It’s starting to feel like an Empire State war on drivers.
Gov. Kathy Hochul is expected to announce an anti-pollution push in her State of the State speech Tuesday that critics warn may hike home-heating costs and send gas prices soaring by as much as 22 cents on the gallon.
The sweeping “cap and invest” program — which comes on the heels of a new $9 congestion toll to enter Manhattan — aims to reduce carbon emissions by forcing oil companies to pay for greenhouse gases, a move that the industry giants are likely to pass onto consumers.
“They have to raise the price of petroleum products. I don’t know how raising the costs makes New York affordable,” said John Howard, a former member of the Public Service Commission, the state’s utility regulator.
“It’s another reason to leave New York.”
Proceeds from the plan would be used to fund green initiatives like electrifying buildings in the latest push by the administration against fossil fuel companies even as some worry it’s residents who will be caught in the crosshairs.
Last month, Hochul approved a controversial law that will force oil, natural-gas and coal companies to fork over a staggering $75 billion to the state for carbon emissions and allegedly contributing to climate change.
“Under Cap and Invest motorists could pay an extra 12 cents a gallon at the pump next year and 22 cents per gallon as soon as 2027,” an analysis by the group Upstate United claims.
The increase at the pump, according to the analysis, would be $68.8 million in Suffolk County, $51.1 million in Nassau, $26.6 million in Westchester, $26.38 million in Erie, $22.7 million in Onondaga, $21.4 million in Monroe and $19.79 million in Albany.
“Consumers would also pay more for home heating fuels including natural gas, propane
and oil,” the group added.
The study said New York drivers currently pay the ninth highest gas prices in the country, and the cap and investment program would boost it into sixth place.
The governor would likely offer subsidies to lower income New Yorkers to offset sticker shock as New York transitions toward clean energy and away from fossil fuel.
Hochul’s office declined to comment on what she has up her sleeve ahead of Tuesday’s address in Albany, when she lays out her policy agenda.
“Governor Hochul is focused on lowering the cost of living, putting money back in New Yorkers’ pockets with refunds, tax credits and more,” Hochul spokesman Avi Small said. “The Governor will unveil her full State of the State Agenda on Tuesday.”
But the $230 billion state budget approved in 2023 included a “cap and invest” plan to cut carbon emissions, and Hochul administration officials at the time admitted it would spark future spikes in energy costs.
Gasoline prices could increase by 62 cents per gallon while natural gas costs might skyrocket by 80%, former state Department of Environmental Conservation Commissioner Basil Seggos said at the time.
The prices would go up as fuel producers pay for their carbon emissions under the plan, and then pass that cost on to consumers, Seggos said.
The cap and invest plan would limit the total carbon emissions allowed statewide as well as the potential number of carbon credits that companies could bid for instead of cutting their emissions. The plan would also include recommendations to help New Yorkers deal with the resulting price increases.
The program is aimed at helping achieve the state Climate Leadership and Community Protection Act’s ambitious goal to reduce greenhouse gas (GHG) emissions by 85 percent by 2050.
Carbon pricing caps create a market in which polluting companies purchase or trade the right to generate limited emissions, offering more flexibility in meeting emissions requirements and generating revenue for climate investments.
Proceeds from the carbon auctions will go to a “Climate Action Fund” to fund green energy programs to help the state meet the goal of reducing greenhouse gas emissions by 85% by 2050, per a 2019 state law.
The state estimates it’ll cost at least $15 billion per year, in both private and public investment, to remain in compliance with the law and reach net-zero emissions by 2050,
The New York Focus media outlet published a detail overview of the cap and invest plan.
It noted that programs in California and Washington boosted gas prices about 27 cents per gallon but lower-income New Yorkers could end up ahead with rebates while middle-income families would likely see a modest increase of about $120 more a year for the first year of the phase-in.
The cap and invest plan would limit the total carbon emissions allowed statewide.
A carbon price on emissions would be set through state-run auctions, allowing companies to bid on “allowances” or carbon credit instead of cutting their emissions, such as for emitting one ton of pollution.
Polluting entities, such as utilities and factories, must buy enough allowances to cover their emissions every year.
