Battery energy storage projects have become a familiar topic at town board, planning board, and zoning board meetings across New York State. Developers view these facilities as an important component of the state’s evolving electric grid. Municipal officials must decide how to regulate the relatively new land use, while residents often raise questions about appropriate locations, safety, and community impacts. A recent decision by the Westchester County Supreme Court addresses a significant legal question arising from these projects: when a battery energy storage system requires a zoning use variance, should it be treated like a commercial development or a public utility infrastructure?
In Matter of Yorktown ESS, LLC v. Town of Yorktown Zoning Board of Appeals, the court concluded that the public utility standard applies. While the decision arose from a dispute involving a single proposed project, its reasoning may influence future land use decisions involving energy infrastructure throughout New York State.
Battery energy storage systems (commonly known as BESS) have become one of the fastest-growing forms of energy infrastructure in New York State. As the electric grid incorporates more renewable energy sources, battery storage facilities play an increasingly important role by storing electricity when production exceeds demand and releasing it when additional power is needed. New York’s broader energy policies, including implementation of the Climate Leadership and Community Protection Act (CLCPA), which set ambitious statewide clean energy and emissions reduction goals, have accelerated interest in energy storage projects.
Understanding the Public Utility Variance Standard
Most property owners seeking a land use variance face a difficult legal burden. Under New York Town Law, an applicant generally must demonstrate “unnecessary hardship,” a demanding standard requiring proof that the property cannot realize a reasonable return if used only for permitted purposes, the hardship is unique, the requested variance will not alter the essential character of the neighborhood, and the hardship was not self-created. Public utilities, however, have long been treated differently.
Nearly fifty years ago, the New York Court of Appeals recognized in Consolidated Edison Co. v. Hoffman that public utility infrastructure presents unique siting challenges. Unlike many commercial developments, utility facilities often cannot simply be located wherever zoning permits. Their locations are frequently dictated by engineering requirements, transmission or distribution infrastructure, customer demand, or other technical or regulatory considerations.
Because of those realities, New York courts developed what is commonly called the Public Utility Variance Standard. Rather than proving unnecessary hardship, a qualifying public utility generally must demonstrate that:
- The proposed facility is necessary to provide safe and adequate utility service; and
- There are compelling reasons—economic or otherwise—making the proposed location more feasible than available alternatives.
Over time, New York courts expanded this doctrine beyond traditional electric substations and water facilities to include wireless telecommunications infrastructure, recognizing that cellular facilities also perform essential public functions.
Until now, however, no reported New York decision had squarely addressed battery energy storage systems.
The Yorktown Case
The dispute arose after Yorktown ESS, LLC sought approval to construct a 5-megawatt battery energy storage facility in the Town of Yorktown, New York.
According to the court’s decision, the project entered the municipal approval process while battery storage facilities were permitted under the Town’s zoning regulations. During the review process, however, the Town first adopted a moratorium and later enacted a local law prohibiting the type of battery storage facility proposed by the applicant. As a result, the developer was required to seek a land use variance.
Before the Town’s Zoning Board of Appeals, the applicant argued that the project should be evaluated under the Public Utility Variance Standard because the facility functioned as part of New York’s electric utility infrastructure.
The Zoning Board disagreed. It concluded that the traditional unnecessary hardship standard applied and denied the variance application under Town Law § 267-b.
The developer then commenced an Article 78 proceeding challenging that determination.
The Court’s Analysis
The court concluded that the Zoning Board had applied the wrong legal standard.
In reaching that conclusion, the court relied heavily on decades of New York appellate precedent interpreting what constitutes a public utility for zoning purposes. Rather than focusing solely on whether a facility directly sells electricity to consumers, the court emphasized the broader role modern utility infrastructure plays in an integrated and heavily regulated electric system.
The decision identified several characteristics of battery energy storage projects that supported treating them as public utility infrastructure, including:
- Battery storage facilities perform essential grid functions by storing electricity, improving system reliability, supporting renewable energy integration, and balancing fluctuations in electricity supply and demand.
- They operate within New York’s comprehensive electric utility regulatory framework, including Public Service Commission oversight and utility interconnection requirements.
- They are often located based on engineering constraints. Interconnection studies, hosting capacity, and transmission limitations largely determine where projects can connect to the grid, leaving developers with limited siting options.
The court concluded that these characteristics place battery storage facilities within the same category as other public utility infrastructure recognized by New York courts.
Instead of ordering that the variance be granted, the court annulled the Zoning Board’s determination because the wrong legal standard had been applied and remanded the matter to the Board for a new determination under the Public Utility Variance Standard. The court made clear that it was deciding only which legal test governed the application—not whether the applicant ultimately satisfied that test.
Why the Decision Matters
For battery storage facility developers, the ruling provides judicial support for the position that qualifying battery storage facilities should be evaluated under the specialized public utility framework rather than the traditional unnecessary hardship standard when a use variance is required. Although applicants must still satisfy the Public Utility Variance Standard, that framework recognizes the unique engineering and operational constraints associated with utility infrastructure.
For municipalities, the decision serves as an important reminder that whether a proposed land use qualifies as a public utility is ultimately a legal question governed by New York precedent. Local zoning boards retain broad authority to decide use variance applications, but they must first determine and apply the correct legal standard. Applying the wrong standard can result in an Article 78 challenge and require the matter to be reconsidered.
For property owners and residents, the decision does not diminish opportunities to participate in the local land use process. Public hearings, environmental review, and consideration of site-specific issues such as traffic, setbacks, visual impacts, and compliance with local regulations remain important components of project review.
The Yorktown decision reflects the continuing evolution of New York land use law as new forms of infrastructure emerge.
As technology has evolved, New York courts have expanded the public utility doctrine to encompass telecommunications infrastructure and renewable energy projects. The Yorktown decision extends that reach to battery energy storage systems, recognizing the role that modern storage technology plays in the operation of today’s electric grid.
The decision is noteworthy because it is the first reported New York decision to directly address whether battery energy storage facilities qualify as public utility infrastructure for purposes of zoning variances. Whether the decision is appealed or whether other courts adopt the same reasoning remains to be seen, but it has already become an important addition to New York’s developing body of law governing energy infrastructure and local land use regulation.
As battery storage projects become more common throughout New York and communities continue balancing local land use objectives with statewide energy goals, the Yorktown decision provides meaningful guidance regarding the legal framework that may govern future variance applications involving this rapidly expanding form of energy infrastructure.
Jacob H. Zoghlin is a Partner in Underberg & Kessler LLP’s Litigation department and chairs the firm’s Environmental & Energy Law and Municipal Law practice groups. His practice focuses on environmental, land use, energy, and municipal law. He regularly represents towns, developers, and community members in matters involving SEQRA, zoning, permitting, and land use litigation. He can be reached at (585) 258-2834 or jzoghlin@underbergkessler.com.
Reprinted with permission from The Daily Record and available as a PDF file here.
