Gov. Hochul has spent much of her 4 ½ years in office confronting challenges stemming from a 2019 climate law: legally binding greenhouse gas reduction targets that the state appears ill-equipped to meet.
The 2019 Climate Act mandates a 25% reduction in greenhouse gas emissions from 1990 levels by 2030. Progress toward this goal has been limited, in part due to the closure of New York’s largest nuclear power plant in 2021.
The law remains in effect, despite resistance to revisions. If Gov. Hochul fails to persuade stakeholders to amend it, the state could face steep electric bills, unsuccessful green-energy initiatives, and potential power outages.
The law presents three interconnected problems: threats to grid reliability, rising electric bills, and a potential surge in fuel prices. The most pressing concern is the risk of power disruptions, potentially as early as June.
Powerless
State air-quality regulations have already led to the closure of several “peaker” power plants, which previously provided crucial energy during peak demand. These plants have not been adequately replaced.
In December, the Public Service Commission directed Con Edison to address the shrinking gap between peak demand and supply, but restricted solutions to “non-emitting” options. It remains uncertain how Con Edison will manage future periods of high electricity demand.
Meanwhile, customer rates have surged across New York.
As of November, bills were up 7% over the previous year and 47% since 2019. In the Syracuse area, bills have more than doubled since 2019. A state energy forecast suggests electricity prices upstate could rise another 40% in the next five years.
These increases are linked to the Climate Act, as customers subsidize wind, solar, and transmission projects. Costs associated with offshore wind and a new power line under the Hudson River have yet to fully impact bills. Electric utilities are also funding electrification projects, with costs passed on to customers.
Last-ditch efforts
The state is currently defending against a lawsuit brought by environmental groups who argue that officials have delayed implementing regulations to increase fuel costs. These regulations, if enacted, could increase gasoline prices by $1.62 per gallon and similarly impact heating oil, diesel, and natural gas.
Though Gov. Hochul initially resisted, environmental activists won at the trial level and may prevail on appeal. This could necessitate substantial modifications to the Climate Act during ongoing budget negotiations to avoid a significant tax increase.
Whereas these price increases have not yet materialized, Gov. Hochul’s standing on “affordability” is diminishing with each increase in customer bills. She also faces the challenge of an aging energy system that the Climate Act restricts her from fully replacing.
Frequently Asked Questions
What is the 2019 Climate Act?
The 2019 Climate Act requires New York to cut greenhouse gas emissions by about one-quarter from 1990 levels by 2030.
What is the potential impact of the Climate Act?
The Climate Act could lead to steep electric bills, unsuccessful green-energy initiatives, and potential power outages.
What is Gov. Hochul’s role in addressing these issues?
Gov. Hochul faces pressure to modify the Climate Act to prevent what some describe as the biggest middle-class tax hike in state history.
How will New York balance its climate goals with the need for affordable and reliable energy?
