The High Cost of Climate Cronyism

Charles  Sauer
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Posted: Sep 28, 2016 10:08 AM
The High Cost of Climate Cronyism

In Lewis Carroll’s Through the Looking Glass, the sensible Alice notes to the odd White Queen that "One can't believe impossible things." The queen refutes Alice, telling her that she hasn’t had enough practice, and sometimes the queen has “believed as many as six impossible things before breakfast."

The White Queen is a great role-model for government bureaucrats, who can easily spend someone else’s money on six new programs before they even gavel in a new session. The only thing keeping them from this is public accountability. Given the high cost of a new program that Gov. Andrew Cuomo (D-NY) is attempting to implement – it’s time to start holding him accountable.

New York’s Public Service Commission (PSC), which Cuomo appointed, recently approved a statewide Clean Energy Standard (CES). The Commission calls for several items including ramping up New York’s carbon-neutral energy production to provide 50% of New York’s energy needs by 2030 (that’s just 14 years away now). The commission also called for a new Zero Emission Credit which, starting in April of 2017, will be a regressive tax on energy consumers in New York.

This is all in the name of saving the environment, but if you believe that’s an impossible thing then stop reading. It’s actually about kick-backs to Cuomo’s cronies. A recent paper from the Empire Center notes not only the high cost but also the misleading statements from the PSC about those costs.

“The PSC initially estimated that the new standard would add less than $1 to the average monthly residential electricity bill, while the governor more recently put the figure at less than $2 a month,” according to the paper. “The methodology behind these estimates has never been made public. In fact, as explained below, the actual cost is likely to be higher.”

In fact, the Empire Center’s paper forecasts a cost of almost $3.4 billion dollars over the next five years or $3.50 per customer per month, and that might just be scratching the service because the New York State Energy Research and Development Authority (NYSERDA) has yet to set the rates for their Renewable Energy Credits (RECs).

“NYSERDA has not yet set a price for RECs, but the renewable standards in place in three New England states give an indication of what New Yorkers can expect to pay,” the paper continues. “Since 2013, RECs in Connecticut, Massachusetts, and Rhode Island have consistently cost more than $40 per mega-watt-hour. Assuming New York’s RECs also cost $40, the five-year cost of the Clean Energy Standard will be more than $3 billion.”

This new tax won’t be paid by large energy providers, of course. New Yorkers – who already have one of the worst tax burdens in the country – will pay this new regressive tax, further stalling middle-class wage growth and particularly hurting those residents on public support.

But no. This tax is good for them. Let’s make it seven impossible things before this breakfast.

The real solution for the people of New York is competition. The nuclear power plants are losing money, in large part, because they are forced to allow the more expensive renewables to sell while the wind blows. Without those policies the nuclear power plants would be alright, but trying to run a business with both hands tied behind your back is tough especially without further running up the costs.

The Empire Center sums up its paper, “New York residents and businesses are already paying some of the highest electricity prices in the nation. The Clean Energy Standard is likely to drive prices much higher while producing little, if any, progress towards the goal of reducing carbon dioxide emissions.”

As with so much of the cult of climate change, the threat of global catastrophe is used to spur fear, which is used to grab money. Cronies have a million ideas for someone else’s money.

The only way to push back against the cronies is to stand up to them. If they are going to continue thinking about ways to spend money that they don’t have, like a perverted version of the White Queen, we need remind them that money comes from real people, with real bills, and real problems. Using a regressive tax as a public policy Band-Aid to pay off an industry that has been hurt (and is going to continue to be hurt by the same policies) is not the solution.

Gov. Cuomo needs to realize he works for New Yorkers and not the environmentalist industrial complex. His panel needs to go back to the drawing board and find new ways to save New Yorkers money instead of charging them more merely for living in state and flipping a light switch. It is hard to get ahead and just because a governor has an ill-conceived policy goal doesn’t mean that everyone else should pay for it.

I know it sounds impossible, but I know he can do it.