Consumer Energy Alliance’s latest report has calculated a $25,600 price tag per New York City household if the city continues to follow short sighted goals of banning natural gas use in buildings. The cost to residents will be felt each winter and poses significant challenges to businesses recovering from the COVID pandemic in the short term.
The State of Affairs
New York City has put in successive policies that have cut residents off from affordable natural gas in favor of higher priced electricity. In 2019, Local Law 97 was signed into law, which will force a rapid shift away from natural gas to electricity in large commercial and residential buildings by 2050, and was disastrously complimented by Mayor de Blasio’s February announcement that natural gas connections will be banned from new buildings starting in 2030.
CEA’s report finds that the average New York City resident could pay more than $25,000 for these policies thanks to higher energy costs, replacement of natural gas appliances, remodeling, construction, wiring, and labor costs.
The Mayor’s office says it plans to ensure that the policy doesn’t negatively impact renters and low-income owners, but they have yet to explain how they will accomplish this. As first movers leave the gas distribution system, lower-income individuals who rely on cost efficient natural gas will have to pay an increasing share for an aging gas system. New York City’s sustainability office director, Mark Chambers, admits that the city faces significant challenges between the cold climate and old infrastructure:
“As we start to electrify, we start to get same if not larger winter peaks than we would see in the summertime. That reduces the ability for the kind of maintenance and operational upkeep that would typically happen in a lot of the grid-related systems. It changes the entire paradigm of what is possible, given systems that if you have a city like ours are extremely antiquated as they are.”
A Difference of Degree
New York State has the ninth highest electricity prices in the United States with more than a third of electricity being generated by natural gas power plants. The 2021 Federal Register of Average Unit Costs of Electricity projects that electricity will cost four times as much as natural gas this year. The price difference is acutely felt in winter, where all-electric homes will pay 111 percent more for space heating than natural gas customers.
Increased access to natural gas has saved New York families, seniors and businesses over $48 billion in the past decade. Introducing higher prices on businesses struggling to recover from the pandemic will only add insult to injury. According to a survey by the New York City Hospitality, the city’s restaurants are in dire straits:
“A survey by the New York City Hospitality Alliance found that 92 percent of the businesses that responded could not pay full rent in December. Equally troubling is that these numbers have increased since the height of the pandemic last summer. These small businesses are the lifeblood of vibrant neighborhoods across the city and rely heavily on natural gas to cook food and operate.”
By removing the low-cost option, the city is putting more demand on their electrical system and shifting natural gas use upstream at the cost of residents.
Conclusion
Natural gas has given New York City the firm power capacity to keep the lights on in the city that never sleeps and energy costs low for its residents. Banning it will directly harm consumers who rely on affordable energy for home heating and cooking, and damage a robust service economy that serves millions every day.
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