New York State’s fiscal year runs from April 1 to March 31, and thus there is a mandate that the budget for each year must be approved before April Fool’s Day. This year they blew right by that deadline. But today, 8+ weeks late, it appears that a new budget has been enacted for what they call “fiscal year” 2027, that is, April 1, 2026 to March 31, 2027.
Among several contentious issues that held up enactment of this year’s budget, probably the most contentious involved the provisions relating to energy and “climate.” Our climate law, the Climate Leadership and Community Protection Act of 2019 (CLCPA) had imposed absurd deadlines for eliminating fossil fuels from the energy system. Seven years in, Kathy Hochul, our lightweight Governor, had finally mustered just enough brain cells to recognize that disaster was approaching. But she faces big legislative majorities of her own Democratic Party committed to “climate action.” And of the members constituting those majorities, most are not moderates open to pragmatism, but rather progressive activists committed to total climate purity. How to get out of this trap?
Hochul adopted a strategy of seeking minimum possible modifications of of the CLCPA, affecting only the most immediate impending deadlines of the Act. The apparent goal is to provide a couple of years of breathing room, sufficient (they hope) to get Hochul safely re-elected later this year.
But then what? It looks like they have traded a very brief reprieve for what will very likely be an even worse subsequent disaster.
First, let’s review the problematical CLCPA provisions. The CLCPA had three near-term deadlines that had become obviously impossible. Those were: (1) a 2024 deadline for promulgating regulations, particularly for what they called a “cap and invest” program, to implement the Act; (2) a 2030 deadline to reduce statewide “greenhouse gas” emissions by 40% from 1990 levels; and (3) a 2030 deadline to get 70% of electricity from “renewables.”
So where was the State with respect to these CLCPA statutory mandates?
- The State had completely blown off the 2024 deadline for the “cap and invest” regs. As a result, environmental groups had sued, and a state court had ordered that the State issue the regulations as required, as painful as that may be. However, the judge had stayed his injunction in order to give the legislature time to act.
- As to the mandate of 40% reduction of GHG emissions from 1990 levels by 2030, the State “Climate Act Dashboard” admits that the reduction so far has been only 14% (data only through 2023, but not much has changed since). Most of that has been a consequence of switching power plants from burning coal to natural gas. There are no more coal power plants to switch. The prospect of major further reductions in GHG emissions between now and 2030 is nil.
- As to renewable electricity generation, the Climate Act Dashboard states that 32% of the goal of 70% or electricity from renewables has been achieved, and another 30% of the goal is supposedly “in the pipeline.” Most of the 32% already achieved consists of Niagara Falls, which existed way before the CLCPA came along in 2019. They don’t give details of what the “in the pipeline” projects are, or of whether they are anything more than pipe dreams. They clearly will get nowhere close to the supposedly mandatory “70% of electricity from renewables” goal by 2030.
So how does the new budget deal change these things? I can’t find exact enacted statutory text, but here is a good summary from a law firm, Greenberg Traurig. With respect to the three provisions identified:
- The 2024 deadline for promulgating “cap and trade” regulations gets moved from 2024 to 2028.
- The mandate for 40% reduction in GHG emissions in 2030 is eliminated. In its stead, we get non-binding target of a 60% reduction in GHG emissions by 2040.
- From what I can tell, the “70% of electricity from renewables” mandate remains in place.
Comments:
(1) The “cap and trade” regulations will be no more feasible in 2028 than they are today. The only difference will be that Hochul will not be up for re-election that year. They will have two options, which will be to blow off the deadline as they did the last time, or extend it again.
(2) The idea that GHG emissions will be reduced 60% by 2040 is even more absurd than the prior idea that emissions would be reduced 40% by 2030. Given that it is no longer a mandate, and has been moved from four years out to fourteen, nobody will even bother to pay attention to this one for at least a decade.
(3) The “70% of electricity from renewables by 2030” mandate will be missed by a mile. But there is no one to hold accountable. Utilities? They are not in the business of generating the power any more. The people who do generate the power are independent operators who run one or a few power plants or wind farms or whatever, but have no responsibility for the overall generation mix. The people who are supposedly responsible for the generation mix are an alphabet soup of brainless state agencies (NYSERDA, NYISO, CAC, etc.) with no skin in the game. The whole idea of holding such bureaucracies accountable is antithetical to their very nature.
But meanwhile, as time will continue its march, New York’s energy situation will continue to worsen:
- The provisions of the CLCPA and New York’s environmental laws that currently make it impossible to build new natural gas power plants, or repower old ones to new technology, will remain in place. The natural gas fleet will continue to age, and some plants will retire.
- The termination of federal subsidies plus restrictions on offshore wind mean that little wind or solar generation will be built either.
- New York City’s Local Law 97, mandating conversion to electric heat for most large buildings, remains in place. Where is the electricity going to come from? Nobody knows.
- And then there is RGGI, the Regional Greenhouse Gas Initiative. New York is a member, along with all the other states along the Atlantic Coast from Maine to Virginia (except Pennsylvania). There are limited allowances for GHG emissions from power plants, and the amount of those allowances is scheduled to decrease by approximately 10% per year every year through 2033. The very idea is to force many of the natural gas power plants to close, and to force the price of electricity from the remaining ones to skyrocket. As of now this remains in place. If you think this scheme is so ridiculous that no state could possibly be part of it, remember that Virginia just re-joined a couple of months ago.
Here is some related advice from the State of New York: if you should ever find yourself in a car hurtling toward a brick wall at 100 mph, your best strategy is to close your eyes and pretend it is not happening.
If it is any consolation, the Greenberg Traurig summary of the CLCPA amendments reports that another change in the statute is that the percent of “benefits” of the Act directed to “disadvantaged communities” is to go from 40% to 45%. So at least there’s that.
