Costing Out Cuomo’s Green Tax

by Kenneth Girardin

 Governor Andrew Cuomo’s new Clean Energy Standard is shaping up to be one of the largest tax hikes in state history.

Beginning in January, the standard will force electricity ratepayers to subsidize costly windmills and solar panel farms, along with money-losing upstate nuclear plants, by requiring utilities and other electricity customers to purchase “renewable energy credits” (RECs) and “zero-emissions credits” (ZECs) from the state.

The standard is part of the governor’s goal of having the state get 50 percent of its electricity from renewables by 2030—up from 23 percent as of 2015.  Paradoxically, the PSC assumes that this policy can drive down prices even while mandating higher demand for renewables.

The credits are tied to the amount of power each utility purchases from the electrical grid, on a per-megawatt-hour basis. The state will be using the proceeds of the RECs and ZECs to pay renewable energy generators and upstate nuclear plants while they sell power to the grid at a loss. 

In ordering the Clean Energy Standard on August 1, the four members of the Public Service Commission (PSC) set percentages of electricity usage that need to be offset with REC purchases each year beginning in 2017.

The New York State Energy Research and Development Authority (NYSERDA), which will play a key role in implementing the standard, hasn’t yet set a price for RECs. However, equivalent credits in Connecticut, Massachusetts and Rhode Island are trading for more than $40. 

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Source: Empire Center, NY Torch (via The Empire Report)