According to the Climate Leadership and Community Protection Act (Climate Plan) the Scoping Plan will define how to “achieve the State’s bold clean energy and climate agenda”. At the November 30, 2021 meeting (recording here), Climate Action Council feedback on the draft Scoping Plan was discussed but it was not completed so a follow up meeting December 6 (recording here) addressed items that were not resolved. This post addresses the discussion related to the resolution of consumer affordability resolution.
I have written extensively on implementation of the Climate Act because I believe the ambitions for a zero-emissions economy outstrip available technology such that it will adversely affect reliability and affordability, risk safety, affect lifestyles, will have worse impacts on the environment than the purported effects of climate change in New York, and cannot measurably affect global warming when implemented. 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.
The Climate Action Council is responsible for preparing the Scoping Plan. Starting in the fall of 2020 seven advisory panels developed recommended strategies to meet the targets that were presented to the Climate Action Council in the spring of 2021. Those recommendations were translated into specific policy options in an integration analysis by the New York State Energy Research and Development Authority (NYSERDA) and its consultants. An overview of the results of this integration analysis were presented to the Climate Action Council at the two October meetings and has since been updated. A draft Scoping Plan has been prepared and distributed to the Climate Action Council but not to the public.
The Climate Action Council’s November 30, 2021 meeting discussed resolution of feedback from the Council on the draft scoping plan. This was necessary to prepare for the meeting scheduled for December 20 when there will be a formal vote on the release of draft Scoping Plan for public comment. I did three posts on the presentation at that meeting. The presentation included a summary overview of each chapter that I consolidated to provide an overview of the Scoping Plan. I documented all the unresolved issues that need to be reconciled before the draft plan can be released and discussed the controversial unresolved issues.
On December 6, 2021 there was a follow up meeting to complete the Council discussion of draft Scoping Plan feedback not covered in the first meeting. The agenda items were discussed at (5:15 in the recording):
- The topic of leaving analysis of consumer rate impacts to subsequent implementation processes
- Adding a gender lens to climate justice
- The use of moratoria in the Land Use Chapter
- Local government chapter
- Transportation chapter
This article will document the response to the following feedback item from the following slide: “Need analysis on energy affordability and impacts to consumer pricing as part of the scoping plan scenarios” and the proposed resolution: “The integration analysis does not make any assumptions about “who pays,” which will depend forthcoming funding and policy mechanisms. For ratepayer cost impact, we anticipate that any analysis would be developed as part of subsequent implementation processes.” I have included my indented and italicized comments after each speaker’s description.
Consumer Impacts Comments
Sarah Osgood introduced the topic at 8:32 in the recording. She explained that the prices shown are economy wide costs of the strategies but don’t include or model ratepayer impacts. The reason that they cannot show ratepayer impacts in the draft Scoping Plan is because the level of detail needed for that kind of analysis must come from a specific implementation policy which is beyond the purview of the Scoping Plan. They propose to provide that information part of the subsequent implementation process.
I have always maintained that the biggest problem with the Climate Act is that it set its targets and schedule without the benefit of an engineering feasibility analysis. In my opinion, one of the key feasibility constraints is affordability and costs information is only possible after a thorough engineering analysis. I believe this feedback addresses that concern. Unfortunately, the Scoping Plan is not a feasibility analysis. It is simply sets of strategies in different scenarios that claim to meet the Climate Act targets and schedule. Until such time that the organizations responsible for electric system reliability have confirmed that the strategies will work it is not “feasible”. In addition, now it appears that the Climate Act implementation process won’t provide the true costs to consumers as opposed to societal costs until regulations implementing the strategies are proposed after 2022.
Both industry representatives raised issues with waiting to provide consumer rather than societal cost impacts. Donna DeCarolis at 11:09 in the recording said she was concerned that waiting until implementation to analyze the cost impact seems too late. She suggested that some scenario analysis be done in early 2022 for a variety of scenarios for each of the customer classes. Gavin Donohue at 12:20 supported Donna’s comments and went to say that there are a lot of recommendations in this report, some more impactful than other. He argued that there are data out there that could be used for some of those more impactful recommendations but not included in the Scoping Plan. He concluded that where we know costs they should be articulated in the draft. Raya Salter at 13:32 (representing disadvantaged communities) agreed with DeCarolis and Donohue arguing that the we need the costs to determine impacts on disadvantaged communities.
Even though I have not seen the draft Scoping Plan, it is already apparent that there is a missing piece in the documentation. For example, Donohue said that the costs of heat pumps were not included in the draft. However, there are estimates in the heating device costs in the Integration Analysis – Inputs and Assumptions Summary and Integration Analysis – Inputs and Assumptions Workbook available in the resources section of the Climate Act webpage. It is not surprising that any Council members would be unaware of that information (it came out on 11/18/21) while they were reviewing the 300+ page draft. However, it does appear that the draft Scoping Plan does not adequately link the text to this documentation. Moreover, the summary document is a series of slides and does not include documentation describing the graphics. There isn’t any specific documentation associated with the contents of the workbook either.
Doreen Harris, the NYSERDA Co-Chair of the Council, responded to these comments at 16:22 of the recording. She said that the analysis has not yet resolved the question of who would ultimately pay for some of these initiatives and or policies. Summing up she said that the fact is that this isn’t all going to fall on ratepayers or NYS taxpayers. Ultimately there will be “private market involvement at scale that’s part of our goal of course and the reality we’re seeing”. She continued saying that “federal involvement is increasingly critical for us to gain from as a state”. She concluded that “we not only have to analyze the costs themselves, but also the question who is paying to respond to the request”.
The leader of the Integration Analysis effort at NYSERDA is Carl Mas. At 17:45 of the recording he explained that they were able to analyze for the technologies and the system changes in the scenarios to determine incremental cost to society.
In order to determine the actual costs to society you need to have specificity to distribute those costs. Is it going to be a ratepayer program? It is going to be a tax credit or incentive? How much is the Federal government going to weigh in to help buy down some of the cost. Without those types of programmatic specifics, we can’t actually analyze how much individual parts of our society should pay.
He went on to claim that: “It is really important to have articulated what the incremental costs would be and what the benefit cost analysis is, which is that we’ve done.” He concluded at 18:37 that:
I hope people don’t walk away thinking that waiting for implementation means that somehow there is kind of a done deal at that point. I mean, at that point is when we see the specific policy proposals that flow from a scoping plan. That’s when we can continue to debate and discuss how we implement these proposals.
If you agree that societal costs and assurances that the proposed plans will actually deliver what is promised are the two key feasibility metrics, then the Scoping Plan is probably going to disappoint you. Contrary to Mas, waiting to argue cost issues until the implementation plan does create a “done” deal. When the agencies promulgate the regulations necessary to implement the Scoping Plan scenarios, I don’t expect that cost-effectiveness will be on the table for discussion.
Anne Reynolds (Alliance for Clean Energy New York) made a suggestion for something in the middle at 19:22 in the recording:
We have done a societal cost impact because that’s what we can do now. The Council recommends that when the recommendations reach the point of a specific proposal, like the ZEV mandate, once it’s going from a recommendation to a regulation that we recommend that there has to be a specific ratepayer assessment at that time.
It is not clear to me when the regulation development process will begin. If the regulatory development process begins in parallel with the finalization of the Scoping Plan in 2022, it seems to me that it short circuits the Scoping Plan. So when there will be a thorough cost evaluation? The question is when does the regulatory drafting begin relative to the scoping plan becoming final?
Donna DeCarolis responded at 21:04 saying:
I think what’s missing is the true consumer potential cost impact. The policies haven’t been yet determined so we don’t know who’s going to pay, but there could be consumers paying for some of these very specific recommendations around electrifying heat dates certain included. I don’t think that is a part that you can just wait to see what will happen. The cost to consumer needs more focused analysis
Sarah Osgood at 22:25 tried to summarize and conclude the discussion. She suggested that the revised staff proposal is to make it clear that any as kind of the policies get more well formed that every policy should have an assessment of ratepayer or of consumer impacts as early as possible. Over the next year we will try to include more material for the final Scoping Plan that helps get at some of the cost items through cost studies.
Starting at 25:45 Paul Shepson, Dean, School of Marine and Atmospheric Sciences at Stony Brook University; Peter Iwanowicz, Executive Director, Environmental Advocates NY; Thomas Falcone, CEO, Long Island Power Authority; and Robert Howarth, Professor, Ecology and Environmental Biology at Cornell chimed in. They argued that there are economic benefits to the consumers that should be included in the discussion along with the cost of the increased reliability risk. They demanded that the Scoping Plan include a “balanced analysis of benefits and costs”. “If the policy descriptions strictly focus on ratepayer costs that introduces a bias in the document for those members of the public who are reading it”. Falcone argued that there were direct consumer benefits that could be included. There was no further discussion at the conclusion of their comments.
The draft Scoping Plan provided both societal costs and benefits. I agree with these commenters that the Scoping Plan should provided a balanced analysis of benefits and costs but distinctions have to be made relative to societal and direct values. Clearly additional information on cost to consumers is needed but it has to be accompanied by a discussion of direct consumer benefits.
Clearly this process is more about fulfilling the Climate Act legal mandates than trying to develop an affordable future energy system. The Integration Analysis and, presumably the Scoping Plan when released, argue that the analysis for the technologies and the system changes in the scenarios to meet the Climate Act mandates include the incremental cost to society and that their societal benefit estimates out-weigh those costs. In the first place, the New York Independent System Operator (NYISO) notes that the Scoping Plan lacks appropriate resources: “Dispatchable resources that are emissions-free, and on the scale needed, are not yet available or currently in the NYISO interconnection Queue” so it is unlikely they can estimate those costs. In addition, there are problems with the societal cost and benefit estimates that are the focus of this article.
Societal cost estimates represent the minimum cost of the technology needed for emission reduction strategies. Mas explained that in order to convert societal costs to direct costs to consumers that you have to determine how to distribute those costs through, for example: ratepayer program, State tax credit or incentives or the Federal government support. No matter how the costs are distributed, each approach adds other programmatic costs. In addition, programs like a carbon tax don’t always fund the direct costs needed for the technology and, instead, fritter away money on things like job programs to train people for the transition technology implementation. Without a detailed cost breakdown, the public won’t know if those costs are included in the Integration Analysis cost projection.
Societal benefit estimates are pretty abstract and not well understood. The largest Integration Analysis benefit is from the Social Cost of Greenhouse Gases. These values are claimed to measure the dollar damage done by the global warming impacts over the next 300 years caused by a ton of today’s emissions. The value has been described as “long, complex and contingent on human decisions that are at least partly unrelated to climate policy”. The social cost of carbon is, at least in part, also “the social cost of underinvestment in infectious disease, the social cost of institutional failure in coastal countries, and so on.” Assume a generation is 25 years then we are talking benefits out 11 generations to 2300 and the benefits mostly accrue to those jurisdictions outside of New York where they have under invested in infectious disease prevention and developing resiliency to extreme weather. Obviously, this societal benefit has very little value to a New Yorker trying to pay for the Climate Act programs.
Similar to what is happening in Great Britain, the Net Zero implementation process continues unabated despite gaping holes in the analysis. The Scoping Plan relies on unproven technology to maintain reliability. The societal cost and benefits in the Scoping Plan do not represent the actual costs and direct benefits to the consumer. At some point New Yorkers have to confront the fact that the Scoping Plan inadequately addresses the true risks and costs of the Climate Act. In my opinion this reckoning should come sooner rather than later.
 Richard S.J. Tol Rebuttal Ex. 2: In the Matter of the Further Investigation into Environmental and Socioeconomic Costs, Under Minnesota Statute 216B.2422, Subdivision 3, OAH Docket No. 80-2500-31888,MPUC Docket No. E-999-CI-14-643