Here in New York, our very-light-weight Governor Kathy Hochul is running for re-election. To her slight credit, she has noticed that New York is a high cost state, not the least for cost of energy, and that New Yorkers are upset about that.
New Yorkers are right to be upset about the cost of energy. According to this chart from the federal EIA containing most recent data for July 2026, the average price of electricity to the ultimate consumer in New York for that month was 29.9¢/kWh, compared to a national average of 18.31¢/kWh; and New York’s cost had increased more than 14% from 26.22¢/kWh in July 2025, versus a 4.9% increase in the national average over last year’s 17.45¢/kWh. New Yorkers are also right to be upset because the premium they pay for electricity is mostly to entirely the consequence of intentional government policies that drive up the cost.
What’s crazy is that Governor Hochul has decided to make “energy affordability” a theme of her campaign. The reason that is crazy is that at the same time that Hochul claims she favors more “affordability,” she also brags about maintaining and expanding the very policies that have caused the excess costs. The person most responsible for New York’s high energy cost is Kathy Hochul. But hey, this “energy affordability” theme seems to have worked in somewhat comparable circumstances for Abigail Spanberger and Mikie Sherrill, running respectively in Virginia and New Jersey last year. If the Virginia and New Jersey voters fell for it, maybe the New York voters will too.
On September 15, Hochul launched her latest “energy affordability” initiative with a big press release and a press conference. This latest initiative seeks to mask a portion of New York’s higher costs by distributing checks and discounts to the populace. From Hochul’s press release:
“As Washington Republicans keep driving up the cost of energy, gas and groceries, I’ll never stop working to help New Yorkers keep more money in their pockets,” Governor Hochul said. “That’s why I expanded access to our Energy Affordability Program – a move that will save residents across the state up to $500 annually on their energy bills. Right now, 2.5 million eligible New Yorkers are leaving money on the table and I’m on a mission to help keep the lights on and costs down by launching an all-of-government push to get them enrolled in this money saving program.”
As is usual for New York politicians, the playbook only extends as far as trying to bribe the people with some portion of their own money. So this becomes an IQ test for New Yorkers: Can we calculate whether ratepayers come out ahead or behind under Hochul’s proposal?
Again from the EIA, the average New York household uses about 8000 kWh of electricity per year. There is a difference of 11.59¢/kWh between the average New York electricity rate and the average rate in the rest of the country. That means the average New York household pays more than $900 per year for electricity in excess of what it would pay if our rates were equal to the national average. Now our very generous Governor comes along offering a discount of “up to” $500, to 2.5 million households (out of about 8 million households). Let’s see, have we come out ahead or behind? (Which is larger, $900 for each of 8 million households, or “up to” $500 for each of 2.5 million households?)
And then there is the issue of how New York’s rates came to be so much higher than the rates in other states. It can’t be geography — as an example, bordering Pennsylvania’s average rate for July was 21.72¢/kWh, fully 27% lower than our average rate. If you look at the EIA’s chart of average electricity rates by state, there is a remarkable (although not perfect) correlation between Republican-led states on the one hand (low rates) and Democrat-led states on the other (high rates).
And then consider some of the major New York energy policies that drive up rates. First there is the Climate Leadership and Community Protection Act of 2019 (CLCPA). Provisions of this statute drive up consumer costs in multiple ways. First, the statute imposes a mandate that by 2030 70% of electricity must come from renewable sources. That provision makes it impossible to build new and more efficient natural gas power plants, or to re-power existing inefficient natural gas plants to use far less fuel to produce the same amount of electricity. Second, substantial amounts of new wind and solar generation have been built to try to comply with the 70% mandate, but since those only operate intermittently, all of the old natural gas plants must be retained, and we end up paying for two redundant generation systems instead of one. Third, the new wind and solar generators are also sited in remote locations, requiring substantial additional and expensive transmission, all of which gets paid for in electricity rates.
And then there’s the Regional Greenhouse Gas Initiative, or “RGGI.” RGGI is a compact among eleven Northeastern states to force greenhouse gas emitters (i.e., electric power plants) to purchase allowances for every ton of CO2 that they emit. The quantity of allowances shrinks every year, thus forcing the auction price to increase. The auction clearing price has gone from $2.53/ton in 2017 to $37.65/ton in the most recent auction this month. And the cost of the allowances ultimately gets added into the electricity rates. In short, this is a program whose main purpose is intentionally to drive up electricity rates.
The number of these “allowances” for FY 2026-27 is set at 25,356,513. At $37.65 each, that means that the State adds close to $1 billion per year to end-user electricity bills. Divide by the number of households, and it’s about $120/year each, which represents about 5% of the aggregate of consumer electric bills. And, unless the RGGI structure gets changed, this figure is almost certain to rise.
On August 5, two New York State agencies, the Department of Environmental Conservation and the Energy Research & Development Authority, finalized regulations relating to implementation of the RGGI compact in New York. In a press release of that date, the agencies claimed that New York had received $2 billion cumulatively from the auction receipts built into RGGI program to that time, but they said they were using the money to make “investments” that would return $12 billion, or six times as much:
The updated cap trajectory is designed to achieve affordable emissions reductions more quickly, while ensuring long-term availability of allowances under the program. Net savings are expected to reach nearly $12 billion (PDF) over the lifetime of the investments, providing a nearly 6-to-1 benefit based on investment of about $2 billion to date.
Note that the $2 billion of receipts and $12 billion of “benefits” are only as to receipts to date. Receipts going forward are projected to increase dramatically, to a cumulative total of $4.7 billion by FY 28/29.
So where do they come up with this $12 billion of supposed “benefits,” not now, but supposedly over the lifetime of the programs funded by the $2 billion spent so far. There is no real information available on that. In a document called the “New York’s Regional Greenhouse Gas Initiative Operating Plan Amendment for 2026,” the agencies have provided a long list of entities and programs that either have or will be getting large cash handouts from the program. (To access that document, go to my colleague Roger Caiazza’s blog here, and follow the link for “Operating Plan Amendment” in the first line of that post.) There are dozens of recipients and programs listed, many getting funding of tens to hundreds of millions of dollars cumulatively over multi-year periods. Here are some examples of larger items listed: “Green Jobs Green New York (Fund)” — $517 million; “Clean Transportation” — $450 million; “UPA Efficiency and RE” — $389 million; “Retrofit Challenges” — $464 million; “Clean Energy Communities” — $144 million. And these are just a few examples of some of the larger allocations. So what exact entities are getting these vast sums, and what exactly are they going to do with the money to provide the claimed benefits? There are no details offered beyond the brief descriptions quoted.
In other words, these have the total appearance of being enormous slush funds passed out to friendly but unnamed NGOs. The idea that there will be $12 billion of benefits to the ratepayers from the $2 billion disbursed so far is pure speculation with no backup of any kind. Are there any actual “green jobs” emerging from the $500+ million handed out to the “green jobs fund”? Go ahead and try to find any of them. What is the “clean transportation” that we are supposedly getting for $450 million? If anyone knows they are not saying.
Do New Yorkers have sufficient IQ to figure out that they are getting scammed with this “energy affordability” mantra from Governor Hochul. I guess we will find out in the upcoming election. But let’s face it — New York voters are very likely to fail this test.
