how-sc-works-install-150x150-3077582For a second consecutive year, the state Public Service Commission (PSC) has deeply slashed the amount of renewable energy that utility companies are forced to buy under Governor Andrew Cuomo’s Clean Energy Standard (CES). The move casts further doubt on the governor’s goal of having renewables supply 50 percent of the state’s electricity by 2030—while reinforcing the CES program’s status as primarily a bailout for money-losing upstate nuclear plants.

The commission quietly voted Friday to approve the CES “Phase 2 Implementation Plan,” which reduces from 1.1 percent to 0.15 percent the share of electricity that utilities and large-scale electricity users—together known as “load-serving entities”—must obtain from renewables during 2018. Last fall, the commission made a similar reduction to the 2017 requirements, cutting it from 0.6 percent to a minuscule 0.035 percent.

The cuts were necessary because the commission used overblown estimates of what renewable energy sources would be available during its rushed implementation of the standard—as noted in the Empire Center’s October 2016 “Green Overload” report. The standard, after all, was written explicitly to prohibit renewables, such as Canadian hydropower, that might compete with the solar panels and wind turbines envisioned for (but not yet installed in) upstate New York.

The PSC is once again assuming that renewable generation will jump enough in the future to meet Cuomo’s goal. However, the growth from the current level of nearly 24 percent to 50 percent must now be compressed into 12 years instead of 14. And while the hike from 0.035 percent to 0.15 percent may appear small, it indicates the PSC is counting on a more than four-fold increase in the amount of renewables eligible for CES subsidies in the year ahead.

The CES was originally a product of Governor Cuomo’s “50-by-30” efforts. However, the program was transformed midstream into a bailout for Exelon Corporation, the owner of three money-losing nuclear power plants. Under the standard, Exelon will receive $483 million during the first full year of subsidies which began April 1, 2017, and billions more over the next several years. The money comes from ratepayers paying a higher price for electricity, as load-serving entities must purchase CES credits, the proceeds of which are distributed to renewable generators—and to Exelon.

The repeated cuts to the renewable requirements mean that by the end of 2018, based on 2017 credit prices, the Clean Energy Standard will have cost ratepayers $851 million—of which $845 million, or 99.3 percent, will have been turned over to Exelon, leaving the program on pace to become one of, if not the biggest corporate subsidies in state history.

About the Author

Ken Girardin

Ken Girardin is the Empire Center’s Director of Strategic Initiatives.

Read more by Ken Girardin

You may also like

Cuomo Administration Ducks Important Questions on Nursing Homes

A new report from the state Health Department tries to deflect blame for thousands of coronavirus deaths in the state's nursing homes – but undermines its own case by withholding data and engaging in tendentious analysis. Read More

Nursing Home Vacancy Rate Soars, Hinting at a Higher Coronavirus Toll

The vacancy rate in New York's nursing homes has more than doubled since the start of the coronavirus pandemic, suggesting that the death toll among residents may be thousands higher than officially reported. Read More

Hospitalization rising in some areas

Coronavirus hospitalizations are surging in parts of upstate, including three regions that the Cuomo administration authorized to begin reopening today. Read More

Essential Plan surplus hits $3B

As Governor Cuomo pleads for financial help from Washington, one of his state's programs is sitting on $3 billion in unspent federal aid: the Essential Plan. Read More

More fiscal turmoil for Medicaid

In a sign of pandemic-related strain on state finances, the Cuomo administration is postponing a series of multi-billion-dollar Medicaid payments over the next three months. Read More

Upstate escapes the worst

With the coronavirus pandemic hitting some parts of New York much harder than others, Governor Cuomo has signaled that he will begin to relax shutdown restrictions in low-virus parts of the state. Here's a closer look at how infection and fatality rates vary from region to region. Read More

Another Medicaid payment delay

State Medicaid spending dropped to nearly zero in March as the Cuomo administration again delayed payments to balance the state's books. Comptroller Tom DiNapoli's cash report for March, posted on Wednesday, showed just $9.2 million in Medicaid disbursements. The state's share of Medicaid spending averages almost $2 billion per month. The comptroller's numbers reflect so-called Department of Health Medicaid, which covers the bulk of the program but excludes most spending on recipients with mental disabilities. Read More

Why New York?

#NYCoronavirus: It's increasingly apparent that New York is suffering more severely from the coronavirus pandemic than any other part of the U.S. and most of the rest of the world – raising stark questions for city and state leaders. What is it about New York, and especially New York City, that made it especially vulnerable to infection and death? And how can that be changed before the next virus breaks loose? Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130
E-Mail: info@empirecenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.