Category: Climate Act Costs & Benefits

The New York State Comptroller Office released an audit of the NYSERDA and PSC  implementation efforts for the Climate Leadership & Community Protection Act (Climate Act) titled Climate Act Goals – Planning, Procurements, and Progress Tracking.  The audit found that: “The costs of transitioning to renewable energy are not known, nor have they been reasonably estimated”.  This post describes a couple of articles that suggest that when the costs of the Climate Act transition are finally revealed they will be extraordinarily high.

I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 450 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 and Background

The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions and 15% offset of emissions) by 2050.  It includes an interim 2030 reduction target of a 40% reduction by 2030. Two targets address the electric sector: 70% of the electricity must come from renewable energy by 2030 and all electricity must be generated by “zero-emissions” resources by 2040. 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.” 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 develop the Draft Scoping Plan outline of strategies.  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. 

To date, however, the costs of the transition have not been revealed.  The Comptroller Report audit found that: “While PSC and NYSERDA have taken considerable steps to plan for the transition to renewable energy in accordance with the Climate Act and CES, their plans did not comprise all essential components, including assessing risks to meeting goals and projecting costs.”  It noted that the “PSC is using outdated data, and, at times, incorrect calculations, for planning purposes and has not started to address all current and emerging issues that could significantly increase electricity demand and lower projected generation”.  Regarding costs the audit notes that “The costs of transitioning to renewable energy are not known, nor have they been reasonably estimated” and goes on to point out that the sources of funding have not been identified.

Crippling Costs of Electrification and Net-Zero Energy Policies in the Pacific Northwest

Jonathan Lesser and Mitchell Rolling have released a new research report from Discovery Institute’s Reasonable Energy program that will “produce staggering costs to individuals and businesses without providing any meaningful environmental benefits”.  The Discovery Institute announcement of the report summarizes the report as follows.

• Authors Jonathan Lesser and Mitchell Rolling conclude that policies in Oregon and Washington State that require their state electrical utilities to eliminate fossil-fuel energy sources to produce 100% of electricity from zero-emissions sources by 2040 (Oregon) and 2045 (Washington) will double existing electricity demand.
  • Both states have adopted California’s Advanced Clean Car rules, which require 100% of all new cars and light trucks sold to be electric by 2035.
  • Both states intend to reach zero energy-related greenhouse gas emissions by 2050, including replacing all fossil-fuel space- and water-heating systems with electric heat pumps.
  • Both states envision replacing existing fossil fuel generation and meeting the projected increase in electricity demand with thousands of megawatts (MW) of wind turbines and solar photovoltaics.

The Climate Act mandates are similar to those in Oregon and Washington.

The inherent intermittency of wind and solar power, together with peak electric demands taking place in the early evening hours when there is no solar generation available (and often no wind), means the two states will require large amounts of storage capacity, in addition to the existing hydroelectric storage dams that have been built on the Columbia River and its tributaries.

New York electric system projections highlight the same problem with intermittency as described here.

Because no new hydroelectric dams will be built, the additional storage capacity required will need to come from large-scale battery storage facilities and perhaps a few new pumped hydroelectric storage facilities, whose siting remains controversial.

New York also has no ability to build more hydro so will have to rely on battery energy storage.

• Their research considered the costs by 2050 associated with three scenarios: 1) the renewables-only strategy; 2) a lower-cost renewable strategy (a more optimistic low-cost renewables scenario in which wind, solar, and storage capital costs decrease by 50% in real (inflation-adjusted) terms by 2050); and 3) an alternative scenario in which the electricity goal is achieved with new nuclear plants and additional natural gas generators. The assessed total costs (in inflation-adjusted dollars) are as follows:
  • Renewables Only: $549.9 Billion
  • Lower-cost Renewables: $418.5 Billion
  • Natural Gas and Nuclear: $85.9 Billion

The Climate Act precludes the pragmatic option to consider natural gas and nuclear so our costs will be closer to the high end.

• Their research indicates that the effects on electricity bills will be devastating.
  • A typical residential customer’s bill will increase by 450%, from about $110 per month today to over $700 per month in 2050 (assuming a modest inflation rate of just 2.0% annually).
  • Commercial customers will see their monthly bills increase from an average of about $600 per month today to approximately $3,800 per month in 2050.

The Hochul Administration has not provided any ratepayer impacts, but I expect the costs will be similar in New York.

• The negative economic impacts will not be limited to soaring electricity bills.
  • Prices for virtually all goods and services will dramatically increase.
  • Jobs will be lost as businesses relocate to other states with lower-cost energy.
  • Energy poverty rates will soar.

Negative economic impacts are a feature not a bug of net-zero transition efforts.

• The enormous costs to consumers and businesses will be accompanied by negligible environmental benefits.
  • The reduction in greenhouse gases (GHGs) from the policies would total about 1.8 billion metric tons between 2024 and 2050, which is a small fraction of estimated 35 billion metric tons world carbon emissions in just one year.
  • If both states eliminated all energy-related GHG emissions by 2040, the resulting decrease in world temperatures would be only 0.003 ⁰C. By comparison, the best outside thermometers have an accuracy of about +/- 0.5 ⁰C, about 170 times larger.

I estimate that New York reduction in GHG emissions is about the same (1.5 billion metric ton reduction) as the reduction projected from Oregon and Washington so the estimates of environmental benefits are similar.

The report concludes that the two states would be best served by abandoning these goals, focusing instead on providing reliable and far less costly electricity from new natural gas and nuclear plants.

I believe this conclusion would be appropriate for New York.

Catastrophic Costs of Green Energy

Alex Epstein described his testimony in front of the House Budget Committee on the topic “The Cost of the Biden-Harris Energy Crisis.”  You can watch his testimony and the Q&A at the link.

The transcript of his testimony states:

The basic idea of government-dictated green energy is that the government should force us to rapidly reduce our use of fossil fuel energy and replace it with so-called “green energy,” mostly solar and wind, such that we reach net zero greenhouse gas emissions by 2050 at the latest.

There are three basic truths you need to know about the costs of government-dictated green energy. And I think these are really under-appreciated even by critics.

One is they have been enormous so far.

Two is they would have been catastrophic had it not been for the resistance of their opponents. This is very important when you hear the Biden administration has record production. That’s in spite of them, not because of them.

And three, they will be apocalyptic if not stopped in the future.

He goes on to summarize the reason for the cost increases:

So let’s talk about the cost so far of government-dictated green energy. All the energy related problems we have experienced in recent years, which have been a lot: high gasoline prices, higher heating bills, higher electricity bills, and unreliable electricity, which is a huge problem we need to talk much more about, are the result of government-dictated green energy.

And its very simple. When you shackle the most cost effective and scalable source of energy, fossil fuels, and you subsidize unreliable solar and wind, that wouldn’t otherwise be competitive, energy necessarily becomes more expensive, less reliable and less secure. So again, it’s very simple.

This is exactly what will happen in New York because of the Climate Act net-zero transition.  He goes on to explain why inflation and increased energy costs are inextricably linked:

Prices are determined by supply and demand. If oil and gas companies could control energy prices in their favor, why didn’t they do this from 2015 to 2020 when they were losing money? The truth is that government-dictated green energy policies are fundamentally responsible for all the energy related costs we experience today compared to a decade ago.

And in fact, it’s worse than that. There’s an opportunity cost. Because were it not for these policies, energy would have gotten considerably cheaper and more reliable, especially with lower natural gas prices, which should have lowered electricity prices. Instead, they’ve gone up because we’ve added a bunch of wasteful energy and unreliable stuff. And it gets worse, since energy is the industry that powers every other industry. By making energy more expensive and less reliable, we make everything more expensive and less reliable, which means government-dictated green energy drives price inflation. Very important point.

His testimony notes that at least on the Federal level that the attempts to rapidly eliminate fossil fuel use have failed.  Consequently, the nation has been spared energy ruin and a third-world grid.  Of course, reality has not stopped the Climate Act.  His testimony is a grim warning of our future if this madness continues.

Conclusion

In the absence of a clear accounting of costs for the Climate Act we can only guess what will happen here.  I believe that the crippling and catastrophic adjectives used by these authors will surely describe our energy costs.

The Climate Leadership & Community Protection Act (Climate Act) was passed five years ago and the Scoping Plan that outlines how the to implement the required transition was completed 20 months ago.  However, the Hochul Administration still has not admitted how much it will cost the consumers of New York.  In my opinion, the reason this information is not available is because the costs are politically toxic.  This post describes the requirements to provide costs that have been ignored by Governor Hochul.

I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 450 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.  It includes an interim reduction target of a 40% GHG reduction by 2030, and two targets that address the electric sector: 70% of the electricity must come from renewable energy by 2030 and all electricity must be generated by “zero-emissions” resources by 2040. 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.” 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 develop the Draft Scoping Plan outline of strategies.  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.

Scoping Plan Costs

The Scoping Plan outline for achieving the “State’s bold clean energy and climate agenda” should have provided substantive cost information.  Although costs to ratepayers and citizens were requested frequently by several Climate Action Council members the Scoping Plan went to great lengths to obfuscate the expected costs for the net-zero transition.  The Scoping Plan supporting documentation does not provide a transparent description of the information needed to estimate consumer costs.  At a minimum it should have provided clear descriptions of all proposed control measures, the assumptions made for those control measures, the expected costs for each measure, and the expected emission reductions projected for them.  The Scoping Plan does not even summarize sectoral expected costs for the different projection scenarios.  The numbers that are provided are buried in an enormous spreadsheet with inadequate documentation so it is impossible to determine what was used.

Instead of providing substantiated numbers the Scoping Plan cost benefit projections provided nothing more than support for the oft-repeated sound bite: the costs of inaction are more than the costs of action.  I summarized the machinations used to support this statement in a blog post and argued that the statement was misleading and inaccurate in my Draft Scoping Plan verbal comments  and written benefit, and cost/benefit comments.  There never has been a response to my comments.

There are substantive problems with the claim that the costs of inaction are more than the costs of action.  It is misleading because the Scoping Plan did not include all the costs to meet the Climate Act mandates.  Instead, it only included costs directly related to the Climate Act itself and not already implemented programs such as the Clean Energy Standard including 6 GW of behind-the-meter solar, 3 GW of battery storage, and 9 GW of offshore wind.  As a result, the acknowledged costs are much less than the total costs of implementation.  Also note that this accounting trick was very poorly referenced to hide this chicanery.

The overarching thing to keep in mind is that the costs are real, but the benefits are based on value judgements with a wide range of possible values.  Worse, the calculation of the societal benefits expected from carbon dioxide emission reductions was incorrectly applied.  The societal benefit was incorrectly applied multiple times rather than just once.  Their approach is equivalent to claiming that a wight loss of five pounds five years ago should be counted as a loss of 25 pounds if it was kept off.

All this results in unrealistically low-cost estimates and value-laden high benefit estimates to “prove” the costs of inaction are more than the costs of action. 

New York Cap and Invest

The Climate Action Council’s Scoping Plan recommended a market-based economywide cap-and-invest program.  The New York State Department of Environmental Conservation (DEC) and NYSERDA are developing the  New York Cap-and-Invest (NYCI) Program.  In March they took comments on the pre-proposal outline of the regulations but have only had one stakeholder meeting since.  On August 15, 2024 a webinar presented “a draft proposed framework for guiding the allocation of these funds and identification of potential areas that could receive investments.” During the webinar they claimed that draft rules would be out later this year and that appropriations and spending of NYCI proceeds would begin in the next fiscal year beginning April 2025.  In the stakeholder engagement process at the beginning of the year DEC and NYSERDA claimed they would propose regulations by summer and the final rules would be in place by the end of the year.  Clearly this is not happening according to plan.

Implementing a program like this is a major undertaking and I believe that the DEC is unable to respond as quickly as they would like simply because of staffing issues.  On the other hand, this program is a carbon tax.  There is no way that it will not affect prices significantly so I doubt very much there is any desire to get the program details out quickly.  At the Energy Access and Equity Research webinar sponsored by the NYU Institute for Policy Integrity on May 13, 2024 Jonathan Binder stated that the New York Cap and Invest Program would generate proceeds of “between $6 and $12 billion per year” by 2030.  In my opinion, these costs are one reason that the Hochul Administration is not in a hurry to release the regulations and proceed with the implementation process.

Comptroller Report

On July 16, 2024 the New York State Comptroller Office released an audit of the New York State Energy Research and Development Authority (NYSERDA) and Public Service Commission (PSC) of their implementation efforts for the Climate Act titled Climate Act Goals – Planning, Procurements, and Progress Tracking.  The key finding summary states: “While PSC and NYSERDA have taken considerable steps to plan for the transition to renewable energy in accordance with the Climate Act and Clean Energy Standard, their plans did not comprise all essential components, including assessing risks to meeting goals and projecting costs.” 

The Audit Highlights section of the Comptroller Report listed cost-related key findings and key recommendations.  The summary of the key findings included a cost-related specific finding:

• The costs of transitioning to renewable energy are not known, nor have they been reasonably estimated. Moreover, funding sources to cover those costs have not been identified, leaving the ratepayers as the primary source of funding. The lack of alternative funding sources adds additional risk to whether the State can meet its goals timely. Data shows utility costs have already risen sharply over the last two decades and more New Yorkers are having difficulty paying their utility bills. 

There were three key recommendations related to costs:

•            Begin the required comprehensive review of the Climate Act, including assessment of progress toward the goals, distribution of systems by load and size, and annual funding commitments and expenditures.

•            Conduct a detailed analysis of cost estimates to transition to renewable energy sources and meet Climate Act goals. Periodically update and report the results of the analysis to the public.

•            Assess the extent to which ratepayers can reasonably assume the responsibility for covering Climate Act implementation costs. Identify potential alternative funding sources.

There has been no formal response directly to these findings.  Susan Arbetter’s Capital Tonight  show featured an interview with NYSERDA President and CEO Doreen Harris and Rory Christian, Chair and CEO of the PSC where the cost findings came up.  I wrote an article that focused on Arbetter’s attempts to get either one of them to open up about the costs.  Arbetter asked: “I just want make sure that while there are factors that have contributed to the delay in implementation of our energy goals, is there anything leading the Administration to delay this because of cost.” (Note that this is not an exact quote but it is pretty close – check out the video at 1:40/9:00).  Harris responded (2:00/9:00 of the video): “The proceeding that is before the PSC is intended to look at just that”.  Harris explained: “How much progress have we made, do we need to make, and specifically they look at all this in the context of consumer cost”. 

Biennial Report

The Climate Act requires the Public Service Commission (PSC) issue a biennial review for notice and comment that considers “(a) progress in meeting the overall targets for deployment of renewable energy systems and zero emission sources, including factors that will or are likely to frustrate progress toward the targets; (b) distribution of systems by size and load zone; and (c) annual funding commitments and expenditures.”  I believe this is the PSC proceeding referenced by Harris.  The draft Clean Energy Standard Biennial Review Report released on July 1, 2024 fulfills this requirement.

However, contrary to the Harris claim, I do not think that this report addresses the progress “in the context of consumer cost”. I searched the Biennial Report for “consumer” and only got three results: one for consumer price index and the other two in a paragraph describing the motivation for deregulating the power sector of New York.  That may not disprove the claim that the report looks at all of this in the context of consumer costs, but I have not found any sections addressing consumer costs. 

The timing is convenient for the election cycle.  My cynical take on this is that the draft did not include consumer costs because of the potential for political fallout.  By the time that costs are added to the document the current election cycle will be over.

Energy Plan

According to the New York State Energy Plan website:

The State Energy Plan is a comprehensive roadmap to build a clean, resilient, and affordable energy system for all New Yorkers. The Plan provides broad program and policy development direction to guide energy-related decision-making in the public and private sectors within New York State.

The current Plan was initially published in 2015, and updated in 2020, when it was amended to align with the objectives of the 2019 Climate Leadership and Community Protection Act (Climate Act). Since the last update, the Climate Action Council produced its Scoping Plan, examining many of the energy issues that contribute to climate change and offering recommendations that are currently being implemented by the State.

In recognition of the State’s historic clean energy transition, the State Energy Planning Board will now convene, chaired by the New York State Energy Research and Development Authority (NYSERDA), to begin the process of developing a new Plan. Stakeholder engagement is an integral component in the development of the State Energy Plan, and the public will have the opportunity to provide comments on the draft scope and the draft plan throughout the process.

The Energy Plan is a political construct.  The Board consists of ten Commissioners all appointed by the Governor, three appointed by the Governor, the President of the Senate, and Speaker of the Assembly, and a non-voting member from the New York Independent System Operator.  Given the make up of the Board I expect that all decisions will fit the Governor’s energy narrative.

With respect to the schedule § 6-106. Conduct of the state energy planning proceeding (1) states:

Every four years, the board shall adopt a state energy plan, which addresses each item identified in subdivision two of section 6-104 of this article provided, however, the board may adopt such a plan more frequently for good cause shown. The board shall prepare biennial reports, every second year following the issuance of the final state energy plan, including a discussion and evaluation of the ability of the state and private markets to implement the policies, programs, and other recommendations as found in the state energy plan, and recommendations for new or amended policies as needed to continue successful movement towards implementation and realization of such policies and programs.

The 2015 Energy Plan was the latest edition and the last biennial report came out in 2017.  In 2019 the Climate Act was promulgated and in April 2020 an amendment to the plan was adopted that incorporated the new targets.  I have never heard an explanation why the plan was not updated.  Clearly the Climate Act has a major impact on energy planning but it has been 20 months since the Scoping Plan was completed.

The energy plan required analyses have not been updated since 2015.  § 6-104, State Energy Plan (2) (b) says the state energy plan shall include:

(b) Identification and assessment of the costs, risks, benefits, uncertainties and market potential of energy supply source alternatives, including demand-reducing measures, renewable energy resources of4 electric generation, distributed generation technologies, cogeneration technologies, biofuels and other methods and technologies reasonably available for satisfying energy supply requirements which are not reasonably certain to be met by the energy supply sources identified in paragraph (a) of this subdivision, provided that such analysis shall include the factors identified in paragraph (d) of this subdivision;

Identification and assessment of the costs, risks, benefits, uncertainties and market potential of energy supply source alternatives is only possible if there is a feasibility study.  There hasn’t been a feasibility study for the Climate Act.  On September 9, 2024 the State Energy Planning Board met to kick off this version of the Energy Plan.  The following slide outlines the schedule.  Note that the comment period on the plan itself is not anticipated until summer 2025.

Given that there is an explicit requirement for a cost assessment my money is on this process sliding until after the 2026 elections.

Conclusion

Everyone wants to do right by the environment to the extent that they can afford to and not be unduly burdened by the effects of environmental policies.  There is no question that the Climate Act costs will test the commitment of most New Yorkers to doing something about climate change once the costs are revealed.

During the Draft Scoping Plan review by the Climate Action Council, members Gavin Donohue and Donna DeCarolis repeatedly asked for consumer price cost projections.  Co-chair Harris did not provide that information then and appears to be stonewalling now.

My cynical take on this is that Scoping Plan contents, the timing for the NYCI carbon tax, the response to the Comptroller’s audit report, the contents of the biennial report, and the timing for the energy plan all are being manipulated to prevent dissemination of expected consumer costs because of the potential for political fallout.  As it stands the bad news will not be let out until after the 2024 election cycle.  Given the enormity of the potential costs I recommend voting against any candidate who supports the Climate Act simply because we deserve to know the costs.

Yesterday, I published an article that summarizes comments I submitted to the New York Department of Environmental Conservation (DEC) in response to a request for feedback.  After I published the article, I received an answer to a question I asked EPA about the calculation methodology used by DEC and that inspired me to reiterate my contention that New York’s application of the societal benefits of greenhouse gas emission reductions results in misinformation.

I have followed the Climate Leadership & Community Protection Act (Climate Act)since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 400 articles about New York’s net-zero transitionThe opinions expressed in this article 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.

Overview

The Climate Act established a New York “Net Zero” target (85% reduction in GHG emissions 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 (CAC) was responsible for preparing the Scoping Plan that outlined how to “achieve the State’s bold clean energy and climate agenda.”  In brief, that plan is to electrify everything possible using zero-emissions electricity. 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 develop the Draft Scoping Plan outline of strategies.  After a year-long review, the Scoping Plan was finalized at the end of 2022.  Since then, there have been regulatory and legislative initiatives to implement the recommendations, but progress has been slow.

Yesterday’s post included extensive documentation for the New York Value of Carbon so I will not repeat it here.  For this article the key point is that the DEC Climate Change Guidance Documents webpage notes that it was established for use by State entities to “aid decision-making and for the State to demonstrate the global societal value of actions to reduce greenhouse gas emissions in line with the requirements of the Climate Leadership and Community Protection Act.” 

Methodology Comment

Yesterday’s article described my submitted comment on the Value of Carbon methodology.  In short, I am convinced that the State calculation methodology is incorrect.  I believe that the guidance methodology is wrong because it applies the social cost multiple times for each ton reduced. 

Last weekend I reviewed the EPA webpage description of the ““Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific Advances”.  That page includes links to the following information:

• Final Report on the Social Cost of Greenhouse Gases
• Estimation Code and Replication Files 
• Workbook for Applying SC-GHG Estimates v1.0.1 (xlsx) (241.8 KB, March 13, 2024)
• Public Comments on the “Report on the Social Cost of Greenhouse Gases” 
• EPA Responses to Public Comments on the “Report on the Social Cost of Greenhouse Gases”
• External Peer Review of the “Report on the Social Cost of Greenhouse Gases”

I reviewed the Final Report and thought that their description of the proper benefit calculation methodology supported my arguments.  That webpage also includes a “Contact Us” form for questions.  To confirm my interpretation I submitted the following to EPA.

I have a question about the first two sentences in the first paragraph in Section 4.2 of the Final Report.

The sentences say: “The Social Cost of Greenhouse Gases (SC-GHG) reflects the future stream of damages associated with an additional ton of emissions discounted back to the year of the emissions. Several steps are necessary when using the SC-GHG estimates in an analysis that includes GHG emissions changes in multiple future years in addition to other benefits and costs.”

I interpret that to mean that the SC-GHG benefit value is applied for an additional ton of emission reductions once.  If you are looking at changes over multiple years, the first-year reductions are not applied cumulatively in multiple future years.

Is that the correct interpretation?

I received the following response from Elizabeth Kopits, PhD, Economist, National Center for Environmental Economics, Office of Policy, U.S. EPA:

Thank you for reaching out to our office with your question regarding EPA’s SC-GHG estimates.

The sentences you refer to are just intending to say that if you are analyzing a policy that is expected to result in emission reductions (or increases) in multiple years, then there are several steps to estimating the present value of the full stream of climate benefits (or disbenefits) that are expected from the emissions changes.

If I’m understanding your question correctly then I think the answer is yes.

For example, suppose it has been estimated that a policy will reduce CO2 emissions by 100 tons in 2025, 105 tons in 2026, and 110 tons in 2027, and the analyst is interested in calculating the total climate benefits from these emission reductions and comparing it to the estimated costs and other benefits of the policy. First, one would calculate the climate benefits in each year.

That is, the climate benefits in 2025 from the emission reductions expected in 2025 = 100 tons multiplied by the SC-CO2 for 2025 ($/t). (Recall this SC-CO2 value reflects the present value of the future stream of avoided damages from a one-ton reduction in 2025, so there is nothing more to calculate in 2026 and later related to the emission reductions that occurred in 2025.) Similarly, the climate benefits in 2026 from the emission reductions expected in 2026 = 105 x SC-CO2 in 2026, and the climate benefits in 2027 from the emission reductions expected in 2027 = 110 x SC-CO2 in 2027. 

Finally, one can calculate the present value of the benefits resulting from the full stream of emission changes from the perspective of the base year of analysis (e.g., 2024) by discounting the 3 numbers back to 2024 and summing.

I hope this helps to clarify a bit.  The SC-GHG workbook available on our webpage (https://www.epa.gov/environmental-economics/scghg) contains detailed instructions and example tabs that may be more helpful than my simple example above.  If you continue to have questions, please feel free to reach out any time.

I believe that the key is the “SC-CO2 value reflects the present value of the future stream of avoided damages from a one-ton reduction in 2025, so there is nothing more to calculate in 2026 and later related to the emission reductions that occurred in 2025”.  If the intent is to determine “the present value of the full stream of climate benefits (or disbenefits) that are expected from the emissions changes, then lifetime calculations are inappropriate.  I want to know the value of the climate benefits for New York to reach an 85% reduction of GHG emissions by 2050.

Discussion

The New York Value of Carbon regulatory policy enables the State to “demonstrate the global societal value of actions to reduce greenhouse gas emissions”.   New York’s climate policy making is nearly all political theater.  To justify the costs of the Climate Act, the political slogan is “the costs of inaction are more than the costs of action”.  To make that claim NYSERDA twisted the interpretation of the analyses to minimize the overall costs, biased costs low and benefits high, and, I have no doubt, influenced the Value of Carbon methodology to maximize benefits.

Yesterday’s post also included related correspondence with DEC staff responding to my interpretation.  It stated that “We ultimately decided to stay with the recommendation of applying the Value of Carbon as described in the guidance as that is consistent with how it is applied in benefit-cost analyses at the state and federal level.”  Dr Kopits response letter flatly contradicts the claim relative to the Federal level.  To give the benefit of doubt to DEC staff I will concede that the interpretation of what is appropriate for this benefit-cost analysis may be different.  However, I think that New Yorkers deserve clarification and ultimately get the total costs for the Climate Act mandated reductions.

The DEC response went on to say that “When applying the Value of Carbon, we are not looking at the lifetime benefits rather, we are looking at it in the context of the time frame for a proposed policy in comparison to a baseline.”  Finally, it noted that “The integration analysis will apply the Value of Carbon in a similar manner as it compares the policies under consideration in comparison with a baseline of no-action.”  This is where the interpretation of the policies under consideration were twisted.  In brief, the Hochul narrative that the costs of inaction are more than the costs of action only applies to Climate Act policies and not the total costs to achieve the Climate Act mandates.  The baseline of “no-action” described in the Scoping Plan as “Business as usual plus implemented policies” includes the following programs:

• Growth in housing units, population, commercial square footage, and GDP
• Federal appliance standards
• Economic fuel switching
• New York State bioheat mandate
• Estimate of New Efficiency, New York Energy Efficiency achieved by funded programs: HCR+NYPA, DPS (IOUs), LIPA, NYSERDA CEF (assumes market transformation maintains level of efficiency and electrification post-2025)
• Funded building electrification (4% HP stock share by 2030)
• Corporate Average Fuel Economy (CAFE) standards
• Zero-emission vehicle mandate (8% LDV ZEV stock share by 2030)
• Clean Energy Standard (70×30), including technology carveouts: (6 GW of behind-the-meter solar by 2025, 3 GW of battery storage by 2030, 9 GW of offshore wind by 2035, 1.25 GW of Tier 4 renewables by 2030)

That means that the costs of all these programs that are required to meet the Climate Act mandate of an 85% reduction in emissions by 2050 are not included in the evaluation.  Due to the lack of transparent cost and benefit estimates I cannot determine if the NYSERDA Integration Analysis excluded the benefits associated with those programs.  However, it would be another way to achieve the goal of a sound bite justification of benefits and costs.

Conclusion

New York’s climate policy making is nearly all political theater.  The shenanigans that the Scoping Plan authors used to make sure they could claim benefits were greater than costs and hiding their methodology and results is a long, disappointing story.  The Value of Carbon methodology is dictated by the desire to prove a point rather than provide any rigor in establishing its definition and level.  Given the necessity to maximize benefits to “prove” the costs of inaction are more than the cost of action and the lack of accountability to meaningfully respond to all stakeholders, ignoring my comments is a simply expedient.

I believe the ultimate question is “What are the benefits of New York’s 85% emission reductions mandated by the Climate Act?”  To answer that the value of carbon or social cost of carbon benefits should use the EPA methodology.  I believe that benefit is what all New Yorkers want to know and the Hochul Administration is deliberately covering up those numbers because it runs contrary to their narrative.

Syracuse Post Standard reporter Tim Knauss recently wrote two articles that expose the disconnect between the executives in the electric industry and their customers.  The Climate Leadership & Community Protection Act (Climate Act) will cost enormous amounts of money at the same time it increases reliability risks.  The politicians supporting it and the leadership of the utility companies all have not admitted just how much it will cost ratepayers.  This post uses National Grid’s “Net-Zero Overhaul” as an example.

I have followed the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 400 articles about New York’s net-zero transition. The opinions expressed in this post 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.  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 (CAC) was responsible for preparing the Scoping Plan that outlined how to “achieve the State’s bold clean energy and climate agenda.”  In brief, that plan is to electrify everything possible using zero-emissions electricity. 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 develop the Draft Scoping Plan outline of strategies.  After a year-long review, the Scoping Plan was finalized at the end of 2022.  In 2023 the Scoping Plan recommendations were supposed to be implemented through regulation, PSC orders, and legislation.  That process is falling behind as the enormity of the challenge becomes clearer.

National Grid Net Zero Overhaul

I live in Upstate New York and National Grid is my electric utility.  National Grid is the electricity system operator for Great Britain.  In 2000 National Grid started purchasing utilities in the United States and now is “an electricity, natural gas, and clean energy delivery company serving more than 20 million people through our networks in New York and Massachusetts.”  They tout plans for National Grid for “a smarter, stronger, cleaner energy future — transforming our networks with more reliable and resilient energy solutions to meet state climate goals and reduce greenhouse gas emissions.”

Someday I may return to this topic and focus on the “more reliable and resilient solutions” claim.  For the time being I will content myself with just saying this is codswallop.  I don’t think it will ever be possible for New York to meet its state climate goals as presently outlined without a catastrophic blackout because the energy storage and dispatchable emissions free resources necessary to meet the worst-case low wind and solar resource drought are impractical. Utility executives know that this is an issue but play along with the plans for their own self-interest not the interests of their customers.

This article will address the proposed plan for the “cleaner energy future”.  In particular, Nation Grid recently announced plans for a  £60bn Net Zero overhaul of National Grid.  That total is for all the National Grid companies.   The US National Grid press release included the following quote:

Group CEO of National Grid John Pettigrew said: “Today’s announcement is a clear illustration that National Grid is committed to playing our part in achieving the ambitious decarbonization targets that New York and Massachusetts governments have set. The increased investment we’re announcing today follows positive engagement with our regulators in these states, reflecting a willingness to upgrade electricity networks to provide long term affordable energy to all, and reduce emissions across our gas networks.”

 Tim Knauss did an article about the New York portion of the investment plan.  He described the New York component of the plan:

The $16 billion plan represents a 60% increase over what National Grid has spent during the past five years. It includes a $4 billion project under way to improve 1,000 miles of transmission lines, which National Grid calls the “Upstate Upgrade.” Other projects have not yet been identified.

Knauss also quoted spokesperson Jared Paventi: ““Will there be an impact for the customer? Yes, but I believe that it’s going to be negligible based on the time period that we’ll be recovering those costs,” Paventi said.” While the quote suggests that this is his personal opinion, I have no doubts that is the story he was charged to say.       

Rate Case Proposal

The press release for the upcoming New York rate case gives the highlights:

• Critical investments to ensure the reliability and safe operation of the company’s energy delivery system that serves 2.3 million upstate New York residential and business customers.
• Enhanced system resiliency and reliability measures to manage and reduce the impact of frequent and severe weather and enable continued strong storm response.
• Integrated energy planning to consider interactions between gas, electric and customer energy systems to achieve long-term climate goals in a safe and affordable way.
• Infrastructure investments to support economic development, connect clean energy, and enhance security.
• Targeted programs and dedicated teams to better serve residential, commercial and industrial customers.
• Enhanced energy affordability programs and services, and programs to enable clean energy and energy efficiency benefits for disadvantaged communities.

Tim Knauss also wrote an article on this announcement.  He wrote:

In 2020 National Grid asked for a $142 million increase in annual electric and gas delivery revenues. This year, the utility is asking for $673 million.  If the Public Service Commission goes along, that would raise National Grid’s electric delivery revenues by 20% and its gas revenues by 28%. A typical household would pay $440 a year more for electricity and gas.

National Grid describes the reasons for the increase as a catchup from the last rate case when “the company and regulators put a top priority on holding down an increase” and “Inflation and supply-chain constraints have raised the cost of transformers, poles, cables and other equipment”  Knauss writes that they also admit that: “the power grid requires significant new investments to make way for more electric vehicles, electric-heat buildings, and other elements of New York’s planned transition away from fossil fuels.”  I doubt that the attribution of costs to these reasons will be readily available.

Discussion

The impetus for this article was spokesperson Jared Paventi’s claim that the costs for the investments will be “negligible”.  Knauss provides the data that suggests otherwise.  He points out that “In an order issued last year to approve $4.4 billion in new transmission lines planned by several utilities, the state Public Service Commission estimated the work could increase residential bills by about $3.50 a month, decreasing over time.”  The New York Net Zero Overhaul estimate is $16 billion.  That will cause residential bills to increase an additional $12.73 per month.  I don’t call that negligible and that is only a small portion of the total increases proposed in the rate case.

The other thing that caught my eye was the comment by Group CEO of National Grid John Pettigrew that the New Zero Overhaul announcement “follows positive engagement with our regulators in these states”.  Cynic that I am, this sounds like the executives got an audience with the Hochul Administration and promised to follow their script for Climate Act implementation right before the rate case was released.  Maybe it is just a coincidence, but it smells like a backroom deal to me that has corporate and political interests at its heart with the welfare of the ratepayers ignored.  Hochul recently nominated three environmental ideologues to the Public Service Commission. I have no doubts where their biases lie and believe that any costs for the great net-zero transition will be approved by those three.

Conclusion

I do not think that there is any question that electric utilities have determined that implementation of net-zero transition plans will be risky and costly for their customers. However, I believe they have also determined that implementation is in their financial best interest.  Similarly, the regulatory agencies certainly have technical experts who understand the risks but the political appointees in charge ignore their counsel because their handlers are catering to a specific constituency. This does not portend well for everybody else.

There is a glimmer of hope.  It is only a matter of time until the cost blowback begins on these rate cases.  On June 5, 2024 Hochul indefinitely paused implementation of the New York City congestion pricing plan.  The rate cases will cause the costs of energy to increase for more people and the Climate Act is a big part of the increase.  Hochul said, “it’s not the right time” for congestion pricing as “New Yorkers face a cost-of-living crisis”.  Hopefully this will be draft language for a walk back on the aspirational Climate Act implementation plan when the true costs become clear.

The lead to the Natural Resources Defense Council (NRDC) blog post Separating Fact from Fiction: Setting the Record Straight on New York’s Climate Law states “Don’t be fooled by the fossil-fueled campaigns to delay climate progress. The Climate Leadership and Community Protection Act is New York State’s chance for a cleaner, healthier future.”  It goes on to refute four claims allegedly pushed by fossil fuel industry.  I am only going to respond to one of the responses.

I have followed the Climate Leadership & Community Protection Act (CLCPA) since it was first proposed, submitted comments on the CLCPA implementation plan, and have written over 400 articles about New York’s net-zero transition. I am convinced that the CLCPA will adversely affect affordability, reliability, and that the environmental impacts of the proposed transition are greater than the possible impacts of climate change.  The opinions expressed in this post 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 CLCPA established a New York “Net Zero” target (85% reduction in GHG emissions 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 CLCPAion Council (CAC) was 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 using zero-emissions electricity. 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 develop the Draft Scoping Plan outline of strategies.  After a year-long review, the Scoping Plan was finalized at the end of 2022.  In 2023 the Scoping Plan recommendations were supposed to be implemented through regulation, PSC orders, and legislation. 

The NRDC blog post describes the Scoping Plan framework as “pathways for a planned and orderly transition to a clean, resilient energy future.”  The Scoping Plan is just a list of potential control strategies that when combined are supposed to meet the CLCPA mandates.  A feasibility analysis has never been completed to show that the list of strategies is practical.  Furthermore, transparent accounting for the costs of the transition have not been provided and the Cumulative Environmental Impact Assessment has not been updated to account for the Scoping Plan estimates of the wind, solar, and energy storage resources needed.

NRDC Setting the Record Straight

The blog post Separating Fact from Fiction: Setting the Record Straight on New York’s Climate Law includes responses to four claims:

1. The CLCPA will result in higher energy costs for ratepayers because it is costly to implement.
2. The CLCPA will reduce the reliability of energy delivered to homes and businesses.
3. Your gas stove is going to be taken away from you.
4. There will be an adverse impact on the state’s overall economic climate that will discourage new investments and job growth.

I am only going to address the response to the second claim that the CLCPA will “reduce reliability of energy delivered to homes and businesses”.  The response to that claim states:

The framework outlined by the CLCPA-mandated Scoping Plan provides pathways for a planned and orderly transition to a clean, resilient energy future. The idea of a regenerative rather than an extractive economy strikes fear in the fossil fuel industry, which has been making record profits from recent price fluctuations and market volatility; in reality, reliability failures are often due to fossil-fueled superstorms and the historical lack of investment in our nation’s aging infrastructure. By contrast, homegrown renewable energy can and will be more resilient, more plentiful, and more cost-effective than finite oil and gas resources.

I will address each of these statements.  The first sentence states “The framework outlined by the CLCPA-mandated Scoping Plan provides pathways for a planned and orderly transition to a clean, resilient energy future.”  As noted previously there has never been a feasibility analysis to determine if the components of the Scoping Plan are practical.  The Climate Action Council never resolved the discrepancy between the Council faction that believed that no new technology is needed for the transition and the experts responsible for the system that argued otherwise.  A recent technical conference showed that the work of  Prof. C. Lindsay Anderson, Chair of Department of Biological and Environmental Engineering Cornell; Zach Smith, VP System Resource Planning, New York Independent System Operator; and Kevin Steinberger, Director, Energy and Environmental Economics all found that a new resource that can be dispatched when needed, is firmly available, and has no emissions is needed.  Technologies to meet this requirement are not commercially available at this time.  Moreover, no jurisdiction anywhere has been able to convert their electric system to one that relies on wind, solar, and energy storage.  Given the myriad technical issues that must be overcome to provide electricity when it is needed most, I think the most prudent course of action would be a demonstration project because the transition to the energy system mandated by the CLCPA would be unprecedented.

The second sentence unnecessarily questions the motivations of those who worry about reliability “The idea of a regenerative rather than an extractive economy strikes fear in the fossil fuel industry, which has been making record profits from recent price fluctuations and market volatility; in reality, reliability failures are often due to fossil-fueled superstorms and the historical lack of investment in our nation’s aging infrastructure.”  The concern about profiting from price fluctuations and market volatility is naïve.  When the electricity market is dominated by weather dependent generating resources the variability of wind and solar output will increase price fluctuations.  The New York Independent System Operator will have to modify the electric market to address this volatility as they learn how this new aspect of the system affects prices.  I have been involved with the weather-related impacts on the electric system for over 40 years and it has always been true that extreme weather has the greatest impact on system outages.  A common theme throughout this blog post is that all weather events are necessarily related to climate change without acknowledging that extreme weather events exactly like those before the climate change would still have major impacts.  Any increase in severity due to climate change is just a tweak and not the primary driver.

The final sentence got my attention: “By contrast, homegrown renewable energy can and will be more resilient, more plentiful, and more cost-effective than finite oil and gas resources.”  I wondered how the author managed to claim that extreme weather will have more of an effect on today’s generators in weather proof buildings than the exposed wind turbines and solar panels.  The more resilient reference was to the Babcock Ranch a Florida “solar town” that fared well during recent hurricanes.  The article claims the town came out of Hurricane Ian “almost unscathed and notes that one resident says they survived ‘by design.’  Florida Power and Light is proud of the Babcock Ranch solar system:

Babcock Ranch’s clean energy efforts were taken to the next level when FPL created the largest solar-plus-storage system operating in the U.S. today. Each of the ten large gray steel battery storage units at the FPL Babcock Ranch Solar Energy Center can store 1 megawatt of power and discharge for 4 hours. The adjacent 440 acres with 330,000 solar panels can generate up to 74.5 megawatts of power. Currently the solar installation generates more power than the town needs, so the surplus goes into the electric power grid. The new battery storage system ensures a steady output of power even on partly cloudy days.

There are two resiliency features that matter: Babcock Ranch was built 30 feet above sea level and all power lines are buried underground to keep them safe from strong winds.  New York’s net zero transition does not include buried power lines.  The Babcock Ranch website refutes the claim that “homegrown renewable energy can and will be more resilient”:

Electric power always flows from the nearest generation, so during the day the town will use energy from the FPL Babcock Ranch Solar Energy Center. When the sun goes down and the solar plant is not generating energy, Babcock Ranch will pull electricity off the grid from the closest FPL natural-gas power plant.

Babcock Ranch is not clean energy self-sufficient as the Climate Act envisions the entire state will be. The NRDC response also claims that renewable energy is more plentiful and more cost-effective than finite oil and gas resources.  It may be true that solar and wind energy is free but harvesting those resources, storing them for when they will be needed during an extended period of light winds in the winter when solar resources are low is an extraordinary challenge that requires the new resource described above.  Like all the Green Energy solutions advocated by the NRDC, wind and solar may work well most of the time but when you really need them, they don’t work at all.  The concern about finite oil and gas resources ignores the value of their storable concentrated energy and whether running out is a concern in the foreseeable future.

Conclusion

I believe I have shown that the NRDC fact-check claims that the CLCPA energy transition does not threaten reliability are invalid.  Ignoring the mounting evidence that this may be an insurmountable challenge is not in the best interest of New Yorkers.  At a minimum, CLCPA implementation should be delayed until we are sure that we can afford the CLCPA mandates, prove that the transition will not adversely affect reliability, and understand all the cumulative environmental impacts.

As is typical, whenever someone is screaming about misinformation it usually means that they are guilty of that charge.  In addition, trying to respond to this tripe takes an order of magnitude more work to respond.  Finally, whenever I make the effort to check the numbers I find the alarmists have their thumbs on the scale and are peddling a narrative to support their livelihoods.  I only wish that they could be held accountable when reality slaps their aspirational net-zero transition dreams back to earth.