Freedom Line Blog

There’s additional reason for optimism amid the ongoing battle against New York Governor Andrew Cuomo’s crony-capitalist green energy subsidy boondoggle that CFIF has been monitoring since last summer.

Cuomo’s “Clean Energy Standard” (CES) scheme mandates that fully half of all state energy be generated by carbon-neutral plants in just over a decade.  Alarmingly, it comes at a cost of $1 billion in just its first two years, and $8 billion over its entire term.  Making matters worse, it amounts to crony capitalism because all of the CES subsidies would go to a single company named Exelon, owner of the financially unsustainable upstate nuclear plants.  And conspicuously, the plan was approved by a Power Service Commission (PSC) composed entirely of members selected by Cuomo.

Opposition to the boondoggle is bipartisan, and even environmental groups have attacked it as an “$8 billion bailout of three upstate nuclear power plants.”

And who would pay?  New York consumers.

But now, Republican state senator John Flanagan has proposed an alternative funding mechanism, one that would spare pressed taxpayers from paying through the nose to sustain failing nuclear energy plants at the center of the controversial program, as reported by Politico:

‘The state already devotes substantial resources to clean energy, and we are supporting of many of those initiatives,’ said Flanagan spokesman Scott Reif.  ‘We believe that this can be funded through existing resources, and not on the backs of ratepayers.’

Flanagan’s proposal retains the subsidy for nuclear plants, which has strong support from upstate members of his conference who represent districts in which the plants are located.  At the same time, it lessens the impact on ratepayers of the subsidy, including those in Flanagan’s district on Long Island who are still paying for the shuttered Shoreham nuclear plant.

It would also gut a key part of Cuomo’s ambitious renewable energy plan, of which the nuclear subsidy is a component.  Cuomo officials have touted the subsidy, which pays the owner of the nuclear plants based on the social cost of carbon avoided by the zero-emissions attribute of the plants, as a bridge to renewable energy sources, ensuring that the plants aren’t replaced with fossil fuel generators.

Flanagan’s measure eliminates that portion of the Clean Energy Standard and requires ratepayers to get a refund.”

CFIF applauds Flanagan’s leadership in highlighting how Cuomo’s Solyndra-like green energy bailout is a costly loser for New York state ratepayers.  Now it’s up to both the New York House and Senate to resolve this matter before its session ends next week.

Things are going from bad to worse for New York Governor Andrew Cuomo’s crony capitalist green energy subsidy boondoggle.

For readers who remain unaware of this catastrophe, last August the state’s Public Service Commission (appointed entirely by Gov. Cuomo himself) rushed through a “Clean Energy Standard” requiring 50% of state power to come from green sources by 2030.  It forces healthy power companies to buy “Zero Emission Credits” from a state bureaucracy, whose proceeds in turn go to struggling upstate plants.  And here’s the kicker.  In addition to costing New York citizens and businesses $1 billion in its first year and an estimated $8 billion over the course of the scheme, all of those subsidies go to plants owned by a single company named Exelon.  In other words, a state-level Solyndra.

The plan is so objectionable that even environmentalists and those on the political left have turned against it, and the Cuomo Administration has already been forced to dramatically scale it back.

Now even the left-leaning Albany Times Union is excoriating this debacle in a new piece entitled “A Surprise Tax on the Way”:

By its own account, 2016 was a ‘monumental year’ for Exelon, for good reason.  It’s not every year that a company gets a $7.6 billion boost courtesy of New Yorkers.

Exelon is slated to reap that windfall over the next 12 years through a fee on just about anyone who gets an electric bill in New York, all to support its nuclear power plants in the state.  That’s an energy tax by any other name, but as a fee levied by a state commission, it has drawn far less attention that, say, an income tax increase of that scale would receive…

One might be tempted to say, fine, let communities make up their own minds about nuclear power, except for this:  The entire state will have to foot the bill for a $7.6 billion economic development program to pay for 2,100 jobs for just a dozen more years and directly enrich one of the nation’s wealthiest power companies.  All this was decided by the governor and three members of the Public Service Commission (which will shortly be down to only two).  Hardly taxation with representation.”

The good news, as the Times Union notes, is that the state legislature can quickly remedy the situation:

Lawmakers, however, will have a chance to take a closer look at this huge corporate subsidy for a company with an annual net income of more than $2 billion…

With the fee due to take effect in April, and the legislature next week scheduled to review the energy and environment portions of the governor’s budget, it’s a good time for lawmakers to consider if this is the best route to a clean energy future, the best way to help upstate communities, and the best use of the public’s money.  They may agree this is a reasonable short-term strategy.  Or they may conclude there are far better investments the state could make in these areas and in clean energy, at far less cost to hard-working New Yorkers.”

For the sake of New York consumers and businesses, hopefully legislators will heed that advice and put an end to a program that has already proven a disaster, and will only get worse if allowed to continue into the next decade.

In an op-ed published last week at The Daily Caller, CFIF Sr. Vice President Timothy Lee explains how New York Governor Andrew Cuomo’s Administration remains unable to defend its crony capitalist Clean Energy Standard (CES) against burgeoning bipartisan public opposition.

According to Mr. Lee:

Conspicuously, Cuomo Administration officials remain unable to defend the plan against burgeoning public opposition.  In a recent local television appearance, Cuomo’s Public Service Commission Chair Audrey Zibelman couldn’t justify the decision to provide billions of dollars in subsidies to upstate plants while simultaneously closing downstate plants, and she stubbornly refused to acknowledge the plan’s high costs.

Nuclear power remains a reliable domestic energy source that the United States can cleanly and safely utilize to a far greater extent.

Governor Cuomo’s crony capitalist CES scheme isn’t the way to go about it.  The growing bipartisan opposition movement is an encouraging sign, one that should confirm for New Yorkers of all political leanings that the plan should be rejected.

Read the entire op-ed here.

So there’s grave new trouble for New York Governor Andrew Cuomo’s crony-capitalist, climate alarmist utility subsidy boondoggle:  a federal lawsuit.

Since its introduction in August, CFIF has been exposing Cuomo’s “Clean Energy Standard” (CES), a scheme approved by the state of New York’s Public Service Commission made up entirely of his own appointees.  In a nutshell, the CES creates an artificial mandate that 50% of all the state’s energy be generated by carbon-neutral plants just 13 years from now.   At a minimum, the CES will cost $1 billion in its first two years alone, and an estimated $8 billion over its 13-year existence.  And it illustrates the sort of crony capitalism that is all too common at the federal, state and local levels because the plan’s subsidies will be steered toward a single company named Exelon that owns financially struggling upstate nuclear plants.  We have nothing against Exelon in particular, but everything about this scheme smells fishy.  At the end of the day, moreover, the cost of all of this will fall upon New York residents and businesses.

Additionally, the CES program is so manifestly flawed that opposition is bipartisan.  New York environmental groups also attack what they describe as Governor Cuomo’s “$8 billion bailout of three upstate nuclear power plants.”

And now there’s even more grave trouble for CES.

In U.S. District Court, a lawsuit filed this week by the prominent law firm Boies Schiller seeks injunction against the scheme, alleging violation of the Interstate Commerce Clause and federal preemption under the Supremacy Clause of the U.S. Constitution, among other counts:

Several power plant owners sued New York state energy regulators Wednesday over the state’s approval of billions of dollars in subsidies for aging nuclear plants.  The suit filed in Manhattan federal court argues the bailout represents an illegal interference with the federal government’s role in regulating electric rates, and will unfairly burden the ratepayers who will pay for the subsidies, which could cost nearly $8 billion over 12 years.  ‘This is a bad deal for New Yorkers, who will see their electric bills go up across the state,’ said Jonathan Schiller, whose firm Boies, Schiller & Flexner is representing the plaintiffs…  ‘This subsidy will cost New Yorkers as much as $7.6 billion in payments to a single company.  This is illegal.'”

We’ll be monitoring and updating this lawsuit as events develop, but it presents another mortal threat to the CES plan.

And justifiably so.  Although we continue to support nuclear power as an energy source that should be exploited by the U.S. on the basis of both efficiency and national security, Governor Cuomo’s crony capitalist boondoggle is simply an unacceptable way to do it.  It’s not by accident that opposition is bipartisan, and now under judicial threat as well.

Bill Clinton made headlines this week when he openly attacked ObamaCare as a “crazy system” that “doesn’t make any sense.”

Something similar is now occurring in New York state.  Specifically, environmental groups and others on the political left are openly maligning the crony capitalist utility boondoggle that CFIF has been exposing since its introduction in August.

The “Clean Energy Standard” (CES), approved by the New York Public Service Commission (PSC) composed entirely of Governor Andrew Cuomo appointees, mandates that 50% of state energy derive from carbon-neutral sources by the year 2030.  And guess what?  The CES’s subsidies, which will cost at least $1 billion in the first two years and an estimated $8 billion over the course of the plan, will benefit financially struggling upstate nuclear energy plants owned by a single company named Exelon.  Ultimately, of course, that excessive and needless cost will be paid by New York consumers and businesses.

But CFIF and fellow conservative and libertarian groups are hardly alone in opposition to the CES.  As highlighted by North Country Public Radio in Canton, New York, environmental groups are openly opposing what it describes as Governor Cuomo’s “$8 billion bailout of three upstate nuclear power plants”:

“Cuomo plans to transition 50 percent of the state’s power to renewable energy by 2030.  Part of the program includes a multi-billion dollar subsidy to Exelon, the company that now runs two upstate nuclear plants, Nine Mile Point in Oswego and Ginna near Rochester, and is hoping to run a third plant, FitzPatrick, also in Oswego.

But some environmental groups, including New York Public Interest Research Group, say ratepayers, who were not consulted about the deal, will be stuck with the bill in the form of increased utility rates.

NYPIRG’s Blair Horner said the deal will result in $2.3 billion in increased payments for residential utility customers and even more for businesses in a state that already has among the highest utility rates in the nation, according to a study by the Public Utility Law Project.  ‘These charges are essentially a tax to keep aging nuclear power plants online,’ Horner said.”

It’s good to see that bipartisan wisdom isn’t completely a thing of the past.

It bears re-emphasis that nuclear power is a safe, clean, reliable domestic energy source that CFIF favors, one that the U.S. should utilize to a far greater extent.  Governor Cuomo’s crony capitalist, global warming alarmist CES scheme, however, is the wrong way to go about that.

New York citizens and businesses shouldn’t have to subsidize this sort of boondoggle, and hopefully the growing bipartisan opposition will force a course correction from Cuomo and the PSC.

CFIF remains vigilant in sounding the alarm about a costly new crony capitalist “Clean Energy Standard” (CES) boondoggle in New York state, and a new report this week from the Empire Center for Public Policy further exposes the destructively high cost that state citizens and businesses will pay under the plan.

The CES is a global warming alarmist scheme unveiled last month by New York’s Public Service Commission (PSC), whose members were appointed by Democratic Governor Andrew Cuomo.  The plan imposes a draconian demand that at least 50% of the state’s energy will come from carbon-neutral plants like solar and wind by just 14 years from today.  The CES plan would compel New York power generators to purchase “Zero Emission Credits” (ZECs) from carbon-neutral generators through a state government bureaucracy, which would in turn be handed to struggling upstate nuclear power plants.

Not only is the plan extremely costly – at least an additional $1 billion in the first two years alone, and an estimated $8 billion over the CES plan’s lifespan – but it amounts to yet another governmental example of crony capitalism because it benefits a single company named Exelon.

Matters only got worse this week for the CES boondoggle when the Empire Center released a report finding that the plan will cost New York consumers $3.4 billion over just the first five years.  As summarized by Empire Center analyst Ken Girardin, existing carbon-neutral plants don’t generate nearly enough power to sustain the scheme, and it will also require costly new infrastructure:

The new standard’s goal for solar power would translate into roughly 200 times the capacity of New York’s largest existing utility-grade solar panel farm, which is at Brookhaven National Laboratory on Long Island.  It also calls for enough new land-based wind turbines to cover, at a minimum, an area the size of Putnam County.

Most of the added solar and land-based wind-generating capacity would have to be located upstate – but nearly two-thirds of the state’s electricity is consumed downstate, and power lines linking the regions aren’t up to the task.  In fact, the transmission grid already required extensive upgrades before the new mandate was imposed, as Governor Cuomo acknowledged when he pushed during his first term for grid improvements called ‘the Energy Highway.’  But the highway is stalled, and the Clean Energy Standard doesn’t deal with the issue.

Another problem:  solar panels and wind turbines generate power only intermittently, since the sun doesn’t always shine and the wind doesn’t always blow.  But the new standard also makes no allowance for energy storage or standby generators powered by conventional sources, which would add further to the cost of a big shift to renewables.”

“It’s one of the biggest tax hikes in state history,” Mr. Girardin noted, “and it’s a hidden tax that they will never see on their bills.”

It’s bad enough that the CES constitutes yet another example of unnecessary crony capitalism perpetrated by the climate change-industrial complex.  With the Empire Center exposing just how costly it will be for New York state citizens and businesses, there’s no excuse for failing to stop it before the damage is done.

How much more in your monthly utility bill would you be happy to pay to combat global warming?  Probably not much, if anything.

Unfortunately, New York state residents are being lectured that they shouldn’t have any choice.

That’s the upshot of a festering crony capitalist utility boondoggle cooked up by state legislators in the name of global warming alarmism, as we at CFIF detailed earlier this month.

By way of refresher, the New York Public Service Commission (PSC) approved a new “Clean Energy Standard” (CES) last month, which requires that carbon-neutral sources account for at least 50% of energy generated in the state by the year 2030.  Making matters worse, CES provisions require power companies to buy Zero Emission Credits (ZECs) from a state government bureaucracy to benefit financially struggling upstate nuclear energy plants.  Those subsidies guarantee $1 billion for the struggling plants in the first two years of the plan alone, with an estimated $8 billion over the full course of the CES plan.

And these subsidies will reportedly benefit a single company named Exelon, which controls the struggling plants.  Think of it as New York’s own little Solyndra boondoggle.

Naturally, the cost of this scheme will fall upon New York residents and businesses, regardless of whether they receive any power from the subsidized nuclear plants upstate.

To their credit, state lawmakers recognized the numerous flaws in the CES plan and spelled them out in a recent letter to PSC Chairwoman Audrey Zibelman, also demanding a more open public accounting.

Chairwoman Zibelman’s response only made matters worse, rationalizing that, “compared to the cost of climate change that we have already experienced in the State, this is a very modest burden”:

Carbon emissions themselves are not geographically bounded.  The CES allocates the obligation to meet the 50 percent renewables goals and zero-emission credits to all of the consumers of the State because all consumers will benefit from reducing carbon emissions…  To suggest that downstate consumers should be less responsible for maintaining the nuclear-zero emissions attributes would undoubtedly require us to apply the same logic to allocate responsibility to reduce the harm caused by fossil-fuel combustion.  Not only would that fly in the face of sound thinking regarding our responsibility to the environment, it would suggest that because most of our fossil fuel emissions are caused by downstate power generation, we would assign a higher responsibility to downstate customers for the CES based upon the local energy mix.  The benefits of addressing climate change are also significant for the downstate, coastal region.”

Then came the best (or worst) part from Chairwoman Zibelman.  Namely, she repeated the debunked claim that global warming causes hurricane activity and that we’d only witness more and more soon.  More informed Americans, however, will recall that after Hurricane Katrina in 2005, we were told that global warming was the cause, and we’d only see more and more Katrinas as a result.  Instead, the U.S. has now gone the longest stretch in history without a major hurricane.

Ooops.

Regardless, the bottom line is that New York’s CES plan is a crony capitalist, global warming alarmist boondoggle.  It can’t be justified on any rationalization, least of all false global warming illogic.