In order to implement the Climate Leadership & Community Protection Act (Climate Act) the plan in 2023 is to promulgate regulations and implement legislation to facilitate the control strategies needed to meet the net-zero transition plan. The NY HEAT proposed legislation is intended to protect the climate and keep energy costs down. This post describes an article by one of the co-sponsors.
I have been following the Climate Act since it was first proposed. I submitted comments on the Climate Act implementation plan and have written over 300 articles about New York’s net-zero transition because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that the net-zero transition will do more harm than good. 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.
Climate Act Background
The Climate Act established a New York “Net Zero” target (85% reduction and 15% offset of emissions) by 2050 and an interim 2030 target of a 40% reduction by 2030. The Climate Action Council is responsible for preparing the Scoping Plan that outlines how to “achieve the State’s bold clean energy and climate agenda.” In brief, that plan is to electrify everything possible and power the electric grid with zero-emissions generating resources by 2040. The Integration Analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants quantifies the impact of the electrification strategies. That material was used to write a Draft Scoping Plan. After a year-long review the Scoping Plan recommendations were finalized at the end of 2022. In 2023 the Scoping Plan recommendations are supposed to be implemented through regulation and legislation.
Assemblymember Patricia Fahy and Senator Liz Krueger have sponsored a bill (S2016) NY HEAT that is intended “to ensure that state regulation and oversight of gas utilities provides for the equitable achievement of the climate justice and emission reduction mandates set forth in the Climate Leadership and Community Protection Act. The intent is to provide the “Public Service Commission with the authority and direction to align gas utility regulation and gas system planning with the CLCPA’s mandates.” It will remove “the legal basis and subsidies driving the expansion of gas systems and requires the commission to adopt rules to provide for the timely and strategic decarbonization and right-sizing of the gas distribution system in a just and affordable manner prioritizing low-to-moderate income customers and disadvantaged communities, and encouraging neighborhood-scale transitions.”
Rather than going through the legislation itself this post addresses an article by Fahy about it in the Gotham Gazette –We Can Protect the Climate and Keep Energy Costs Down with NY HEAT. In the following section I have annotated the article with my comments.
We Can Protect the Climate and Keep Energy Costs Down with NY HEAT
Per usual the political approach is to appeal to authority to provide the rationale for the action. Advocates like Fahy and Krueger don’t acknowledge that the Intergovernmental Panel on Climate Change has a political agenda that threatens the credibility of claims that we have to act now.
In March, the Intergovernmental Panel on Climate Change (IPCC) warned that the planet will cross a critical threshold for global warming within the next decade if we don’t take immediate action to curb emissions and meet ambitious climate mandates laid out in New York’s climate law.
The sponsors of the bill claim that concerns about affordability risks are unwarranted. I am not sure I understand their reasoning however. There is an implication that the gas utilities should be the ones that shoulder the costs and not the customers. The idea that the costs would be passed on seems to be missing.
As expected, gas utilities are casting doubt on the affordability of these needed reductions. Let’s be clear — New Yorkers and their families should not shoulder the burden of our clean energy transition.
Affordability is a major concern but we don’t need to weaken our nation-leading climate law to save the planet and save New Yorkers money. As the name suggests, legislation I sponsor with Senator Liz Krueger, the New York Home Energy Affordable Transition (NY HEAT) Act would help keep costs down for New Yorkers while accelerating our energy transition away from polluting fossil fuels and addressing affordability, keeping us on track to meet the goals of our climate law.
The focus on the bill is to outlaw a provision that gas utilities must provide hook ups to the system for new customers within 100 feet of existing pipelines. The authors claim that this subsidy forces ratepayers to pay $200 million in subsidies and they apparently think that stopping it will make the transition affordable.
For decades, New Yorkers have been subsidizing the very infrastructure the gas industry’s profits rely on. The industry’s business models are premised on the perpetual taxpayer-subsidized expansion of gas infrastructure and services. Currently, due to the 100-foot rule mandate – which requires gas utilities to hook up all new customers to gas lines at no charge – ratepayers are footing the $200 million annual bill for this continued expansion of polluting gas infrastructure.
This reasoning is egregious innumeracy because this cost is peanuts compared to all the subsidies needed to transition away from natural gas and go all electric. Consider that the ratepayers are going to have to pony up $339 million to upgrade the electric transmission system to reduce curtailment of 3 GW of offshore wind capacity which is just one component of the net-zero transition. The total cost for all the subsidies is not readily available but is very likely at least an order of magnitude greater than the savings claimed by this legislation. It may reduce the cost a little but reducing this cost will not make the Climate Act affordable.
The article goes on to claim that because National Grid is looking to sell parts of its pipeline network it is “adapting and adjusting”. I am at a loss how this will benefit consumers. Moreover, I don’t see how the ownership of the pipeline network will affect any of the transition issues.
The NY HEAT Act (A4592/S2016) will relieve us of the hook-up cost, and stop the continued expansion of the gas system that is moving New York further away from the goals of the climate law. Thankfully, utilities like National Grid are already adapting and adjusting: as New York considers legislation like NY HEAT, the company is looking to sell parts of its pipeline network to meet future clean energy demand. Last year, it sold a majority share of its gas distribution business in the United Kingdom.
If those reasons are not enough to ensure savings, the authors proposed legislation will simply mandate that a price cap. In typical political fashion the target constituency (low- and middle- income families) gets the benefits of the price cap but the question of who pays the transition costs is ignored. I agree that there should be an energy poverty component to the Climate Act implementation because this policy should not hurt those least able to afford the increased energy costs. However, I have tried and failed multiple times to find out where New York stands relative to the 6% of income threshold referenced in the following paragraph. Does it cover just the cost of electricity and natural gas utilities? Does it include other energy costs such as personal transportation for rural residents? How many families exceed this threshold today and how will the future policies affect the totals? All that information must be known to find out how much the rest of the ratepayers will have to pay to subsidize the price cap.
The savings don’t end there. For low- and middle-income families, NY HEAT would put a price cap on electricity bills, to limit paying no more than 6% of income to stay warm and cook dinner.
In the last legislative session the Utility Thermal Energy Network and Jobs Act was passed to spur development of thermal energy networks which are just community-based ground water heat pump systems. The authors of this legislation claim that NY HEAT will support that initiative by preventing billions of dollars to replace natural gas infrastructure. Left unsaid is just how much this more expensive technology will cost relative to the existing fossil-fired system.
NY HEAT clears a path for utilities to build renewable thermal energy networks instead of replacing and expanding the gas network. Doing so will create thousands of new clean, green energy jobs for union pipefitters and electrical workers for decades to come. It could also prevent the billions of dollars of spending on replacement pipes that gas utilities are planning by 2040 and gas customers would get stuck paying for in the decades to come.
I have often said that there is a disconnect between reality and the understanding of proponents of the Climate Act. Fahy’s claims in the next paragraph provides a vivid example.
New York’s electrical grid maintains a surplus of energy that will support new, all-electric construction. While gas furnaces on the market today require electricity to power their electronics and fans, there are new technologies that keep electric equipment like heat pumps running when the power goes out.
Fahy claims that there is “a surplus of energy that will support new, all-electric construction”. However, she references the installed reserve margin which is the “minimum level of capacity, beyond the forecasted peak demand, which utilities and other energy providers must procure to serve consumers.” For starters the installed reserve margin is a capacity measure and not energy. More importantly, that parameter is used to ensure that the existing system can reliably meet peak loads. It is the minimum level of reserve capacity to keep the lights on. It provides no surplus available for additional load associated with new electric construction. Reality is that the New York Independent System Operator’s Resource Outlook includes four key findings: an unprecedented buildout of new generation is needed, load will increase when we electrify everything, transmission is necessary and must be expended to get diffuse renewables to New York City and a new resource has been identified: Dispatchable Emissions-Free Resource (DEFR). (see following figure) Those findings suggest significant concerns totally overlooked by the Progressive politicians pushing Climate Act implementation legislation.
The other claim is that there are new technologies to keep electric equipment running when the power goes out refers to using power from charged personal electric vehicles to “ power key devices, like cell phones, and appliances, and even your entire home for multiple days.” Maybe on the best day but during a really cold period the idea that family electric car can power the home as needed is wishful thinking and overlooks the point that if it is powering the home it cannot be used for transportation.
Fahy and other advocates refuse to acknowledge the possibility that fossil fuel interests could align with the interests of the majority of New Yorkers who appreciate and value the resiliency and affordability of our existing fossil-fueled infrastructure. Their response is to denigrate any of their arguments as shown in the following paragraph. The article referenced refers to proposed legislation that would have changed the emissions accounting system. I think that it was much ado about nothing. What has not been recognized in any commentary on the cap and invest proposal is that New York’s unique approach makes it impossible for New York to join other jurisdictions in such a program. As a result, New York will have to develop all the infrastructure for its own system at a significant cost and implementation time delay.
The gas industry wants to prevent alternative options for a reliable, affordable, and green transition. Unsurprisingly, they were a force behind the recent unsuccessful push to undermine New York’s climate law – which would have enabled the combustion of more gas, for longer.
Proponents earnestly believe that the Climate Act Scoping Plan is a credible design for the future energy system. I disagree. There is no feasibility analysis that proves that the list of strategies in the Integration Analysis will work as proposed and can be implemented on the schedule necessary to meet the Climate Act targets. There is inadequate documentation for the costs of each strategy and we are left only with a hollow slogan that the costs of inaction are more than the costs of action. The Hochul Administration has refused to provide estimates of consumer impacts to date. When the cap and invest cost estimates were recently calculated, the Administration floated the idea to change the accounting methodology. Despite promises they have yet to provide detailed cost documentation. The Administration has not provided a cumulative environmental impact assessment for the Scoping Plan mitigation scenarios which include substantially more wind and solar resource development and an entirely new dispatchable emissions-free resource than included in any assessments to date. There is no implementation plan. As a result, there are no limits on utility-scale solar development impacts on prime farmland, inadequate on-going monitoring and no backup plan if offshore wind development construction is found to adversely affect whales, and no plan to develop the dispatchable emissions-free resource that is necessary but does not currently exist. I am convinced that the Scoping Plan will do more harm than good.
Our climate plan was years in the making. It was created in consultation with multiple expert advisory panels, subject to public hearings, and incorporated tens of thousands of New Yorkers’ comments. New Yorkers know that we can get off gas and have affordable, reliable energy and a stable climate — but that will take ratepayer funds currently used for expanding fossil fuel infrastructure to be reallocated.
Fahy’s claim that the $200 million savings due to the proposed legislation will save New Yorkers money ignores the costs of the alternatives. That subsidy is peanuts compared to all the costs of alternate technologies.
If we want to save New Yorkers money and lead on climate, we must stop asking New York families to foot the $200 million per year bill to continue constructing and maintaining fossil fuel infrastructure that will inevitably become obsolete. As the Legislature continues its post-budget session, we must pass NY HEAT to move towards our clean energy future.
Proponents refuse to acknowledge the possibility that the majority of New Yorkers appreciate and value the resiliency and affordability of our existing fossil-fueled infrastructure. New York GHG emissions are less than one half of one percent of global emissions and global emissions have been increasing on average by more than one half of one percent per year since 1990. Therefore the effect of eliminating our emissions will be wiped out by emission increases elsewhere. While that does not mean that New York State should not do something, it does mean that there is time to address the ramifications of the proposed wholesale shift to unwanted technology without proper accounting of costs, impacts to reliability, environmental impacts and implementation consequences.
The Hochul Administration has not admitted to the total costs, has provided inadequate documentation for anyone to derive the costs from their analyses, and has refused to provide consumer cost estimates. Until such time that there is a full accounting of the costs necessary to achieve the full net-zero transition and not just the Climate Act program costs, I think it is inappropriate to pass any implementing legislation like the NY HEAT bill. As shown here, the rationale used by the authors of this particular legislation is not credible to support its claims.