Climate Act Coercion

I recently described the New York State Comptroller’s Office Renewable Electricity in New York State Review and Prospects report (“Comptroller Report”) that addressed progress and prospects for attaining New York’s Climate Leadership & Community Protection Act (Climate Act) 2040 mandate for a zero-emissions electric grid.  This post addresses the following quote from that report: “the Enacted Budget for SFY 2023-24 included a provision to hold the electric bills of low-income customers to 6 percent of household income if the customers participate in State programs to electrify home heating and appliances and undertake efficiency upgrades.”

I have been following the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 350 articles about New York’s net-zero transition.  I have devoted a lot of time to the Climate Act 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.  It includes an interim 2030 reduction target of a 40% reduction by 2030 and a requirement that all electricity generated be “zero-emissions” by 2040. 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.  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. 

The provision mentioned in the Comptroller Report that conditionally limits electric bills of low-income customers to 6 percent of household income is an example of the programs that are being implemented to reach the Climate Act targets.  Until reading the quote I was unaware of this new law.  The condition “if the customers participate in State programs to electrify home heating and appliances and undertake efficiency upgrades” caught my attention and spurred this post.

Energy Affordability Program

The FY24 Enacted Budget included the following funding within the Public Service Commission’s Aid to Localities Budget (A.3003-D of 2023, signed Chapter 53 of 2023).  The Energy Affordability Program is allocated $200 million in new funding for utility bill relief for residential customers that do not currently qualify for the Department of Public Service’s current energy affordability policy program, but whose income is below the State median income. The Public Service Commission is directed to consider the feasibility of using area median income or other eligibility thresholds in the event the use of State median income prevents reaching all households that have an energy burden greater than 6%. In addition to Statewide residents, residential customers of electric corporations regulated by the Public Service Commission (PSC) and the Long Island Power Authority, and its service provider Public Service Enterprise Group-Long Island (PSEG-LI) are eligible to participate in the program. This appropriation may be disbursed to utilities, including LIPA, and then disbursed to ratepayers.

The Department of Public Service (DPS) is directed to provide an energy affordability guarantee to residential customers participating in home electrification efforts through the New York State Energy Research and Development Authority (NYSERDA)’s EmPower Plus Program such that EmPower Plus participants pay no more than 6% of household income on utility bills for the duration of the estimated useful life of an EmPower Plus electrification project.  DPS is authorized and directed to establish a cap on such customers’ energy usage applicable to the guarantee.

Discussion

Whenever I start researching a new topic for a blog article about the Climate Act, I have found that it is more complicated and leads to more questions than I had expected.  This topic was no exception.  In this case several things came up.  I was not aware of the Department of Public Service’s current energy affordability policy program.  There is a reference to a six percent energy burden target that I have seen elsewhere but have yet to find what I think represents an official definition or any status data.  I have heard of the EmPower program but never looked into it.  My primary concern is the conditional statement that is associated with EmPower program eligibility for a price guarantee.  I will address these below.

The Energy Affordability Working Group  August 15, 2023Status Report explains how this group associated with the energy affordability policy program was formed:

On August 12, 2021, the Commission issued its Energy Affordability Policy Phase 2 Order (Phase 2 Order) adopting certain modifications and improvements to the energy affordability framework established in the Affordability Order, Implementation Order, and Rehearing Order. Among the improvements to the Energy Affordability Policy directed in the Phase 2 Order, the Commission established an Energy Affordability Policy Working Group (Working Group) that encouraged participation from all interested stakeholders for the advisement of improving energy affordability.  

The working group is associated with two PSC cases: CASE 23-M-0298 In the Matter of Budget Appropriations to Enhance Energy Affordability Programs and  CASE 14-M-0565   Proceeding on Motion of the Commission to Examine Programs to Address Energy Affordability for Low Income Utility Customers.  The status report gives an overview of what they do.

One requirement is a submittal of low-income data to the docket.  On a regular basis Central Hudson Gas and Electric Corporation, Consolidated Edison Company of New York, National Fuel Gas Distribution Corporation, Brooklyn Union Gas Company, Keyspan Gas East Corporation,  Niagara Mohawk Power Corporation, New York State Electric and Gas Corporation, Rochester Gas and Electric Corporation, and, Orange & Rockland Utilities submit data in a proscribed format.  As an example of yet another question that comes up whenever I start digging note this: as far as I can tell the low-income information reports do not cover Long Island electric customers or anyone from the municipal utilities.  I think that is odd but I am not going down that rabbit hole to determine why or if my interpretation is incorrect.

I did combine available data from the most recent reports in a spreadsheet to create the following summary table.  I believe the low-income information reports only cover the participants in the utility Energy Affordability Programs.  If that is the case then the number of participants who are in arrears and the amounts owed  under estimates the state totals.  It is worrisome enough that 155,626 people were sent termination notices and their amount owed is $178.7 million.  The $200 million in this law would barely cover the emergency assistance needed of those people. 

PSC Energy Affordability Submittal Summary

I have seen references to a six percent energy burden target before but not as an official policy.  For example, a recent legislative proposal included a requirement for state agencies to identify policies to ensure affordable housing and affordable electricity (defined as electricity costs no more than 6% of a residential customer’s income) for all-electric buildings.  Alternatively, Addressing Energy Poverty in the US offers other possible criteria:

According to the U.S. Department of Energy, the average energy burden for low-income households is 8.6%. That is three times higher than for non-low income households, which is about 3%.  And according to the Kleinman Center for Energy Policy at University of Pennsylvania, more than one-third of US households are experiencing “energy poverty,” having difficulty affording the energy they need to keep the lights on and heat and cool their home. 

In my opinion there are two issues with the six percent electric burden criterion.  It appears to only apply to all-electric homes and that ignores the needs of people who heat their homes with other fuels.  With regards to the rural poor, the urban politicians who support the Climate Act overlook the fact that many people live in remote rural areas because that is the only location where they can afford housing.  As a result, transportation costs are a major part of their energy budgets because they must travel longer distances to work.

There is another problem with the energy burden criterion.  I have been unable to find where the state stands relative to the six percent target or any other energy poverty criterion  As part of a total energy transition, it seems obvious that we need a baseline status so that we can track whether the program is forcing more people into energy poverty.  The necessary data to calculate the status are not included in the energy affordability policy program reports and I could not find any summary that included it.

The impetus for this post was the condition that in order to get support for an energy affordability guarantee, customers must “participate in State programs to electrify home heating and appliances and undertake efficiency upgrades.”  I am concerned that the rural poor are being overlooked in low-income support programs and this is a specific example.  I recall that there was a qualifying statement in the Draft Scooping Plan that noted that some residential building shells could not be upgraded because of the building type or historical significance.  For example, consider that the Integration Analysis assumes that building shell upgrades are not possible for mobile homes.  Without building shell upgrades, air-source heat pumps are not a viable heating option.  Does that mean that residents in mobile homes or other structures that cannot be improved are not eligible for these benefits?

I had to research EmPower program to determine how that condition might be implemented.  According to the webpage:

EmPower+ helps low- and moderate-income households save energy and money toward energy improvements made to their property.  Through EmPower+:

• Households can receive a no cost comprehensive home energy assessment to pinpoint where energy and dollars are being wasted and receive a customized plan to lower energy usage.
• No-cost direct install improvements identified during the assessment can be installed by participating program contractors.
• Households can receive financial discounts on the cost of energy efficiency improvements.

The program is open to income-eligible owners and renters of 1-4 family households.

The eligibility guidelines do not mention anything related to feasibility.  The eligibility guidelines webpage notes:

Homeowners and renters must meet income requirements to qualify for EmPower+. You may be eligible if you can answer “yes” to these statements:

My household income is below 80 percent of the State/Area Median Income or lower
OR
I reside in a single family home located in a geographically eligible territory
OR
I participate in a utility payment assistance program

I think this is an overlooked concern in the legislation.  The energy improvements are contingent upon the comprehensive home energy assessment.  I believe that there will be instances where at least some of the potential electrification options will not be effective replacements.  There may also be situations in rural areas with poor reliability that electrification of any appliance is a safety issue.  It is not clear whether there are any caveats to the requirement that only customers who participate in State programs to electrify home heating and appliances and undertake efficiency upgrades are qualified for the six percent of household income guarantee. There should be assistance programs for people who have participated in the EmPower Plus home energy assessment but may not be able to implement all the home energy improvements.

If any reader can provide insights on these topics, I would appreciate hearing from you.

Conclusion

The Climate Act-related Public Service Commission’s Aid to Localities Budget included in the FY24 Enacted Budget is an example of the myriad laws, regulations, and policies being enacted to implement the Climate Act net-zero transition.  From the start of this process there has been inadequate evaluation of these programs to ensure that they do what they are supposed to do without unintended consequences.

In this instance, I object to the implicit coercion that there will be a guarantee that the energy burden will not exceed six percent only if customers participate in State programs to electrify home heating and appliances and undertake efficiency upgrades.  It appears the authors of the law did not consider the fact that Integration Analysis admits that not all residences can be electrified effectively and safely or that there are limitations on efficiency upgrades.  If there are no relevant caveats to implementation, then needy low-income citizens will be adversely affected.

Even if my interpretation is wrong and this is not a potential issue, there is a serious shortcoming in the implementation process.  There is not official energy poverty metric that covers all energy use and there is no status data available for the frequently referenced six percent electric bill target.  How will we know if there are increasing energy poverty issues associated the transition unless someone is tracking it?