” a first step toward applying to funding programs. Ten of those are in Ontario County, online records show — second only to Monroe, which has 13.
Along with power, housing needs municipal water and sewer utilities, which is another reason county officials are so keen on the issue, Davis said.
They are making decisions on extending lines, “based on the idea of this is where we would like to grow,” he explained,
“just sometimes to find out that, yeah, you were never gonna be able to do it there anyway.”
In downtown Canandaigua, the Labelon building sits at the edge of a targeted revitalization area that the state has awarded $10 million to jump-start. Some of the proposals vying for that assistance -- including new or expanded breweries, and a live music venue -- would require additional power. Local offiials hope to recommend a slate of projects for the state funding by early next month.
Phelps, too, is looking at downtown investment — boosted by a $4.5 million NY Forward grant — and is considering several street and park projects, as well as a proposal to reactive the Phelps Hotel. The hotel project would reopen the first-floor bar, restaurant and banquet center, while also adding apartments and short/long-term rentals, all of which could create additional electrical demand.
“So it's an issue,” Davis said. “We have to be able to work together on this and figure out where the pockets of growth can be."
The goal is to have a regional capacity summit soon, Davis said, bringing more rural counties into the discussion, then approach state legislators with a unified message.
“This problem doesn’t get solved without money,” Davis said. “It is a significant investment.”
