By Sienna Daviau
With OPEC’s October decision to cut oil production and the invasion of Ukraine disrupting the supply chain, it’s unsurprising most Americans are bracing for higher utility bills this winter. But for those in New York, there is a lesser-known factor at play.
Starting in January 2023, Con Edison customers in NYS may start seeing higher energy bills as a result of a new proposal that will raise Con Ed’s electricity revenue by $1.2 billion and natural gas revenues by $500 million. This would translate to a rate hike for electricity and gas of 10 and 15 percent, respectively. On average, state officials say the proposal would result in an extra $20.90 per month for electricity and $37.88 more for gas, resulting in an over $700 dollar annual climb for the average customer. These would be the steepest hikes in fifteen years.
In late November, residents and state officials of Northern Brooklyn and Queens convened a “People’s Hearing” in Astoria to discuss the Con Ed proposal. While residents and officials are troubled by the lack of public awareness around the proposal (many residents are unaware of the rate hike) the substantial concern is where the revenue from the hikes will be apportioned to, specifically the instances of the funds being used to renovate fossil fuel infrastructure – upgrades to Con Ed’s liquid natural gas plant in Astoria and expansions of pipelines, also in Queens. Con Ed has stated that its rate filings will fund investments in clean energy and reduce emissions. One of these emission-reducing investments ($400m to pipeline upgrades) stems from Con Ed’s commitment to replace leak-prone gas pipelines by 2038. Con Ed considers this a green initiative since reducing leaks reduces methane released, but the efficiency and effectiveness has been questioned – as demonstrated when consulting firm Synapse Energy Economics testified that, “an approach based on building retrofits, electrification, and pipeline retirement could reduce emissions at a cost per ton that is 77 percent less expensive.” Replacing pipelines, which last decades, is also not in line with the State’s clean energy goals – NYS is targeting 100% zero-emission electricity by 2040.
The proposal is more frustrating when considering arguments against carbon tax bills citing higher energy costs to consumers. The most broadly supported carbon tax and dividend bill is Energy Innovation and Carbon Dividend act which was first introduced in the House in 2018. The bill proposes a tax on carbon producers that would later be distributed out to the public as dividends. The dividend is flat across incomes, designed so lower-income Americans would end up with the highest increase in household income. A carbon tax/dividend proposal stands out among existing green legislation in the IRA as it would enact a penalty on emissions, compared to legislation that offers optional incentives. Hundreds of billions of dollars are made selling fossil fuels each year, and it is not the producers who are immediately incurring the negative effects and costs. If the costs were expensed directly to the producers, often powerful corporations, only then would they be motivated to cut back. In a country where the political system is dominated by corporate money and objectives, it is difficult to envision a path to limiting warming at the extent needed where corporations are able to continue to emit fossil fuels without paying any direct costs.
And yet the bill has not come close to becoming law, as opponents of the bill effectively argue that a new tax levied on carbon emitters would translate to skyrocketing energy bills when corporations simply raise prices to combat the fee. Some studies show that low-income households will likely pay a higher cost at first but most agree that eventually a carbon tax/dividend would result in a net increase in household income.
In 2018 97% House Republicans voted no to a carbon tax, a text of the resolution claiming: “A carbon tax would be detrimental to the United States economy … [and] to American families and businesses, and is not in the best interest of the United States.” This argument doesn’t hold water when looking into the statistics outlining the costs that unchecked climate change could ensue. The White House Office of Management and Budget released a report analyzing the impact of climate check on the federal budget. Based on current warming trends, the study estimated that GDP could shrink by 10% annually by the end of the century. This is equivalent to about a $2 trillion annual decrease in the budget in today’s dollars. For frame of reference, the Biden administration’s entire annual budget for 2023 is a little under $6 trillion.
COP27 further cemented the fear that limiting warming to 1.5 degree Celsius may be off the table, and a 2-degree world could mean catastrophic damage for many communities. It’s well known a carbon tax could be critical in this fight. If New Yorkers are about to see their energy bills rise, isn’t this the cause we would rather be fighting for?
Sienna Daviau is based in Chelsea, Manhattan where she does work for the Brooklyn and Manhattan Chapters of Climate Citizens Lobby (CCL).
The opinions, content and/or information in this article are those of the author and are independent of BK Reader.
