Climate and Community Investment Authority

In the spring of 2021, the New York state Senate introduced the Climate and Community Investment Act (CCIA).  Coming on the heels of the Texas energy debacle one might think that New York politicians would not propose any changes to energy and environmental laws until the causes of that disaster were understood or would at least make implementation contingent upon feasibility studies to determine if the ambitious goals of this legislation don’t risk a similar outcome in New York. This is one of a series of posts about this legislation.  Posts to date include an overview and summaries of the climate pollution fee and legislative findings.

I have written extensively about implementation of the Climate Leadership and Community Protection Act (CLCPA) because I believe it will adversely affect affordability and reliability as well as create more environmental harm than good. The CCIA will make those impacts worse.  The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

Background

The sponsor memo for this proposed regulation lists specific provisions in the proposed legislation.   I prepared an annotated version of the draft bill that includes internal links to the sections of the bill corresponding to those provisions.  The summary of Senate Bill S4264A states:

Enacts the climate and community investment act; prioritizes the allocation of public investments in disadvantaged communities; addresses climate change challenges through the expansion and growth of clean and renewable energy sources; adopts best value requirements for the solicitation, evaluation and award of renewable energy projects;  establishes a community just transition program; establishes a climate pollution fee and a household and small business energy rebate; and creates the climate and community investment authority.

Climate and Community Investment Authority

This post describes a proposed addition to the Public Authorities Law that adds the Climate and Community Investment Authority (Authority).  The legislative findings explain the purpose of this authority:

21. It is in the interest of the state to establish a dedicated authority to ensure that New York’s climate goals are accomplished. Such an authority would be able to nimbly manage the proceeds from a polluter fee which will amass significant revenue and require ongoing management.  This authority would also disburse funds for clean energy community scale projects in a timely and efficient manner while employing best value procurement practices. In addition, a new authority would have the capacity to ensure prioritization of projects and funds for impacted communities, coordinate statewide emissions reduction strategies and assist impacted workers in a transition away from fossil fuels through specialized assistance programs

The Authority’s board of trustees establishes the following offices: environmental justice, household and small business energy rebates, climate jobs and infrastructure, community just transition, worker and community assurance, value of pollution and mitigation program, procurement, public engagement and independent ombudsperson, and any other offices as necessary.  Each office created by the authority shall: “Abide by the principles of environmental justice, including the federal executive order 12898 of 1994, relating to environmental justice, and the Jemez principles of democratic organizing. Such principles shall include: being inclusive; placing an emphasis on bottom-up organizing; letting people speak for themselves; working together in solidarity and mutuality; building just relationships among ourselves; and making a commitment to self-transformation.” 

The Board of Trustees consists of five trustees from state agencies, two appointees from the Governor, three from the temporary president of the Senate and three from the speaker of the Assembly.  At least one appointee must live in eight regions outside of New York City.  A minimum of three trustees “shall be representative of environmental justice communities” and one shall be a representative of a youth organization under the age of 21.  However, “All trustees appointed under this section shall have relevant experience in any or all of the following areas: utility, environmental justice, energy markets, energy systems, organized labor, workforce development, sustainable land use, transportation, and clean energy.” 

Comments

In general, I am not a fan of governmental agencies and I am particularly unimpressed with New York authorities.  The particular problem is that despite the dedication in New York authorities of staff members chosen because of their background and experience, their work is co-opted by managers chosen by politicians.  Over time and, particularly in the Cuomo Administration, the authorities no longer answer to the citizens of New York but to the agendas of the politicians.  Setting up a new authority for a specific agenda-driven program is a recipe for public policy that is not necessarily in the best interests of the state as a whole.

The legislative findings note that this authority “would be able to nimbly manage the proceeds from a polluter fee which will amass significant revenue and require ongoing management.”  It is not clear to me how a new authority with six agenda-driven offices could ever “nimbly” manage anything much less money.  Unfortunately, the nimble goal gets much less likely given the organizational mandates that dictate how decisions are supposed to be made. 

The reference to “significant” revenues is a key point for New Yorkers to understand.  In conversations with people familiar with Albany politics one of the major drivers of this law is to provide the funding needed for CLCPA target implementation.  So far, the Climate Action Council and its advisory panels have avoided mentioning any cost estimates.  However, according to this article, New York “will need an annual investment of about $31 billion per year in combined private and public spending to bring CO2 emissions down to 100 million tons by 2030, a 2017 study by economists at the University of Massachusetts-Amherst found.  That equates to two percent of the state GDP.  At a recent hearing a figure of $15 billion a year in revenues was mentioned.  WHAM reports that the carbon tax alone would bring in $2.3 billion a year and that measure could increase gas prices 55 cents a gallon and raise home heating costs 26%.  As egregious as these costs estimates are, the total cost of the CLCPA will likely be even more.

Each of the offices has a politically appointed director.  I am uncomfortable with this language:

Pursuant to authority duly delegated to him or her, a director from time to time shall hire, without regard to any personnel or civil service law, rule, or regulation of the state and in accordance with guidelines adopted by the board, such officers, employees and consultants, as they may require for the performance of their duties and shall prescribe the duties and compensation of each such officer, employee or consultant. Notwithstanding the provisions of any general, special or local law, the board may determine that, if any pension or retirement plan becomes inapplicable or is terminated, all or such class or classes of employees of the authority as the board may determine may elect to become members of the New York state employees’ retirement system on the basis of compensation payable to them by the authority.

Maybe it is just me but this seems to be a recipe for bureaucratic abuse.

Finally, there are 13 trustees all chosen because of who they know rather than what they know. They all are politically appointed and despite the requirement that they will have “relevant experience” that requirement rings hollow when one of the trustees is supposed to be under 21.  The only relevant experience for the child trustee that I can think of is membership in an environmental organization. 

Conclusion

New York’s record for clean energy development is not good because the cost per ton of CO2 reduced using the proceeds from the Regional Greenhouse Gas Initiative far exceeds the states social cost of carbon.  My impression is that some of the reason for that poor performance is because of the cost of New York bureaucracy.  This legislation would compound that problem significantly.  It will be a windfall for the politically connected and the crony capitalists but will just mean increased costs of living for the citizens of New York.