A few years ago, a group of climate scientists infamously changed the numbers in their data set so that they could “hide the decline.” In what is now known as the Climategate scandal, the scientists/activists fudged the underlying data to bolster their claims that global temperatures were rising due to increased carbon-dioxide emissions.
These days, New York governor Andrew Cuomo and his appointees at the Public Service Commission are eager to hide the increase in electricity prices that will soon be showing up on ratepayers’ bills, thanks to the governor’s Clean Energy Standard, which provides subsidies for renewable energy and for three upstate nuclear plants. This year alone, the cost of the Clean Energy mandate will total about $500 million.
New York’s utilities don’t want to hide the increase; they want transparency. Last December, four big electricity providers — Con Edison, Orange & Rockland Utilities, National Grid, and Central Hudson Gas & Electric — asked the state’s Public Service Commission for permission to add one or two lines to ratepayers’ bills that would explain the surcharges being added to cover the cost of the Clean Energy Standard. But in February, the commission rejected the utilities’ request, saying that it was important to “maintain general consistency” and “limit customer confusion resulting from the addition of new lines on customers’ bills.” The agency said that it is “preferable to recover the costs” for the renewable- and nuclear-energy subsidies “through existing supply mechanisms and bill lines.”
Cuomo’s efforts to hide the increase were first reported by Ken Girardin, an ace analyst at the Empire Center in Albany. Girardin has calculated that the renewable and nuclear subsidies will cost ratepayers nearly $3.4 billion between 2017 and 2021. Girardin told me that Cuomo’s attempt at an extreme makeover of the state’s electric grid will result in “one of the largest tax hikes in state history.” Cuomo, who’s clearly positioning himself for a White House run in 2020, doesn’t want that tax hike to be spelled out on ratepayers’ bills. Better to hide it than be saddled with the label of tax-and-spend liberal in advance of a presidential campaign.
Who will benefit from the tax hike, er, the governor’s valiant attempt to fight climate change? Some of the cash will go to wind-energy giant NextEra Energy. In January, the New York State Energy Research and Development Authority (NYSERDA) announced a deal that will give NextEra, the biggest wind-energy producer in North America, about $140 million in subsidies over the next 20 years. That deal is based on a subsidy of $24.24 for each megawatt-hour of electricity the company produces from a wind project it is building in the state. When combined with the federal production-tax credit of $23 per megawatt-hour, NextEra will likely collect subsidies worth $47.24 per megawatt-hour. In 2016, according to the New York Independent System Operator, the average wholesale price of electricity in the state was $34.28 per megawatt-hour. Therefore, thanks to Cuomo’s Clean Energy Standard, NextEra will be bringing in wind subsidies that exceed the 2016 average wholesale price of power in New York by nearly $13 per megawatt-hour.
While NextEra will rake in plenty of ratepayer cash, the biggest winner from the Clean Energy Standard will likely be Chicago-based Exelon Corporation. Under a deal struck last year, the Cuomo administration agreed to help keep three money-losing upstate nuclear plants—FitzPatrick, Nine Mile Point, and Ginna—by giving them a zero-emission credit (ZEC) of $17.48 for each megawatt-hour of electricity they produce. Exelon owns Nine Mile Point and Ginna and recently purchased the FitzPatrick plant from Entergy. A group of New York power-generation companies and environmental groups opposes the ZECs and has filed a lawsuit in federal court aimed at halting the subsidies. The three nuclear plants are now producing about 25.8 terawatt hours per year. If the ZECs are upheld in court, Exelon could be collecting more than $450 million per year from ratepayers.
Whether you like wind energy or nuclear energy doesn’t matter. What should matter is transparency in government and honest accounting. By hiding the cost of the Clean Energy Standard from ratepayers, Cuomo doesn’t put much value on either one.
© 2017 City Journal