Climate Act Energy Affordability

Although proponents of the net-zero transition in New York and elsewhere continue to claim that building wind and solar energy resources is the cheapest resource, reality is catching up. If this is true, then why aren’t electricity bills going down?  I believe that affordability is the biggest challenge for the Climate Leadership & Community Protection Act (Climate Act) net-zero transition mandate.   This post addresses affordability and risks that proponents who claim it is cheaper ignore.

I am convinced that implementation of the Climate Act net-zero mandates will do more harm than good because of reliability and affordability risks.  I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written nearly 600 articles about New York’s net-zero transition.  The opinions expressed in this article do not reflect the position of any of my previous employers or any other organization I have been associated with, these comments are mine alone.

Lessons for an Energy Affordability Agenda

A recent article by Lauren Teixeira at the Ecomodernist Blog examines the affordability of renewable energy relying heavily on a new study from Lawrence Berkeley National Laboratory (LBNL) by Ryan Wiser, Eric O’Shaughnessy, Galen Barbose, Peter Cappers, and Will Gorman (LBNL Report).  The LBNL Report examined state-level trends in U.S. retail electricity prices.  There is a wide range of state-level trends.

The LBNL Report and Teixeira emphasize that there are many facts affecting electricity prices. Teixeira explains that the LBNL Report distinguishes between market-driven renewables, which show a statistically insignificant negative effect on prices, and policy-mandated renewables that are linked to significant price increases. ​The LBNL Report found that generation mix effects are not the biggest drivers of electricity prices.  Instead, the key factors driving price increases include utility infrastructure spending, load dynamics and factors like utility spending on wildfire mitigation are more influential on electricity prices.

There is an important finding relative to the Climate Act.  The abstract for the LBNL Report notes:

States with the greatest price increases typically exhibited shrinking customer loads—partially linked to growth in behind-the-meter solar and end-use energy efficiency—and had renewables portfolio standards (RPS) that required additional renewable energy supply. By contrast, the 75 percent of recent utility-scale wind and solar deployment that occurred outside Renewable Portfolio Standard (RPS) programs had no broadly discernible positive impact on retail prices and had suggestive (weak) evidence of reducing prices over the most recent time periods.

This is an unacknowledged implementation constraint for the Climate Act.  States with favorable renewable resources, like Texas, can lower prices without mandates but New York’s comparatively poor resources face higher costs because more capacity must be installed to produce the same amount of power, additional energy storage is required, and more transmission must be built for the greater capacity development.  As a result, it is unlikely that renewable energy could ever be cheaper.

If affordability is a priority, Teixeira advocates removing subsidies and policies favoring specific energy sources with a focus on market efficiency. ​ That is the fundamental problem with the Climate Act energy transition.  The Climate Act requires subsidies and includes mandates for specific energy technologies.  The article criticizes simplified narratives in the renewable energy debate, arguing for a nuanced understanding of the interactions between generation types, policies, and geographic factors. ​ Given the importance of energy affordability she calls for a shift from technology advocacy to a focus on consumer affordability, recognizing the trade-offs inherent in energy policy. ​

There is one other aspect of Teixeira’s article that is relevant to the New York discussion.  State agencies have claimed that renewable energy is cheaper because of lower price volatility.  Teixeira’s explains that the merit order effect impacts that claim.  The merit order effect explains how electricity prices are determined by the marginal costs of power plants, with cheaper sources like wind and solar being dispatched first. ​As a result, renewables, having near-zero marginal costs post-construction, push out more expensive fossil fuel generators, leading to lower wholesale electricity prices. ​However, without adequate energy storage in poor resource locations, it is impossible to push out fossil resources so it may be necessary to eventually subsidize them.  In the short term, as renewable energy increases supply during peak periods, it shifts the supply curve, reducing prices for all generators due to marginal pricing.  However, that means the costs necessary to support the resources that come on line during the worst peak periods must be secured during the peaks.  That means that price volatility during peaks will be higher as a feature not a bug of the system.

Teixeira claims that the costs of solar and wind energy have dramatically decreased, with solar prices dropping by 88% since 2009. ​She notes that while renewables can lower prices, they may also lead to “price cannibalization,” where excess renewable generation during high output periods can depress prices, sometimes resulting in negative pricing. Parker Gallant explains how this led to Ontario ratepayers coughing up $14 million in two days.  Finally, she argues that falling battery storage costs are expected to mitigate these challenges, enhancing the viability of renewables. ​ I disagree with her expectation that renewables can be viable if the underlying resources are weak like New York.

In my opinion, the LBNL Report and Teixeira both miss the effect of what I think is the intractable problem associated with dark doldrums. ​ Dark doldrums are extended periods of low wind and solar resource availability.  The LBNL report analyzed 24 years of U.S. data and found that states with higher renewable energy penetration see lower electricity price increases over time.  However, that reduction in prices does not account for the reliability risks of infrequent prolonged periods of low renewable resource availability.  Using Texas as an example, while they have great wind and solar resources on average, in February 2021, the Texas electric grid failed to provide sufficient energy when it was needed.  The storm and accompanying dark doldrum was the worst energy infrastructure failure in Texas history 4.5 million homes and residences were without power, at least 246 people died, and total damages were at least $195 billion.  Apologists for renewables claim the disaster was caused because other resources did not cover the lack of wind and solar.  In my opinion, electric market pricing must reflect the fact that wind and solar are intermittent and that the costs for backup during the worst periods should reflect that requirement.  Proponents claim that renewables act as fuel-saving resources that reduce the operational need for costly gas and coal plants and that results in system-wide savings for consumers.  However, if insufficient investments are made in backup resources, current policies are risking catastrophic blackouts that will wipe out all the savings and directly lead to injuries and death. 

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State Supplemental Letter

Even the New York State Attorney General office agrees that the current Climate Act implementation schedule will lead to infeasible costs.  On Oct. 24, 2025,  the New York Albany Supreme Court ruled that the New York State Department of Environmental Conservation (DEC) failed to implement regulations necessary to comply with the Climate Act mandates.  During the legal process the State submitted a letter  that addressed “two categories of new developments: (1) the publication of the 2025 Draft New York State Energy Plan by the New York State Energy Planning Board on July 23, 2025 and (2) additional actions by the federal government that impede New York’s efforts to achieve the Climate Act.  The letter argued that it was inappropriate to implement regulations that would ensure compliance with the 2030 40% reduction in GHG emissions Climate Act mandate because meeting the target is “currently infeasible”. 

Ordering achievement of the 2030 target would equate to even higher costs than the net zero scenarios and would affect consumers even sooner. Undoubtedly, greenhouse-gas reducing policies can lead to longer-term benefits such as health improvements. This does not, however, offset the insurmountable upfront costs that New Yorkers would face if DEC were forced to try to achieve the Legislature’s aspirational emissions reductions by the 2030 deadline rather than proceeding at an ambitious but sustainable pace.

The letter concluded that the Climate Act is unaffordable:

Petitioners have not shown a plausible scenario where the 2030 greenhouse gas reduction goal can be achieved without inflicting unanticipated and undue harm on New York consumers, and the concrete analysis in the 2025 Draft Energy Plan dispels any uncertainty on the topic: New Yorkers will face alarming financial consequences if speed is given preference over sustainability.

Discussion

It is no longer possible to argue that New York can afford to implement the Climate Act mandates.  The State Attorney General’s office argued that meeting the 2030 emission reduction mandate was infeasible.  The LBNL Report found that States like New York that have RPS that require additional renewable energy supply but do not have adequate renewable energy resource potential for those resources to be developed without subsidies have seen and will continue to see higher retail energy prices.

Consistent with the Draft State Energy Plan, the LBNL Report found that renewable energy deployment was not the primary driver of increased electric prices.  The LBNL Report noted price increases were associated with load dynamics, extreme weather, natural disasters, and wildfires contributed to sizable price increases in some states.  The Draft State Energy Plan argued that electric energy prices increased because of infrastructure investment requirements, transmission system expansion, and distribution system upgrades as well as increasing loads.

However, there is no question that energy affordability is a problem.  Governor Hochul has expressed concerns about the affordability impacts of Climate Act implementation, stating worries about costs and “collateral damage” to New York families.  I have long argued that components of  New York Public Service Law  Section 66-p (4). “Establishment of a renewable energy program” should be considered because it includes safety valve conditions for affordability and reliability.  § 66-p (4) states: “The commission may temporarily suspend or modify the obligations under such program provided that the commission, after conducting a hearing as provided in section twenty of this chapter, makes a finding that the program impedes the provision of safe and adequate electric service; the program is likely to impair existing obligations and agreements; and/or that there is a significant increase in arrears or service disconnections that the commission determines is related to the program”.  The increase in arrears metric is an indirect indicator of affordability and I have shown that there has been a significant increase in arrears since Climate Act implementation began.

Even if Climate Act costs are not the primary driver of retail electric price increases can we afford to continue the net-zero transition?  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.  Anything we do is subsumed by increases elsewhere so that this is just political theater that negatively impacts those least able to afford energy increases.

Conclusion

The Attorney General office says compliance with 2030 emission reduction mandates is infeasible.  The LBNL Report suggests that states like New York that have policies that mandate renewable deployment but have renewable resources that require subsidies will increase costs.  Clearly, it is time for the New York Legislature to revisit the Climate Act and establish affordability metrics to protect New Yorkers.