cuomo-building-trades-150x150-1214460Governor Andrew Cuomo has married his unrealistic renewable energy targets to his push to steer work to the building trades unions. The likely results: even higher costs—and even fewer projects.

Last week, the governor announced that companies seeking the next round of state funds to build or install new solar panels, windmills and other renewable energy projects will have to pay the state’s “prevailing wage.” The purpose, Cuomo wrote in a press release, is “to further cement New York State’s commitment to creating high quality in-state clean energy jobs.”

In fact, as noted in this Empire Center study:

The phrase [prevailing wage] is both antiquated and misleading—since the pay levels mandated by the law are neither truly prevailing nor limited to wages, in the normal sense of either word. The law defines “prevailing” as the amounts set forth in union contracts covering at least 30 percent of workers in specialized building trades titles in a locality. And the mandated “wage” includes high-priced union fringe benefits, which can equal or even exceed a worker’s hourly cash pay.

The Labor Department’s union-favoring method for calculating the “wage” adds at least 13 percent to 25 percent to public building costs in New York, depending on the region in which the project is located.

The imposition of the prevailing wage requirement ultimately means fewer public works projects at higher costs—all to benefit the state’s building trade unions and union-shop employers, which rely on the wage mandate to steer public funds into their severely underfunded pension plans.

Requiring prevailing wage on renewable projects will mean the state must force electricity customers to pay more to make up for the increase in construction costs, fund fewer renewable projects, or a combination of both.

Cuomo made a similar move in 2013 by forcing upstate casinos to pay prevailing wage on their construction projects. In that instance, the governor went a step further and tried to make the casinos sign project labor agreements (PLAs) with the state Building Trades Council, which would have essentially prohibited non-union contractors from bidding. The PLA requirement was ultimately rejected by lawmakers, but Cuomo’s Friday press release said he plans to “explore” going beyond prevailing wage and possibly requiring PLAs. Like prevailing wage, forcing contractors to use a PLA also drives up costs.

This isn’t the first time Cuomo has undercut his own goal of having half the state’s electricity come from renewables by 2030, also known as 50-by-30.

The Cuomo-controlled Public Service Commission in 2016 disqualified most hydroelectric projects from competing for the newest rounds of state subsidies. That’s left the state relying chiefly on solar panels and wind turbines to replace upward of a third of the electricity now generated from fossil fuels or nuclear energy. Both wind and solar are more intermittent than hydroelectric power, and wind projects have met stiff local resistance.

And Cuomo in January proposed letting the state Power Authority build new renewable projects. The prospect of a state entity cannonballing into the limited pool of available subsidies has likely spooked potential investors already leery of lengthy approval processes. The move came after the PSC had twice slashed the renewable energy credit (REC) purchases that utilities and large electricity customers must make to fund new renewables.

Making renewable energy companies pay prevailing wage will win Cuomo accolades from politically influential unions in the months leading up to the 2018 gubernatorial election. But it also ends any illusions that the governor was ever serious about reaching his ballyhooed 50-by-30 goal.

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

After 10 weeks, all but five of the Empire Center’s 63 requests for pandemic data remain unfulfilled

Over the 10 days that Hochul has been in office, there has been no further progress on the Empire Center's record requests. Read More

New York’s health benefits remain the second-costliest in the U.S.

New York's health benefit costs increased faster than the national average in 2020, leaving it with the second-least affordable coverage in the U.S. The state's average total cost f Read More

Another Hochul To-Do: Timely Financial Reporting

The state will spend a record $212 billion in the current 2022 Fiscal Year, under the budget its elected leaders adopted in April. Read More

Can Cuomo still be impeached?

Andrew Cuomo and Donald Trump have more in common than boyhood homes in Queens. Like Trump, Cuomo could still face impeachment and an impeachment trial despite a promise to resign as Governor later this month. Read More

The Gov’s pension

There are several (dozens? hundreds?) of unanswered questions as the fallout from Andrew Cuomo's resignation earlier today continues. Among those are questions related to his pension, some of which can be answered, sort of. Read More

The Health Department’s FOIL Responses Signal an Indefinite Wait for Pandemic Data

The quest for comprehensive data on New York's coronavirus pandemic hit a bureaucratic roadblock this week Read More

A Study of COVID-19 in Nursing Homes Raises Doubt About New York’s Minimum Staffing Law

A newly published study of COVID-19 in nursing homes links larger numbers of employees to higher rates of infection and death for residents – raising fresh doubts about New York's recently enacted "safe staffing" law. Read More

Health Research Inc. Turns Over its Payroll Records Despite Claiming To Be Exempt from FOIL

The full payroll records of more than 2,400 de facto state employees are available to the public for the first time after being released by Health Research Inc. 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

General Inquiries: Info@EmpireCenter.org

Press Inquiries: Press@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.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!