Category: Climate Act Costs & Benefits

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. 

​

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.

As electric energy prices increase substantially the blame game starts.  On October 23, 2025 the New York State Assembly Standing Committee on Energy had a public hearing “Protecting Residential Ratepayers from Certain Increased Energy Costs”.   This article explains why I think this heating misses the point of the affordability crisis affecting New Yorkers.

I am convinced that implementation of the New York Climate Leadership & Community Protection Act (Climate Act) net-zero mandates will do more harm than good if the future electric system relies only on wind, solar, and energy storage 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. 

Hearing Announcement

The hearing announcement states:

The United States Energy Information Administration’s April 2025 “Annual Energy Outlook” estimates that electricity consumption in the United States will increase to record highs in 2026, from 4,097 billion Kilowatt Hours (kWh) in 2024, to 4,283 billion kWh by 2026, driven primarily by large energy users such as computing services. The New York Independent System Operator’s (NYISO) “2025 Power Trends Report” confirms that this trend will likely also occur in New York, estimating that an additional 1,600 megawatts of power could be needed by 2030, driven primarily by these large energy users.

This increased energy demand, along with the accompanying need for infrastructure and generation, is expected to lead to higher utility bills for consumers in the coming years. This phenomenon has been seen in other states, such as in Illinois where data has shown that Commonwealth Edison’s existing customers paid over 91% of the costs associated with new large energy users. However, some states, such as Georgia and Oregon, have taken action to protect residential customers from such rate increases. The purpose of this hearing is to examine measures that may be effective in protecting residential ratepayers against increased energy costs associated with the integration of new large energy users.

I think this hearing is part of an effort by supporters of the fossil fuel transition to net-zero is deflect concerns about costs away from the Climate Act.  They argue that infrastructure costs associated with increased load driven primarily by large energy users such as computing services is driving the utility rate increases. 

The hearing announcement references the New York Independent System Operator’s (NYISO) “2025 Power Trends Report” estimates that an additional 1,600 megawatts of power could be needed by 2030, “driven primarily by these large energy users”.  Climate Act proponents are deflecting net-zero transition costs by blaming load growth due to energy centers and semiconductor manufacturing plants.  There is no question that this load growth impacts electric bills in New York, but context is important.  While those costs are substantial, they are dwarfed by the infrastructure support needed for electric grid transition to wind, solar, and energy storage displacement of fossil fuels.

Impact of New Large Loads on Electric Bills ​

I acknowledge the use of Perplexity AI to generate this summary of potential impacts on electric bills. The proposed Clay, NY Micron chip fabrication plant could use 16,000 gigawatt-hours annually which is more than the energy used by Vermont and New Hampshire and works out to be about 11% of New York’s total usage. ​ Loudoun County, Virginia—specifically the “Data Center Alley” area around Ashburn and Sterling—hosts the world’s highest concentration of data centers, with approximately 199 operational facilities as of 2025 and 40GW of contracted capacity. The higher demand from these sources leads to increased wholesale electricity prices.  In addition utilities must also invest in infrastructure upgrades for these large loads, resulting in higher delivery charges that are typically socialized across all ratepayers.

New York Assemblyman Jonathan Jackobson has proposed legislation that aims to prevent the transfer of infrastructure costs from large users to everyday consumers, targeting costs specifically to data centers and chip fabs. Meanwhile, discussions are ongoing about special contracts that would require major users to cover their infrastructure costs and reduce load during peak times, but these measures are not yet widespread. ​

On the other hand, increased electricity sales could help spread fixed costs, potentially lowering per-kWh delivery rates.  Sadly, this effect is usually less than the impact of new loads. ​There is the potential for demand response agreements with large users that could enhance system reliability and mitigate severe price spikes. ​

New York Future Loads

​I looked at load projections for New York.  The NYISO 2025 Load & Capacity Data Report (Gold Book) includes two spreadsheets: 2025 Gold Book Higher Demand Scenario Tables and the 2025 Lower Demand Scenario Tables that report future energy usage (GWh).  I used these tables to extract the expected sources of future load growth.  Unfortunately, the Gold Book does not break out the energy capacity (MW) for the same categories as the NYISO Power Trends report which makes comparison to the hearing announcement projection difficult.  Because ratepayers pay for energy and not capacity, I think the better metric is energy.

 In the following table I combined Gold Book projected annual energy load forecast (GWh) tables I-15a: and I-16a.  I extracted the NYISO projected future load for five different load categories: storage net energy consumption, electric vehicles, building electrification, large load projects and electrolysis.  Table 1 compares the large load projects energy relative to GHG reduction programs.  The GHG reduction programs are the sum of the other four categories that, were it not for efforts to reduce GHG emissions by the Climate Act, legacy New York programs and Federal policies, would not exist.  According to the NYISO Gold Book projections, in 2025 1.2% expected energy use is due to the GHG reduction programs and 2.4% is due to large load projects for the lower demand forecast and 1.4% due to the GHG reduction programs and 2.4% for large load projects for the higher demand forecast. 

Table 1: Gold Book Projected Annual Energy Load Lower and Higher Demand Forecasts – GWh

Assembly Bill A9064 presumes that prohibiting utilities from passing along the “costs of capital expenditures or maintenance of infrastructure resulting from the building or operation of a data center or semiconductor fabrication plant” will substantively reduce ratepayer costs.  While true it ignores the fact that GHG emission reduction load increase will be more than double the energy load increase expected for the large load projects.

Discussion

The ideologues who insist that the net-zero transition must proceed on the arbitrary schedule of the Climate Act do not generally support development of data centers and semiconductor fabrication plants.  I think continuing operations of crypto mining are also on their hit list.  In all three instances, they argue that they require a lot of energy and water and are responsible for electricity price increases. 

In my opinion, the analyses supporting their arguments were contrived to support the concept that they increase electricity prices.  Another characteristic of the analyses is that they ignore any potential positive impacts.  Vilifying chip fab plans ignores the tremendous economic benefits of hundreds of jobs, for example.  Ideologues tend to ignore any tradeoffs and that does not make for rational policy.

Conclusion

There is an energy affordability crisis.  The scramble to find excuses for higher electric prices to cover the costs of decarbonizing the energy system is on.  It is long past time for Climate Act supporters to define acceptable affordability, track where we stand relative to their metric, and commit to stop the insanity when costs inevitably exceed their limit.  Blaming data centers and chip fabrication plants is misdirection.

There finally has been a long overdue admission that the Climate Leadership & Community Protection Act (Climate Act) might not be affordable.  Buffalo TV Station WRGZ 2 On You Side posed questions to the governor that forced Governor Hochul to suggest that a “slow down” on the Climate Act was needed because of affordability concerns.

I noticed this article as I was preparing this article on the New York Department of Public Service (DPS) “broad mandate to ensure access to safe, reliable utility service at just and reasonable rates.” The fact is that Climate Act implementation process pushes ahead because the law says so while at the same time DPS ignores another law that says that there are limits.  This is an update to earlier posts about Climate Act Safety Valves and the DPS response to my safety valve recommendations.  We shall see if the Governor’s revelation slows the process down.

I am convinced that implementation of the Climate Act net-zero mandates will do more harm than good because the energy density of wind and solar energy is too low and the resource intermittency too variable to ever support a reliable electric system relying on those resources. I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 550 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.

Overview

The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050.  The Climate Action Council (CAC) was responsible for preparing the Scoping Plan that outlined how to “achieve the State’s bold clean energy and climate agenda.”  After a year-long review, the Scoping Plan was finalized at the end of 2022.  Since then, the State has been trying to implement the Scoping Plan recommendations through regulations, proceedings, and legislation. 

Safety Valves

My previous article about safety valves described Public Service Law (PSL) Section 66-P Establishment of a renewable energy program that provides for bounds on implementation. Section 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”.

I have started following some of the rate cases for electric and gas services which are universally requesting markedly higher rates.  Based on what I have found so far program costs to implement the Climate Act mandates are clearly part of the reason that the costs are increasing.  The rationale to include those programs is that the Climate Act is a law that requires it. Thus far, DPS has ignored the safety valve provisions of 66-p(4).

As documented in my DPS response to my safety valve recommendations article, DPS Staff said that this issue should be addressed elsewhere:

Finally, the issues raised by Caiazza and Kontogiannis regarding the CLCPA are beyond the scope of this rate case. The Commission has instituted a proceeding to address the CLCPA, and Caiazza and Kontogiannis’ statewide concerns are more appropriately addressed in that proceeding.

There are numerous generic proceedings that were initiated or expanded to comply with the directive for the Commission to establish a renewable energy program.

I researched these other proceedings.  The DPS Document and Matter Management (DMM) system is the online repository for all cases before the Public Service Commission.  There are thousands of cases in the system and individual cases can have thousands of filings.  I used Perplexity AI to generate summaries and references that are documented in a white paper. I entered the following prompts on [1 July 2025]:

• Find all explicit recommendations for affordability related to implementation of the Climate Leadership & Community Protection Act in the New York DPS DMM system.
• Find all explicit recommendations for reliability related to implementation of the Climate Leadership & Community Protection Act in the New York DPS DMM system.

Note that the Perplexity link also includes two other questions: “How does the DMM system document affordability criteria for CLCPA implementation” and “How does the DMM system evaluate household ability to pay energy costs” that I posed to clarify the affordability definition.

DMM Affordability Reference: Case 22-M-0149

Case 22-M-0149: Proceeding on Motion of the Commission Assessing Implementation of and Compliance with the Requirements and Targets of the Climate Leadership and Community Protection Act responds to a Public Service Commission order in May 2022. It required the major utilities to

• Develop a proposal for an annual Greenhouse Gas Emissions Inventory Report, including “detailed requirements and the methodology used to calculate total gas system-wide emissions,” and then report annually;
• Include, in all future rate filings, an “assessment of the impacts that the utility’s specific investments, capital expenditures, programs and initiatives included in the rate filing will have on its greenhouse gas emissions from its gas network, specifying the potential emissions impacts of each”;
• “Develop a Greenhouse Gas Emissions Reduction Pathways Study Proposal that analyzes the scale, timing, costs, risks, uncertainties and customer bill impacts of achieving significant and quantifiable reductions in carbon emissions from the use of delivered gas”;
• Describe in all future rate filings, “the investments, programs and initiatives necessary to achieve the objectives described in the Greenhouse Gas Emissions Reduction Pathways Study.”

In addition to the requirements for the major utilities the order included two other items:

• Department of Public Service Staff is directed “to present an annual informational item detailing overall compliance with Climate Leadership and Community Protection Act as discussed in the body of this Order”
• Seek public comment regarding “utility ownership of both distributed energy resources and large-scale renewables contemporaneously with the issuance of this Order.”

The annual informational report description stated:

Staff is directed to present to the Commission an annual informational item detailing the Commission’s actions and DPS’ activities associated with overall compliance with the CLCPA mandates. This presentation shall include, but not be limited to, the emissions associated with electric and gas usage in the State, as identified in the annual GHG Emissions Inventory Reports, progress on achieving the targets mandated within the renewable energy program (including the biannual review required by the CLCPA), the cost and benefits to ratepayers of CLCPA investments over the prior calendar year, including the purchase of RECs and ORECs by LSEs, the costs of local and bulk transmission facilities constructed for purposes of facilitating compliance with CLCPA targets, and the cost recovery associated with NE:NY and other energy efficiency programs implemented by the Utilities and NYSERDA.

The annual informational report should be a primary source for assessing the affordability impacts of Climate Act implementation.  Unfortunately, the Order included a condition that negates its value. “In the Secretary’s sole discretion, the deadlines set forth in this Order may be extended.”   The first annual Informational Report was released in July 2023, but nothing was released in 2024 and to date in 2025.  Note that the requirement is just for numbers.  There is no affordability mandate to relate the costs to the ability to pay.

The docket for Case 22-M-0149 only had 93 filed documents on July 2, 2025.  Most of the filings were related to the GHG Emissions Inventory Report or a request for information about Federal funding for the utility Climate Act work.  Earlier this year there were two requests for an update to the annual informational report and a reply from the Department of Public Service as chronicled here.

There is no apparent sense of urgency in this Proceeding.  The second annual informational report is a year late and the utility GHG emission inventory report “remains in a proposal stage”.  There hasn’t been a response to the last filing on April 14, 2025.

DMM Affordability References: Case 14-M-0565 and Case 23-M-0298

Case 14-M-0565: Proceeding on Motion of the Commission to Examine Programs to Address Energy Affordability for Low Income Utility Customers mandates that major utility companies provide quarterly updates for affordability-related metrics.  Notably that includes the number of customers in arrears that is parameter mentioned in PSL 66-P(4). 

Case 23-M-0298: In the Matter of Budget Appropriations to Enhance Energy Affordability Programs is closely linked to the other Proceeding.  Frankly I am not sure why this is separate.  Of note is the March 2025 Staff White Paper on Implementing an Enhanced Energy Affordability Policy.  It includes a procedural history that explains how energy affordability has been addressed and proposes a pilot program that builds on existing programs.  It does not mention the Climate Act.

These two proceedings address general affordability concerns.  They do not directly consider the effect of the Climate Act on affordability.

Discussion

In my opinion, the PSC and DPS have dropped the ball on Climate Act affordability.  No one has ever argued that affordability should not be a consideration.  The problem is that the Hochul Administration has not bothered to define what is acceptable.  A Business Council of New York memo on Climate Act implementation made the point that the “CLCPA only requires the consideration of equitable impacts and cost minimization, in effect making affordability and cost-effectiveness of CLCPA implementation measures a consideration, not a requirement.”

It was inevitable that the impact of the Climate Act on energy affordability would become a political liability.  On July 1, 2025 Governor Hochul suggested that a “slow down” on the Climate Act was needed.  Buffalo TV Station WRGZ 2 On You Side posed questions to the governor that forced her to admit “At the end of her long response on utility rates and energy strategy, there was this summation from Hochul: “You’re absolutely right. Utility costs are a huge burden for families, and I’ll do whatever I can to alleviate that.”  The entire article is well worth a read because it reveals that the Administration has realized that an “all of the above energy strategy” that includes nuclear power is needed.

There is no more direct and immediate impact of Climate Act implementation to New Yorkers than utility bills.   Hopefully, the Administration will realize that PSL 66-P(4) safety valve considerations can be interpreted to trigger the PSC to conduct a hearing that could result in a decision to “temporarily suspend or modify the obligations” of the Climate Act.  Such a hearing could address modifications to the Climate Act address affordability as well as changes necessary to incorporate nuclear power.

Such a hearing could also address reliability.  The PSC has acknowledged that a new category of resources is needed to support the proposed renewable-dependent electric energy system.  During periods of extended low wind and solar resource availability dispatchable, emission free resources (DEFR )are needed as backup to keep the lights on.   In my opinion, the most promising backup technology is nuclear generation because it is the only candidate resource that is technologically ready, can be expanded as needed and does not suffer from limitations of the Second Law of Thermodynamics. If the only viable DEFR solution is nuclear, then renewables cannot be implemented without it.  But nuclear can replace renewables, eliminating the need for a massive DEFR backup resource.  Therefore, it would be prudent to pause renewable development until DEFR feasibility is proven because nuclear generation may be the only viable path to zero emissions that can maintain current standards of reliability.

Conclusion

The PSC and DPS have not adequately addressed the necessity to consider the costs of the Climate Act on their “broad mandate to ensure access to safe, reliable utility service at just and reasonable rates.”  DPS has not even bothered to update its mandated report on Climate Act costs in over a year.  No proceeding has directly addressed the need for safety valve boundaries on costs or reliability. In rate case proceedings DPS says this issue is addressed elsewhere, but my search shows it is mentioned elsewhere but not directly addressed.  Even Governor Hochul has figured out that it is time to do this right.  Only time will tell whether the PSC acts.

The solar and wind mandates in the Climate Leadership & Community Protection Act (Climate Act) were no doubt heavily influenced by the idea that renewable energy is cheap.  This post describes three articles by Planning Engineer (Russ Schussler) that eviscerate that argument.

I am convinced that implementation of the Climate Act net-zero mandates will do more harm than good because the energy density of wind and solar energy is too low and the resource intermittency too variable to ever support a reliable electric system relying on those resources. I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 500 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.

Overview

The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050.  The Climate Action Council (CAC) was responsible for preparing the Scoping Plan that outlined how to “achieve the State’s bold clean energy and climate agenda.”  After a year-long review, the Scoping Plan was finalized at the end of 2022.  Since then, the State has been trying to implement the Scoping Plan recommendations through regulations, proceedings, and legislation. 

One rule is Public Service Law Section 66-P Establishment of a renewable energy program that requires the Public Service Commission to establish a program to meet the interim Climate Act targets for 70% of the energy delivered in 2030 “shall be generated by renewable energy systems” and that “by the year two thousand forty the statewide electrical demand system will be zero emissions”.  This mandate establishes a preference for solar and wind in the future New York grid.

Advocates think this will mean cheaper prices.  A quick search for cheap solar quickly an example of the cheap claim.  Pierina Fiestas recently updated an article at the WTS Energy website that claimed: “Solar energy has come a long way over the past few decades, and today it has become the cheapest source of electricity in history, according to the International Energy Agency (IEA).”

Russ Schussler is a retired electric system planner who wrote many articles at Climate Etc about the electric system under the pen name Planning Energy before he retired.  He recently posted a three-part series that addresses the myth of cheaper renewables: Why “cheaper” wind and solar raise costs. Part I: The fat tail problem;  Part II: The hidden costs of residential solar; and Part III: The problem with power markets

The Fat Tail Problem

I have argued elsewhere that green energy works well until you really need it and then it does not work.  Schussler notes that “just because a resource is cheaper most of the time that does not mean that it reduces overall system costs”. His post explains why renewable energy costs must be considered within the context of constant energy supply not just when the sun shines and the wind blows.

The fat tail problem refers to the shape of the total cost curve but don’t worry about that reference.  Schussler explains that the fat tail problem is simply the fact that rare but extreme events drive the costs of the electric system.  He notes:

Peak demand periods in power systems drive costs that overshadow renewables’ savings during easy times. Electricity demand fluctuates, and supplying power is far more challenging—and expensive—during certain periods.

His post includes both a generalized description and a more detailed discussion as backup.  He explains:

Typically, the most difficult times are peak demand periods in winter and summer, which account for less than 5% of the year.  During a single hour of peak demand, electricity costs can spike orders of magnitude higher than the typical average cost, forcing utilities to rely on expensive backup plants that sit idle most of the year.  For example, during the January 2014 Polar Vortex, a massive cold snap gripped the eastern U.S., driving electricity demand for heating across the PJM Interconnection to record levels. With no spare power to share among states, wholesale prices soared to $2,000 per megawatt-hour, over 60 times the typical $30/MWH average. Smaller localized events are more common with less drastic price fluctuations, but they contribute as well to the fat tail problem.

This is a particular issue with renewables that advocates ignore:

Wind and solar often shine during easy times, producing electricity at a lower marginal cost than traditional sources like natural gas or nuclear power. However, their output is intermittent and less reliable during peak periods, when weather conditions may not align with demand. Relying heavily on renewables requires backup systems—often expensive fossil fuel or nuclear plants—to ensure reliability during these critical fat tail events. The cost of maintaining these backup systems, combined with the infrastructure needed to integrate intermittent renewables, can greatly outweigh the savings from cheap renewable energy during easy times.

This problem is exacerbated because the peak load often occurs when wind resources are low and winter peaks occur when days are short.  The b0ttom line is that if you consider the total costs to provide power over every hour of the year, then the added costs for the extreme situations increase total costs so much that solar and wind are not the “cheapest”.

Hidden Costs of Residential Solar

In his second post, Schussler explains that residential solar has an issue like the fat tail.  He states that:

Residential solar follows a similar pattern: it seems affordable for homeowners, but raises system costs through rate structures that over-incentivize adoption. Generous subsidies, like retail-rate net metering, drive excessive solar growth, risking grid stability and shifting costs to non-solar customers that are often less affluent.

Schussler explains the problem of cost-shifting through rate structures well:

It’s hard to understand why many don’t see the unfairness in rate structures, as similar arrangements would seem absurd in other industries. Imagine hotels required to keep rooms ready for all customers (at standard rates) just in case they “might” want them. Worse, during low occupancy, hotels must send guests to customers’ Airbnb properties whenever there are excess rooms. Or consider pizza chains forced to buy excess pizzas from restaurants during slow hours while supplying low-cost pizzas during peak hours and covering all pickup and delivery costs. In all of these cases, the major problem is that large infrastructure investment is required that will sit idle most of the time and receive inadequate compensation from the beneficiaries.

He goes on to explain how the residential rate structure currently in use in New York is another incentive for the Climate Act transition.  He provides details on “net-metering” which in one way or another enables residential owners to serve their own needs and sell the excess that the don’t need back to the utility at a rate unfavorable to the utility and everyone who does not have solar panels.

Not surprisingly, the greater the incentive offered the more solar panels installed.  However, he also explains that there are significant costs to the system:

• Lost Revenue: Utilities need steady charges to cover fixed costs (grid lines, backup power). Solar homeowners avoid these during low-demand periods, reducing revenue.
• Overpaid Purchases: High credits for low-value power strain utility budgets.
• Fat Tail Costs: Peak periods drive high costs (peaking plants and transmission and distribution expansion). Non-solar customers face 1-2% rate hikes in high-solar areas, per National Renewable Energy Laboratory studies.

Schussler also recommends a path forward that would “reduce incentives and align adoption with grid economics”.

Problem with Power Markets

In the third post Schussler describes why power markets that can optimize resource allocation in many sectors, “struggle to deliver affordability and reliability in electricity systems dominated by intermittent renewables.”

Schussler succinctly describes how power markets and the problem with renewables:

Power markets use a merit-order dispatch system, where generators bid their costs, and the market sets prices based on the most expensive unit needed. During “easy” times—when demand is low or renewable output is high—wind and solar often dominate. Their near-zero marginal costs (no fuel expenses) allow them to bid low, displacing higher-cost fossil fuel plants and driving down market prices. This creates the appearance of cheap electricity and fuels the narrative that renewables are inherently cost-effective.

However, during peak or extreme conditions, wind and solar often underperform due to weather or diurnal constraints. For example, wind speeds may drop during heatwaves, or solar output may be negligible at night or during cloudy winters. When demand spikes or renewables falter, markets rely on dispatchable resources—combined cycle plants, combustion turbines, or even older coal units—to meet the shortfall. These resources have higher marginal costs and are often called upon during the most expensive hours, driving market prices skyward. During Winter Storm Uri in February 2021, ERCOT prices surged to $9,000/MWh as renewables underperformed and demand soared. As discussed in the first posting, doing well most of the time is not enough. The challenge in providing costly backup during peak shortages exposes the limitations of power markets.

He goes on to note that he generally supports market-based systems over central planning.  However, he also explains why there are issues with power markets.  He notes:

Electricity differs from most commodities, with highly inelastic demand and a need for instantaneous balance between supply and demand to maintain grid stability. Unlike markets for goods like wheat or electronics, where substitutes abound, electricity has few viable alternatives. Storage technologies, such as batteries, remain costly and limited, unable to support seasonal needs, leaving utilities reliant on traditional generation (e.g., natural gas, coal, nuclear) to fill gaps left by intermittent wind and solar. This complexity makes electricity a poor fit for market-driven systems.

This complexity requires ten additional markets besides the real-time pricing market needed to address electric complexity.  Unfortunately, power markets “tend to prioritize short-term efficiency over long-term reliability.”  Consequently, we have seen blackouts occur because of market failures. 

He points to the best evidence that solar and wind do not reduce costs:

If you look globally there is an unmistakable pattern: “regions with high renewable penetration often face higher electricity prices.  Germany, with its aggressive Energiewende, has some of the highest retail electricity rates in Europe, despite abundant wind and solar.  In contrast, regions, like France, with balanced mixes, including nuclear and natural gas, often maintain lower and more stable prices. Power markets’ short-term focus exacerbates cost increases by neglecting reliability during high-cost events.

Conclusion

I cannot provide a better closing than just quoting Schussler’s conclusions.

Modern civilization needs electricity most all of the time. Otherwise wind and solar would be a better deal.  But having energy 80% or 90% of the time is not enough. Although there are many programs and approaches employed to limit electric use during peak times, large amounts of electricity are not shiftable away from peak periods. Consumers need cooling when it is hot and heating when the temperature is frigid. Those needs ensure the fat tail can’t be significantly slimmed down.

Poor rate designs hide solar’s true costs, making it seem affordable while raising electricity rates for all. Retail-rate net metering drives excessive adoption of solar, shifting costs to non-solar customers. Less supportive rates, like avoided costs or California’s NEM 3.0, slow solar growth, aligning it with grid needs. This ensures fairness and avoids cost spirals. A sustainable energy supply requires pricing that reflects true costs, ensuring affordability for all.

For now, the takeaway is this: power markets amplify the cost challenges of renewables by prioritizing short-term gains over long-term reliability.  A sustainable energy system must prioritize reliability and affordability through regulated planning, market reforms, or other tailored approaches addressing power market limitations. Policymakers must prioritize reliability over short-term market gains for a resilient, affordable energy future.