New York has some of the most ambitious climate goals in the country: electric school buses by 2035, zero emissions electricity by 2040, etc. Why New Yorkers, who already consume less energy per capita than any state (other than Rhode Island), should lead the charge in saving the planet is the question for the politicians who voted on these policies in 2019.

Now, there is an even more ambitious proposal – the HEAT Act, which consists of two basic ideas: first, New York will make you heat your home with electricity, and second, you might end up paying your neighbor’s electric bill.

There is no cheap electricity for electric heat

The logic is this: make homes switch to electric heat and rip out gas pipelines. In theory, you would save money by not having to pay for gas infrastructure, while electricity would provide all your energy needs.

However, there are multiple problems with this idea. The vast majority of New Yorkers use gas or similar fuels to heat their homes. To switch them all to electricity, the state will need a lot of electricity. It will also have to make sure the electricity is affordable, otherwise heating bills will skyrocket.

But electricity in New York is not cheap. On average, New York households pay 26 cents per kWh while the U.S. average is only 16 cents. Pennsylvanians pay 18. New Jerseyans pay 20.

At the same time, New York is trying to attract energy-intensive industries such as chip manufacturing and artificial intelligence, which will further increase demand for electricity. Experts estimate that the planned Micron semiconductor factory in upstate New York will consume as much electricity as New Hampshire.

If New York had a lot of cheap electricity and nowhere to use it, switching to electric heat might be a realistic option. But New York has expensive electricity and imports a large share of it from Pennsylvania, where it is largely generated from coal and natural gas – the fuel sources New York shuns. Given these circumstances, forcing households to stop using gas and switch to electricity does not make economic or environmental sense.

Fixation on electricity is expensive and irrational

There is no free lunch – or heat pump. Switching hundreds of thousands of homes to electric heat is going to cost money. Moreover, some houses will have to be insulated or have their heating systems upgraded. These costs will place a financial burden on households.

If Albany decided to throw money at the problem, one might question whether it is fair for taxpayers to pay for improvements to privately owned homes when many New Yorkers cannot afford to buy one. It is akin to the State of New York handing out free tires—but only to those who already own a car.

Furthermore, if New York wants to fund a program to insulate homes and make them more energy efficient, this does not require switching to electric heat. Replacing windows, adding insulation – all of that will reduce energy use regardless of how you heat your home.

Paying Your Neighbor’s Energy Bill

The HEAT Act also proposes subsidizing household energy use, which would be self-defeating. If the goal is to combat climate change, then subsidizing energy consumption is the last thing the state should be doing. If I did not have to pay for electricity, I’d be running a Bitcoin farm from my apartment.

The main idea behind the energy subsidy is that your energy bill would not be higher than 6 percent of the household income. The amount above 6 percent would be covered by someone else, most likely other households.

If New York’s energy policies produced so much cheap energy that families paid little for their utility bills, that would be wonderful. Unfortunately, this is not the direction we are going. Instead, New York is pursuing a policy where the Peter household will have to pay a portion of Paul’s electric bill.

As a cherry on top, this legislation also allows for imposing limits on subsidized energy usage. So instead of zero-carbon, affordable energy, and other promises, we might end up with Albany dictating how much energy New Yorkers should use.

The HEAT Act promises to save the planet and lower energy bills. Instead, we may end up dependent on ever more expensive electricity, Albany rationing energy, and paying your neighbors’ heating bills.