‘A public policy mistake’: Lawmakers oppose Hochul's effort to upend energy mandates

 ALBANY — Democrats in the state Legislature expect Gov. Kathy Hochul to make a strong push in the coming weeks to overhaul and potentially delay the state’s energy and emissions mandates as part of the state budget.

 

They’re not surprised that she plans to seek those changes but that doesn’t mean they’re amenable to the idea. 

 

It’s become increasingly clear during this year’s legislative session that Hochul plans to make a strong push to amend those mandates, including their deadlines, that were established by the Climate Leadership and Community Protection Act of 2019.

 

“I’m looking at this from an all-the-above approach, and we’ll be closely engaging the legislators,” Hochul said Thursday.

 

The law’s current requirements, Hochul and others have said, would raise costs for ratepayers. State Budget Director Blake Washington confirmed that concern Wednesday.

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“It’s not something we can just ignore and stick our head in the sand,” Washington said. “She doesn’t want to foist those costs on (any) New Yorker.”

 

After advocates and proponents of the law’s mandates bristled at that argument, the New York State Energy Research and Development Authority released a new memo Thursday with numbers purporting to back up the governor's position.

 

The memo says that if the state forces regulations to accelerate its progress and meet the 2030 energy and emissions mandates, including a required 40% reduction in carbon emissions, costs for ratepayers will rise sharply. And that would happen at a time when Hochul and many other lawmakers are campaigning on platforms focused on reducing costs for voters.

 

Those carbon emissions regulations would be for a cap-and-invest program, where the state caps the amount of carbon able to be emitted by major polluters. Those companies would then have to pay the state for permission to generate those emissions.

 

The intent behind the program is to reduce carbon emissions in the state while generating revenue that can help mitigate the impact of major weather events and provide rebates to ratepayers for their energy bills. 

 

Hochul has stalled the program and the state is entangled in litigation that could force her administration to implement those regulations.

 

They’re supposed to be a major driver in the state’s 2030 deadline to reduce carbon emissions by 40%. The state has since said it doesn’t expect to meet that deadline until 2036 at the earliest.

 

Hochul attributed that delay on Thursday to factors outside the state’s control, including global disruptions and setbacks on energy development.

 

“I wished all the circumstances and metrics that were looked at back in 2019 had remained consistent,” Hochul said. “But a pandemic which disrupted global supply chains, raising the cost of everything we’re trying to do to build more clean energy, renewable energy. The inflation drove up costs.”

 

The memo released Thursday by the state said that, if New York is forced to implement the cap-and-invest program to meet the 2030 deadline, households that heat their homes with fossil fuels would see their costs increase anywhere from $2,300 to $4,000. The price of gasoline, according to the memo, would increase by up to $2.23 per gallon.

 

That’s because, the memo said, the state would have to charge polluters a significant amount for carbon allowances to raise the revenue needed to meet the 2030 deadline. That cost would then be passed by those companies on to utility ratepayers and motorists, the memo said.

 

It’s unclear if the memo factored in the rebates allowed for ratepayers through revenue from the program. Environmental advocates questioned the accuracy of the estimates, saying they represent a worst-case scenario in terms of cost.

 

“The projections assume the most aggressive implementation of the program without factoring in cost controls, direct consumer rebates, and more importantly, the extensive clean air benefits the program would provide,” said Julie Tighe, president of the New York League of Conservation Voters.

 

When former Gov. Andrew M. Cuomo and Democrats in the state Legislature approved the law, an analysis of its cost impact on consumers wasn’t performed. 

 

Lawmakers have argued that energy costs will fall for ratepayers if more of the state’s energy is produced through renewable sources. That’s because the price of electricity is tied directly to the price of natural gas, which fuels power plants.

 

That argument was affirmed, in part, last month by the New York Independent System Operator, an independent entity that manages the state’s power grid.

 

New York relies on natural gas for roughly half of the electricity used in the state. The price of natural gas is volatile; it quadrupled between 2020 and 2022, according to the grid operator. It then decreased but has since been on the rise again. [another argument for nuclear power]

 

On top of that reliance, utility companies typically cite the need to replace aging gas infrastructure when requesting higher rates from the state Public Service Commission.

 

If more of New York’s electricity was produced from renewable sources, those factors would not have as much of an impact on the price of energy, said state Senate Environmental Conservation Chair Peter Harckham, a Democrat from Westchester County.

 

“The high prices are due to natural gas, not our transition to renewables,” Harckham said. “So why on Earth would we double down on the thing that’s already raising prices?”

 

That was Harckham’s response to Washington’s comments on Hochul’s desire to renegotiate the state’s energy and emissions mandates. Hochul hasn’t said exactly what she’ll be seeking but there’s consensus that it would involve delaying the deadlines for those mandates.

 

She’s previously hinted that she wants to revive a push to change how the state calculates its carbon emissions from methane. She tried that previously but the idea was rejected by lawmakers, who still oppose it.

 

The memo from NYSERDA specifically cites the current carbon accounting approach as a driver of the cost of cap-and-invest that would be passed on to consumers. The implication is that changing it would help alleviate that cost.

 

Assembly Environmental Conservation Chair Deborah Glick said that would deeply undercut the purpose of the law, even if the state can’t meet its deadlines.

 

“If our goals are seemingly overly ambitious because we had COVID, we had supply chain issues, we’ve had a federal government that’s backed away, we can reset goals but we should not reset the basic underpinning because methane, while short-lived, is more pernicious.”

 

That wasn’t included in amendments to her proposed state budget last week, nor were any other recommendations for changing the law. But lawmakers are gearing up to present a strong opposition to her efforts.

 

“I think it would be a public policy mistake. I think it would be a political mistake,” Harckham said. “It’s a fight we don’t need to have.” 

 

“There are other avenues that we can address trying to get to where we need to get to without rolling back and doing the bidding of (President) Donald Trump’s war on climate science,” he said.

 

Lawmakers are prepared for Hochul to drop proposed changes near the end of March, just as the state budget is coming due. That could mean, like past years, that the spending plan would be late.

 

“I don’t think it’s helpful to try to push significant policy questions late in the budget process and delay a budget,” Glick said. “It’s not helpful to anybody — certainly not school districts.”

 

Schools rely on the timely passage of the state budget to inform their own budgets, which go before voters in May.

 

There are some moderate Democrats who represent districts upstate who’ve aligned with Hochul’s concerns over the climate law’s requirements, though there hasn’t yet been a strong public push from those lawmakers.

 

She also has support from business interests, including the Business Council of New York State, which said Thursday that lawmakers should relent to Hochul’s efforts.

 

“It is increasingly clear that we need the Legislature to agree to amendments to the (law),” the Business Council said in a statement. “Adjusting the state’s energy and climate law does not mean abandoning the state’s commitment to act on climate change.”

 

The state budget is due at the end of March but Hochul and lawmakers could push that deadline through short-term spending bills.

 

Hochul eyes changes to New York's energy mandates over cost