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Here Are the Costs and Benefits of New York’s Energy Road Map

The plan would help make steep cuts in harmful emissions and protect public health, but it could come with significant costs to homeowners, businesses and the power grid. New York aims to cut emissions by 40 percent by 2030.

(TNS) — New York's new energy roadmap calls for drastically altering energy use in New York State homes and businesses in the years ahead.

It also illustrates the stark choices between the environmental benefits of reducing the use of climate-changing fossil fuels and the potential costs of making those changes.

But everything isn't finalized just yet. And there are concerns that New York won't be able to build up its electricity-generating capacity fast enough to meet all the new demand that the roadmap will create.

Broadly speaking, the plan contains recommendations for shifting the state away from fossil fuels toward electrification, in everything from appliances to commercial buildings.

While the plan lays out the projected benefits — making steep cuts in harmful emissions and protecting public health — there are potentially significant costs that come with achieving those ambitious goals, for homeowners, businesses and the state's power grid.

The state Department of Environmental Conservation was tasked with writing the rules stemming from the plan's recommendations. Gov. Kathy Hochul and the State Legislature next year are expected to play a role in implementing some elements of the plan, opening the door to lobbying by both proponents and critics that could yield changes in the months ahead.

Supporters are pushing to make the recommendations a reality, arguing that the state can't afford to wait any longer to combat climate change and start moving away from fossil fuels. The state is aiming to cut greenhouse gas emissions from 1990 levels by 40 percent by 2030, and 85 percent by 2050.

Critics are questioning some elements of the plan, such as the cost of retrofitting homes and businesses to move away from fuels such as natural gas, and whether the state's power grid will have the capacity to handle the ramped-up demand for electricity.

The Cost to Homeowners

For homeowners, elements of the plan are expected to start taking effect around 2025.

Starting then, newly built homes' appliances would have to run on a zero-emission system like a heat pump, instead of natural gas. In existing homes, that same standard would start to apply in 2030, once appliances reach the end of their lifespan.

Critics say the plan doesn't give homeowners a clear picture of the conversion costs coming their way.

In a study prepared for the New York State Association of Realtors, Rosen Consulting Group said the overall costs to retrofit a typical, existing natural gas-powered single-family home in the state range from $17,400 to $31,700, including an air source heat pump, water heater, cooktop range, clothes dryer and electrical modifications. Those costs wouldn't hit all at once. They would be incurred as individual appliances are replaced over time, at the end of their lifespan.

"Financial incentives, such as rebates and tax credits, are likely to be key factors in terms of facilitating and expediting adoption of electrical heat pumps and other appliances," the study said.

Allison Considine, senior representative for the Sierra Club's Beyond Coal campaign in New York, said the changeover is intended to be gradual.

"All of this is about targeted, phased-in investment," she said. "Nothing in this plan is requiring a homeowner to change out their perfectly good boiler today and make that conversion, which would be expensive." The plan calls for incentives that would be aimed at low- and moderate-income communities, she said.

Considine said it was premature to say with certainty the cost of converting systems starting about seven years from now.

"I think we're going to see a continued decrease in the cost of these systems," she said.

Another issue is homeowners' energy bills after conversion. Census data show that nearly 90 percent of homes in the Buffalo Niagara region are heated with natural gas, which is regarded as the least-expensive heating fuel.

The Rosen Group study said that the annual energy bill could rise between nearly $450 and nearly $700, in homes that implement "relatively standard electrification upgrades with minimal additional efficiency upgrades."

On the other hand, the study said, it was "quite likely" that switching to electrification could generate "significant savings" for homes that rely on other, more expensive fuels, such as propane or heating oil.

James E. Hanley, a fellow with the Empire Center for Public Policy think tank, casts doubt on the Climate Action Council plan's forecast that from 2030 onward, a quarter of a million homes annually in the state will switch to heat pumps.

"What is instead likely to happen is that before 2030, homeowners will rush to replace aging gas and propane furnaces, planning to hang onto them as long as possible," he wrote in a report Tuesday.

Will There Be Enough Electricity?

The energy targets in the Climate Action Council's plan will require a lot more electricity in the coming years, to power homes, buildings and vehicles.

The New York Independent System Operator, which manages the state's power grid, said in a recent report that by 2030, about 20 gigawatts of additional renewable power generation — a 54 percent increase from the state's current generating capacity — must be in service to support the state's energy policy target of 70 percent renewable generation.

And by 2040, between 111 gigawatts and 124 gigawatts of total generating capacity will be needed to support the climate law's mandate of an emissions-free grid, roughly three times the current capacity of 37 gigawatts, according to the New York ISO.

"For us as a utility, it's going to be important to build an energy system that can meet those evolving needs of the energy transition," said Huck Montgomery, senior manager of regulatory delivery for National Grid. "It's a focus of our whole company."

Gavin Donohue, president and CEO of the Independent Power Producers of New York, questioned how much it would cost to upgrade the state's power grid, who would pay for it, and how the grid's reliability would be assured.

"Just saying we care about reliability but in essence doing nothing about it is troubling," said Donohue, who was one of three council members to vote no. "If you're going to build out this grid to the level we're talking about building it out, you're going to need a significant amount more of resources that are zero emitting."

The Sierra Club's Considine said she agrees much more electricity will be needed on the grid, but believes the goals are realistic, and said the plan was designed with reliability in mind.

"Right now, we are on track both with the amount of renewable energy we have contracted and with the recommendations in the plan to increase our buildout of renewable energy and strengthen the grid to have a reliable grid," she said.

How Will State Government Do It?

Conor Bambrick, director of climate policy for Environmental Advocates NY, said many elements of the plan will be implemented by state agencies using their regulatory powers.

"Now that the plan is approved, I anticipate the Legislature will seek to work with the governor to advance legislation as needed," Bambrick said. "Our role will be to educate the public and lawmakers to build support for the plan and its implementation."

The final version of the plan says that for the "next several years and beyond, the implementation of the Climate Act necessitates an all-hands-on-deck approach across state government, with input from a broad array of stakeholders, technical advisors, and experts."

"Many strategies in the (energy roadmap) also require action on the part of local governments or the state legislature," the plan says.

National Fuel Gas Co. "will participate in all upcoming regulatory proceedings, strongly advocating for energy policies that prioritize consumer affordability and grid resiliency," said Donna DeCarolis, president of National Fuel's utility business.

DeCarolis, a council member, voted against the plan, which would threaten the demand for the natural gas that National Fuel's utility business transports.

Considine said she envisions changes being made to existing state regulations, to reflect the recommendations in the Climate Action Council's plan.

"Advocates will also be looking to lock in some of the good recommendations with legislation and make sure that specificity and dates are reflected in the law," she said.

The plan will also require a lot more state funding, Considine said: "Creating more revenue structures, making sure the state budget is aligned with the recommendations, is going to be another big priority."

Dottie Gallagher, the Partnership's president and CEO, said now that the council has approved the plan, "state legislators will have no choice but to engage and explain to their constituents how New York state is going to ensure affordable and reliable energy, especially since the (council's) plan fails to address either in any meaningful way."

New Yorkers for Affordable Energy, a coalition of businesses and utilities, plans to poll state residents about the plan's contents and share the results with state lawmakers, said executive director Michelle Hook.

"I think the thing that resonates most with elected officials is public sentiment, because it's their constituents," she said. "They want to do what their constituents want."

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