Climate Act Is A Planned Mass Exodus Event for New Yorkers
Roger Caiazza (on the subject of)
Independent Researcher and Publisher,
Pragmatic Environmentalist of New York
…
[Editor’s Note: New Yorkers are already leaving the Empire State but a mass exodus is about to happen as the state’s useless Climate Act more than doubles their electric rates.]
I sent a link to my All Otsego commentary Zero Emissions Transition Realistic to my distribution list and received some feedback that prompted this article. The commentary noted that the Public Service Commission’s first annual informational report on the implementation of the Climate Leadership & Community Protection Act (Climate Act) included the first admission of ratepayer costs. It mentioned that more costs were coming but I did not estimate specific ratepayer impacts and the feedback suggested that information would be useful. . In the worst case, my analysis estimates that upcoming Climate Act related costs for every utility in the state will be greater than the total current monthly bill.
I have been following the Climate Act since it was first proposed, submitted comments on the Climate Act implementation plan, and have written over 300 articles about New York’s net-zero transition. I have devoted a lot of time to the Climate Act because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that the net-zero transition will do more harm than good. The opinions expressed in this post 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.
Climate Act Background
The Climate Act established a New York “Net Zero” target (85% reduction 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 is 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.
After a year-long review, the Scoping Plan recommendations were finalized at the end of 2022. In 2023 the Scoping Plan recommendations are supposed to be implemented through regulation and legislation. In 2024, and every two years thereafter, there will be a program review of the progress in meeting the overall targets for deployment of renewable energy systems and zero emission sources and annual funding commitments and expenditures.
According to the Public Service press release:
The Climate Act’s directives require the Commission to build upon its existing efforts to combat climate change through the deployment of clean energy resources and energy storage technologies, energy efficiency and building electrification measures, and electric vehicle charging infrastructure. In recognition of the scale of change and significant work that will be necessary to meet the Climate Act’s aggressive targets, the Commission directed DPS staff to assess the progress made in line with its directives under the Climate Act and to provide guidance, as appropriate, on how to timely meet the requirements of the Climate Act.
The Scoping Plan does not provide any ratepayer cost impacts but the New York State Department of Public Service First Annual Informational Reporton Overall Implementation of the Climate Leadership and Community Protection Act (Informational Report”) does provide estimates for 2022. I have published three articles about the Informational Report: first impressions, a comparison of the goals in the report and the New York Cap-and-Invest (NYCI) Program Reference Case with respect to affordability implications of the Informational Report and NYCI.
Ratepayer Impacts in Informational Report
Much of the information in this section was previously published here. I converted the tables in the Informational Report to a spreadsheet so that I could combine the data from multiple tables. Three tables are of particular interest: Table 4: 2022 Electric CLCPA Recoveries, Table 7: 2022 Typical Monthly Electric Bills with CLCPA related costs disaggregated, and Table 8: Authorized Funding to Date.
Table 4: 2022 Electric CLCPA Recoveries summarizes costs recovered in 2022 by utilities for electric programs. The costs recoveries include: CES (electric only), CEF (electric only), certain VDER (electric only), Electric Vehicle Make Ready Program (electric only), Clean Heat programs (electric only), Integrated Energy Data Resource (electric only), and Utility Energy Efficiency programs (electric and gas). The table states that $1,175,788,000 in Climate Act costs were recovered in 2022. In the context of total ratepayer costs note that transmission upgrades are not included in the 2022 estimates and that there also are gas costs that are relatively small.
Table 7: 2022 Typical Monthly Electric Bills with CLCPA related costs disaggregated is the first admission by the Hochul Administration of potential costs of the Climate Act to ratepayers. The basis for the typical electric delivery and supply bills for 2022 was provided for the following customer types:
- Residential customers (600 kWh per month),
- Non-residential customers (50 kW & 12,600 kWh per month),
- Non-residential customers (2,000 kW & 720,000 kWh per month), and
- Non-residential high load factor customers (2,000 kW & 1,296,000 kWh per month).
PSC Staff requested that utilities disaggregate the cost components reported in Table 2 (electric) to determine CLCPA related impacts on customers as shown in Table 7. Climate Act costs added between 9.8% and 3.7% to residential monthly electric bills in 2022.
The Climate Act costs in 2022 are just the start of eventual costs to consumers. Table 8: Authorized Funding to Date “gives a sense” of expenditures that will ultimately be recovered in rates. The Informational Report explains:
This annual report is a review of actual costs incurred by ratepayers to date in support of various programs and projects to implement the CLCPA and does not fully capture potential future expenditures, including estimated costs already authorized by the Commission but not yet recovered in rates. To complement this overview of cost recoveries incurred to date, we also present below a table of the various programs and the total amount of estimated costs associated with each authorized by the Commission to date. Table 8 gives a sense of expenditures that ratepayers could ultimately see recovered in rates. These values are conservative and reflect both past and prospective estimated costs.
It is important to note that the Commission authorized some of the estimated costs in Table 8 prior to CLCPA enactment and that the cost associated with these authorized programs will be recovered over several years to come, based on the implementation schedules for these projects or programs and will mitigate the cost impacts to ratepayers year over year. These estimated costs represent either total program budget, estimated total cost for the program over its duration, or costs incurred to date in support of the program. Additionally, these initiatives will result in a variety of other changes that will impact how much consumers pay for energy. A number of these would put downward pressure on costs, including benefits in the form of reduced energy usage and therefore reduced energy bills to consumers. The Department has also previously described market price effects that are a result of these investments. When load is reduced or more low-cost generation is added, it would be anticipated that energy prices would fall because the market would rely less on higher cost generators. In addition, investments in transmission infrastructure not only unbottle renewable energy but also yield production cost savings and reliability benefits.
In sum, the total estimated costs associated with these programs or projects should not be considered as entirely incremental costs to what ratepayers would otherwise pay. Subsequent annual reports may include additional information about costs recovered relative to the funding previously authorized by the Commission in these programs, including funds already expended in support of these programs.
The takeaway message from Table 8 is that the authorized funding to date of program costs that will eventually make their way to ratepayer bills totals $43.756 billion. Note that the spreadsheet version of this table details the footnote costs.
Future Ratepayer Impacts
The ratio of the authorized Climate Act funding to date ($43.8 billion) to the Climate Act costs that have been authorized and were in the 2022 residential bills ($1.2 billion) is 37.2. It is tempting to simply multiply the ratio by each of the monthly Climate Act disaggregated cost components reported by the utilities to determine CLCPA future related impacts on customers.
However, this will not give an exact utility-specific estimate because the money authorizations per utility for 2022 and the future will not necessarily be the same. For example, earlier this year I wrote about the PSC approving requests to develop 62 local transmission upgrades that would alleviate congestion on the transmission system to get power to NYC from wind and solar projects upstate. The transmission upgrade projects will cost $4.4 billion to support 3.5 GW of renewable energy. The estimated bill impacts were not the same for each utility because costs were a function of where the upgrades were located. At this time no one knows how the costs will be allocated amongst the utilities.
In addition, the costs will not be allocated all at once. There is no documentation that explains the annual 2022 allocations relative to the total costs of each program. In the worst case all the costs could be allocated in a single year.
In order to give a rough idea, I used a lower ratio. The following table gives a conservative estimate of future costs by using a ratio of 30. I multiplied the ratio of 30 by the 2022 utility-specific monthly Climate Act related costs to estimate the future Climate Act costs. The future total monthly bill equals the 2022 bill minus the 2022 Climate Act related costs plus the future authorized funding Climate Act cost estimated as 30 times the 2022 costs.
Summary of Ratepayer Costs
The informational Report notes that. Climate Act costs that have been authorized and were in the 2022 residential bills total $1.2 billion. The Report notes that in 2022 the costs already associated with the Climate Act increased the Upstate residential monthly electric bills 7.6% or $7.15 per month for NYSE&G customers; 7.7% or $7.54 for RG&E customers; and 9.8% or $9.38 for Niagara Mohawk customers.
The report does not attempt to project future ratepayer costs of the authorized Climate Act funding to date that total another $43.8 billion. Using the conservative ratio of 30 and assuming a similar distribution of costs per utility and that all costs will be in one year, I estimate that the monthly ratepayer costs associated with the Climate Act will total at least $214.50 for NYSE&G consumers, $226.50 for RG&E customers, and $281.40 for NMPC customers. The Climate Act related costs for every utility in the state will be greater than the total current monthly bill.
Discussion
In two recent articles I explained why the claims that the net-zero transition will result in cheaper electricity are rubbish. The claim that wind and solar are cheaper is only possible if you ignore all the additional costs necessary to get the energy to consumers when and where needed.
In another post I explained arguments that solar and wind are only cheaper than fossil fuels in at most a small fraction of situations and for the overwhelming majority of the world’s energy needs, solar and wind are either completely unable to replace fossil fuels or far more expensive. These ratepayer costs are for some of the many other services and support necessary to integrate wind and solar into a “zero-emissions” electric grid. I suspect that future additional costs will be at least an order of magnitude higher.
Unfortunately, these are not the only costs for New Yorkers. The Scoping Pan proposes to electrify everything possible. These costs do not include what it will take to electrify home heating, cooking, clothes drying and hot water heating. Nor does it include the costs for home electric vehicle chargers or the very likely need to upgrade the electric service to the residence when everything is electrified. In addition to electrification of the home there will be the costs for an electric vehicle.
These estimated costs are high, but there is no escaping the fact that ratepayers are on the hook for an additional $43.8 billion in Climate Act costs. I admit that the distribution of costs is unlikely to be as concentrated as I have assumed. The absence of an estimate in the PSC report suggests that even if the eventual ratepayer impact is lower, it is still significant.
Conclusion
New York GHG emissions are less than one half of one percent of global emissions and global emissions have been increasing on average by more than one half of one percent per year since 1990. These facts coupled with the extraordinary costs noted in the PSC Informational Report suggest that it is time to step back and wrest control of New York’s energy future from the innumerate ideologues who have foisted the Climate Act on New York.
These costs may not mean New York should not do something but it does mean that we have time to re-evaluate the Scoping Plan. We need determine how much the transition will cost, whether we can maintain current levels of reliability with an electric grid that relies on wind and solar, and determine all the environmental impacts of wind and solar resources at the scale necessary for the net-zero transition before it is too late to prevent an affordability crisis, blackouts, and more damage to the environment from this supposed “cure” than any climate change impacts.
Roger Caiazza blogs on New York energy and environmental issues at Pragmatic Environmentalist of New York. This represents his opinion and not the opinion of any of his previous employers or any other company with which he has been associated.
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