The climate bill will further destroy the upstate economy

Our state legislators are obviously not students of their predecessors’ history. They haven’t learned from past mistakes when it comes to public policy’s impact on the economy.  

In the late-1970s and 1980s New York State forced power companies to buy energy at what became costs twice that of the standard market rate from the numerous cogeneration facilities which had become wildly popular due to federal grants and 1978’s Public Utility Regulatory Policies Act.

After seeing some utilities suffer because of that edict, New York rescinded the rule. But, existing contracts with the co-gen plants were grandfathered. So, the bleeding continued.

Facing potential bankruptcy, in 1997, the power company which was Niagara Mohawk at the time used billions in junk bonds to buy-out those government-mandated contracts.

Even putting aside the higher electrical costs from 1980 to 1996, the impact of New York’s folly was measurable. Over a 14 year period beginning in 1997, Niagara Mohawk had to put the cost of its efforts to save itself onto ratepayers. That state-induced salvation charge cost the average homeowner a total of $2,700 on her power bills over those 14 years.

Over that same time period, Confer Plastics paid $4 million towards the surcharge. That’s not a typo. $4 million was thrown away all because the state thought it knew better than the marketplace, issued a feel-good mandate, and left a ruined economy to fix itself. We were just one of thousands of manufacturers that suffered. It’s no wonder so many, especially those with power bills much larger than ours, left the state.

The state is on the path for that to happen again.

This time, it will be worse.

Last week, the legislature passed the Climate Leadership and Community Protection Act. The Senate’s press release said it will “address and mitigate the effects of climate change by drastically cutting greenhouse gases, diverting the state’s energy reliance to renewable sources, and creating green jobs to promote environmental justice across New York State.”

While everyone wants environmental justice – there isn’t a single person who wants polluted waters and skies – there’s such a thing as taking it too far and imposing an injustice on society. The Act does just that.

It demands an 84 percent reduction in statewide greenhouse gas emissions by 2050, including a 34 percent reduction by 2030 and, by doing so, it requires 100 percent clean power by 2040, 70 percent by 2030. That means no gas-fired electricity or nuclear energy despite both being cheap and reliable and the latter being exceptionally clean.

Previous attempts at green energy standards didn’t have teeth, they were goals without enforcement. This time it’s real. The Department of Environmental Conservation is empowered to enforce the emissions rules while the Public Service Commission is given carte blanche to impose the clean energy standards upon the utility companies.

The rules they have to live by won’t be economically feasible.

In the language of the bill, hydroelectric -- which is the best energy sources in terms of cost, efficiencies, and cleanliness -- is mentioned just once, in the definition of renewable energy. It never again appears in the document because the state’s focus is trained upon solar and wind which will require vast solar parks on upstate lands, massive wind farms in that region, and offshore turbines in the Great Lakes and Atlantic Ocean. Specific minimum targets are 9 gigawatts of off-shore wind by 2035 and 6 gigawatts of solar in the next 6 years.

To make that happen, the legislation demands that green energy developments be funded in part or whole by the utilities (who will pass the costs on to consumers) and the New York State Energy Research and Development Authority (who get their revenues from a tax on your power bills). The aforementioned energy projects will cost tens of billions of dollars to build, and most of it will be on the backs of ratepayers.    

Even after those investments occur and the projects are connected to the grid, homeowners and businesses will pay more for electricity than what they are accustomed to, even though they today pay among the highest rates in the nation. New York residential rates are already 43 percent higher than national average, while commercial rates are 50 percent higher than the national average.

Those numbers will grow when you consider that solar electricity costs more than twice that of nuclear and hydro; wind is 23 percent more than those two sources; and solar costs exceed those of gas-fired plants by 42 percent. Then, there are the reliability costs – how does a renewable grid keep homes and businesses energized when there’s no sun or wind?  

While New York’s leaders may be banking on a green future, there will be far less green in the banks of residents and entrepreneurs in the future. It’s frightening to think about the economic damage this will inflict.

For the first time, I am truly worried that my company will not make it to the fourth generation in New York. It’s already tough to do business in the Empire State. If our input costs spiral out of control under this act there’s no way we can be competitive against domestic and global threats.

You should be worried, too, about what the economic prospects are for your next generation – jobs and prosperity will be leaving the state, as will your sons, daughters, and grandchildren.

It’s almost as if the “Community Protection” part of the act’s name was added with sarcasm. Communities will be ruined.

From the 24 June 2019 Greater Niagara Newspapers and Batavia Daily News