In May, New York Governor Kathy Hochul trumpeted new legislation to address energy affordability, claiming that “[d]angerous policies coming out of Washington have sent the costs of power skyrocketing and New Yorkers need relief.”
The legislation includes a “Protecting Our Wallets Energy Rebate” (POWER) program that will provide New Yorkers with one-time checks of up to $200 for families and $100 for individuals this fall. It also modifies how the state Public Service Commission regulates utilities. Its features include exempting ratepayers from some utility cost recovery, limiting rate increases to the pace of inflation, and benchmarking utilities’ CEO pay to a so-far unknown energy-affordability index. The legality of some of the new rules is debatable under traditional regulatory principles, which allow utilities to recover prudent expenditures. Moreover, the legislation trumpets how it prevents utilities from recovering certain costs from ratepayers already prohibited from recovery, such as lobbying expenses and advertising.
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It’s not “dangerous policies coming out of Washington” that have raised energy costs for New Yorkers but virtue-signaling state policies on climate change. And, despite the new regulations, utilities will still be required to achieve the state’s unrealistic and costly zero-emissions goals.
Start with former Governor Andrew Cuomo’s 2014 ban on fracking. While Pennsylvanians enjoy low-cost natural gas, New York’s ban—together with its refusal to allow new natural gas pipelines into the state—has forced residents, businesses, and power-plant operators to pay more for natural gas.
In 2021, Cuomo forced the shutdown of the Indian Point nuclear plant, even though that plant provided low-cost, zero-emissions, safe, and reliable electricity to New York City for decades. The natural-gas-fired generating plants that replaced Indian Point are more costly and have increased greenhouse gas emissions.
The state’s renewable portfolio mandate also requires electric distribution utilities to purchase renewable energy “credits” to meet mandatory percentages of electricity that must be generated from wind and solar power. The state’s 2019 Climate Leadership and Community Protection Act increased those percentages. Since then, electric ratepayers have shelled out more than $3 billion for the credits.
Then there’s the high-cost offshore-wind contracts. For example, the first phase of South Fork Wind is already operating and charging ratepayers $160 per megawatt-hour. When the next phase of the project comes online next year, the overall price will drop to $150 per MWh but will escalate 2 percent every year.
The much larger Empire Wind project is slated to start operating next year. Ratepayers will pay $155/MWh for that project’s electricity. By comparison, in 2025, the average wholesale price of electricity in the state was only about $75/MWh—and even that much primarily because of high natural gas costs for New York generators.
Additionally, since New York is a member of the Regional Greenhouse Gas Initiative (RGGI), which includes 11 East Coast states, power-sector carbon dioxide emissions are capped each year. The state auctions off carbon credits four times annually. Fossil-fuel generators must purchase those credits from the state or other credit holders. The costs of those credits—over $3 billion since 2020—eventually fall on ratepayers.
The state’s Climate Change Superfund Act is another legally dubious piece of legislation that seeks to collect $75 billion from large oil companies and refineries that produced crude oil and refined petroleum products between 2000 and 2024. New York consumers would pay even more for gasoline, diesel fuel, and heating oil. On September 1, however, a federal judge struck down the law. Hochul says that the state is considering its legal options.
Lastly, the state’s carbon cap-and-invest program would cap total carbon emissions and gradually lower the cap to meet its zero-emissions goals. Even Governor Hochul realized the program would raise energy costs and thus has delayed the program’s implementation until after her reelection bid.
California and Washington state already have such programs. Since 2020, California’s cap-and-trade program has cost over $44 billion. Washington State’s program, which began in 2023, has cost over $4.5 billion. The programs have raised the prices of natural gas and, especially, gasoline and diesel fuel. The money collected is then allocated by those states’ legislatures to favored constituents. In California, for example, almost half the money collected has been showered on the state’s infamous bullet train to nowhere; its total cost is now estimated at around $130 billion.
Rather than blaming Washington, D.C. for New York’s high energy costs, and passing legally dubious legislation, four simple steps can make energy more affordable and reliable for New Yorkers: end the fracking ban, withdraw from RGGI, eliminate the state’s renewable portfolio mandates, and focus on building lower-cost, more reliable natural gas and nuclear plants.
Environmentalists would oppose these actions. But if the governor truly wishes to make energy more affordable, those four actions would provide consumers with real and immediate relief. Just don’t get your hopes up.