Give Me A Break, Kathy! Don't Pretend Higher Electric Rates Aren't the Result of Green Mandates You Issued!

Guest Post by Roger Caiazza of Pragmatic Environmentalist of New York.

I have argued that Climate Leadership & Community Protection Act(Climate Act) affordability would become a political issue soon. My previous article concluded that there is no way to simultaneously achieve the Climate Act emission reduction goals and maintain affordability such that it will not be a campaign issue for Governor Hochul 2026 re-election campaign. This article follows that up with the ramifications of this news:

“The New York Power Authority (NYPA) backed down from a significant rate increase proposed for hydropower after facing bipartisan backlash, but it was an order from Gov. Kathy Hochul herself that ultimately doomed the plan.”

NYPA Rate Hike

According to the Governor’s press release:

Governor Kathy Hochul today announced that she is demanding the New York Power Authority suspend its proposed electric rate hike, protecting consumers from sky-high utility costs that are making New York State less affordable.

“Today, I’m calling for an end to the Power Authority’s unacceptable proposal to raise electric rates on its customers statewide,” Governor Hochul said. “Too many New Yorkers are already falling behind on their energy bills and I will do everything in my power to reign in these astronomical costs. While I recognize the Power Authority’s critical importance in providing invaluable, clean, baseload power from its large hydroelectric power plants Upstate, I expect NYPA to go back to the drawing board, shelve this existing proposal, and figure out a better way forward.”

Spectrum News provided background on the news:

The New York Power Authority backed down from a significant rate increase proposed for hydropower after facing bipartisan backlash, but it was an order from Gov. Kathy Hochul herself that ultimately doomed the plan.

The increase, which was in the midst of a lengthy implementation process, would have sent hydropower rates from $12.88/MWh to $33.05 over the next four years before settling back to a rate of $24.26 by 2029.

Republican lawmakers in Western New York pushed back on the proposal.

Sen. George Borrello told Spectrum News 1 he is thankful that NYPA called the rate hike off.

“As a business owner in New York state, this is one of he few things that is actually a positive when doing business in New York, the ability to get low cost power,” Borrello said.

Spectrum News noted that:

“At Governor Hochul’s request, NYPA will move to withdraw the 2025 proposed rate increase. We understand that New Yorkers are struggling right now, and we intend to make every effort to collaborate with our customers and stakeholders to find a way forward,” NYPA told Spectrum News 1 in a statement

NYPA had said the increases were necessary to keep pace with maintenance and operational costs.

I question the claim that the costs were primarily related to maintenance and operational costs. I am not alone. Spectrum News said that:

Borrello and others have blamed both instances on the state’s drive toward clean energy to meet its climate goals.

“It’s all directly related to the [Climate Leadership and Community Protection Act] then you add to it the reliability, the fact that we’ve shut down reliable forms of energy like Indian Point which supplies 20% of New York City’s power,” Borrello said.

Not surprisingly, Hochul has pushed back on that premise. When discussing the large proposed Con Ed hike, she said: “It is a factor, but to increase rates to this percentage is not supported by that.”

New NYPA Climate Act Responsibilities

In the magical world of political cost accounting, adding responsibilities to state agencies is free. In the last year Governor Hochul has placed significant mandates on NYPA related to the Climate Act. According to the NYPA Strategic Renewables Plan dated January 28, 2025:

The 2023-24 State Budget authorized the most significant expansion of NYPA’s authority under the Power Authority Act in a generation. This expanded authority builds on the day-to-day work of NYPA staff to supply the state with reliable electricity, expand New York’s transmission system, and provide clean, affordable power and innovative energy services to our customers.

The enactment included four new areas of responsibility for NYPA, one of which expanded our authority to develop, own, and operate renewable energy generation projects to help meet the state’s clean energy goals. The expanded authority directed NYPA– beginning in 2025 and biennially thereafter– to develop and publish a renewable energy generation strategic plan that identifies our renewable energy generating priorities for the next two years. In addition, NYPA is directed to update the plan annually and may update the plan more often than annually if needed.

Beyond directing NYPA to build renewables, the budget enactment contained several other mandates:

• NYPA will work with the New York State Public Service Commission (PSC) to establish the REACH program to provide renewable energy bill credits to low- or moderate-income New Yorkers in disadvantaged communities;

• NYPA will invest up to $25 million annually in workforce training in collaboration with the New York State Department of Labor (DOL);

• NYPA will cease fossil fuel generation at its small natural gas power plants by the end of 2030, so long as electric system reliability and environmental conditions allow.

In addition, NYPA will lead the Decarbonization Leadership Program, which calls for the development of energy and emissions profiles for state government’s largest carbon-emitting facilities and decarbonization action plans that will guide state agencies on facility improvements that will reduce carbon emissions.

If I was a betting man, I would wager that the costs of these efforts are a significant chunk of the revenues raised by increasing hydropower rates from $12.88/MWh to $33.05 over the next four years before settling back to a rate of $24.26 by 2029.

Time for a Cost Reckoning

It is time for the Hochul Administration to acknowledge the total costs of all the programs associated with Climate Act implementation. The Climate Act requires that 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.”

The draft Clean Energy Standard Biennial Review Report released on July 1, 2024 will fulfill this requirement. The final report was due at the end of 2024 but was delayed on December 17, 2024.

On December 18, 2024, the New York Assembly Committee on Energy held a public hearing where the status of the Biennial Report was discussed. At 28:01 of the video, Jessica Waldorf, Chief of Staff & Director of Policy Implementation, New York State Department of Public Service (DPS) explained the decision to delay:

The decision to pull the report yesterday was really based on the fact that we did a major review of the main program that would have otherwise been included in that report – the Clean Energy Standard that governs all the renewable energy programs. That report is currently under consideration by the Commission. Rather than do things piece meal we’re going to release the next version of the CLCPA annual report once the commission has acted on that CES biennial review. We will include one comprehensive review report that will look back two years and also respond to other stakeholder feedback that we’ve received in response to the issuance of the first report.

My interpretation of this statement is that there is no commitment when the costs report is coming out. If they could get away with delaying the report, they would wait until after the 2026 election. More troubling was her comment about NYSERDA spending increases:

It also can’t be attributed to just the Climate Act. Many of the initiatives go back several years all the way to 1996 when we started authorizing funds for things like energy efficiency investments and so a lot of programs and initiatives preceded the Climate Act.

My concern is that this suggests that the DPS is going to hide the total costs of all the programs needed to achieve Climate Act mandates when the biennial report cost estimates are released.

The emphasis on the Clean Energy Standard when describing the review suggests that they will try to list only the costs of that component of New York’s energy plan net-zero transition. If the costs of programs and initiatives like the Clean Energy Standard, that preceded the Climate Act are not included, then Hochul can claim lower costs but New Yorkers are still on the hook for all the costs.

I recently described this as mal-information because while the costs listed are based on reality it is misleading and harms New Yorkers because it improperly excludes necessary costs to achieve all the goals of the energy transition. New Yorkers deserve to know all the costs associated with Climate Act implementation.

Discussion

The costs of green energy policies has become an issue elsewhere as well. Gordon Tomb of the Commonwealth Foundation recently explained that

Last October, electric grid operator PJM Interconnection received a joint letter from five Democrat governors—Pennsylvania’s Josh Shapiro, Illinois’ JB Pritzker, New Jersey’s Phil Murphy, Maryland’s Wes Moore, and Delaware’s John Carney. According to them, PJM, which supplies electricity to 13 states and the District of Columbia, has gouged customers with its annual capacity auctions

Just like Hochul rather than take accountability for destructive policies that produced the higher costs these Democrat governors are playing the blame game. Tomb concludes:

It is time for policymakers to face the economic and physical realities of energy production. Their misguided efforts to reduce carbon emissions—from cap-and-trade schemes to government mandates favoring solar and wind—have proved costly to consumers and damaging to the reliability of power systems.

This perfectly exemplifies Progressive New York Democrats led by the Governor Hochul. Their Climate Act fantasies are going to cost enormous amounts of money and risks to reliability have been largely ignored by them.

So far, the Hochul Administration has not fulfilled the mandate to document the “annual funding commitments and expenditures” and I suspect that they when they finally provide numbers they will continue the mal-information coverup used to minimize Scoping Plan costs y excluding costs not associated with the Climate Act itself.

There is another missing piece in the cost assessments. The cost projections in the Scoping Plan are approaching several years old now. It is time that those numbers were updated. To do it right, clear documentation for all the energy use and emission reduction strategies proposed that includes assumptions, expected costs, and projected emission reductions is necessary.

Conclusion

Hochul was quoted as saying:

“Too many New Yorkers are already falling behind on their energy bills and I will do everything in my power to reign in these astronomical costs.”

It is inconceivable that her Administration does not understand that these new NYPA responsibilities will cost a lot of money.

That makes her actions hypocritical.

She was indignant that the companies and NYPA would hike rates when people are struggling but conveniently overlooks all the costs for renewables and other Climate Act mandates that are buried in the rate cases. It is time for transparency.

There should be a line on consumer bills that documents Climate Act costs.

#Caiazza #Climate #Hochul #NewYork #ClimateAct #NYPA #ElectricRates #Election

Roger Caiazza blogs on New York energy and environmental issues at Pragmatic Environmentalist of New York.  This post represents his opinion alone and not the opinion of his previous employers or any other company with which he has been associated. Roger has followed the Climate Leadership & Community Protection Act (Climate Act) since it was first proposed, submitted comments on the Climate Act implementation plan, and has written over 500 articles about New York’s net-zero transition.