Hochul Blames Utilities for Costs of State Climate Policies

Governor Hochul may be in support of the Climate Leadership and Community Protection Act’s (CLCPA) goals, but she clearly doesn’t want anyone to link her to its costs —certainly not now, with a gubernatorial primary looming.

How else to explain her attack on utility companies asking the Public Service Commission (PSC) to allow rate increases to cover – among other business costs – the cost of buying clean energy and promoting energy efficient homes?

Just months ago. Hochul was eager to approve two expensive renewable energy projects – the Champlain Hudson Power Express and Clean Path New York, which will bring hydro and wind energy to New York City. It was made clear at the time that the costs of those projects would be socialized to all New Yorkers through utility rate hikes, including to upstaters who won’t get any of the energy.

Hochul also supports expensive electrification of buildings, including installation of heat pumps.

But now she objects to utility companies New York State Electric & Gas (NYSEG) and Rochester Gas and Electric (RG&E), both subsidiaries of AVANGRID, pursuing rate increases to fund their own programs that in large part support CLCPA goals.

The companies’ plans include supporting NYSERDA’s Empower program by providing free energy audits and efficiency upgrades for low-to-moderate income customers, support for electric vehicle technology, heat pump installation, more connections to emissions-free wind and solar energy, and investments in battery storage.

In addition, the companies need to replace aging infrastructure to prevent blackouts. This is a national problem. Across America the electricity grid is aging and at increasing risk of failure.

All this costs money, but Hochul has declared it “outrageous,” and “unacceptable”  to ask upstaters to pay for these efforts to support the state’s climate policies. It’s all too typical of a politician to blame the costs of their own policies on the parties responsible for their implementation.

And as the primary approaches, Hochul’s reaction to the most recent proposed rate hikes is a transparent attempt to distance herself from the consequences of the CLCPA agenda she supports. Her pitch is mainly aimed at upstate voters. But perhaps if upstaters – who already use mostly clean energy – weren’t being asked to help pay to clean up downstate’s dirty energy supply, this rate increase wouldn’t be such a burden on them.

Just how does Hochul expect utilities to pay for achieving the state’s clean energy and efficiency goals? It’s not clear that she understands how businesses actually work. Companies provide a service and customers pay for it. When government makes expensive policies that companies have to comply with, customers still pay for it.

The only alternative is to have the same people pay via taxes, but despite demands from CLCPA supporters, Hochul’s budget largely ignored the problem of paying for the state’s climate policies. That leaves them to be funded by ratepayers, as PSC commissioner John Howard recently warned.

Hochul also made a big deal of demanding that the PSC carefully scrutinize the companies’ request. But that’s what the Commission does by law — regardless of the Governor’s demands. Her grandstanding is neither here nor there as far as the PSC’s job is concerned, but it allows her to look tough on big business. Unfortunately it also raises the specter of political interference with the PSC.

And this from a Governor who pledged to make New York the country’s most business-friendly state.

Major changes like those set in motion by the CLCPA don’t come free. And to be fair, it was Hochul’s predecessor who signed the CLCPA into law. But it’s clear that she doesn’t want to take either the responsibility of rolling it back or the responsibility of finding ways to pay for it. Instead, she’s going for the low-risk, low-leadership, strategy of trying to give the public freebies, and blaming others when the real costs become known.

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