Governor Kathy Hochul’s new plan may lead to higher gas and heating costs, raising concerns among New Yorkers about affordability.
New York: It’s like a battle for drivers in the Empire State.
Governor Kathy Hochul is gearing up to announce a new anti-pollution initiative during her State of the State speech. Critics are worried it could raise home heating costs and gas prices by as much as 22 cents a gallon.
This “cap and invest” program is coming right after a new $9 congestion toll for entering Manhattan. The idea is to cut carbon emissions by making oil companies pay for their greenhouse gases, but many think those costs will just get passed down to us, the consumers.
John Howard, a former utility regulator, expressed his concerns, saying, “Raising the price of petroleum products doesn’t make New York affordable.” He added that it might just give people another reason to leave the state.
The funds from this plan are supposed to support green initiatives, like electrifying buildings, as the state pushes against fossil fuel companies. But some folks are worried that regular residents will bear the brunt of these changes.
Last month, Hochul signed a law that requires oil, natural gas, and coal companies to pay a whopping $75 billion for their carbon emissions, which some say contribute to climate change.
According to an analysis by Upstate United, under this plan, drivers could see an extra 12 cents per gallon at the pump next year and 22 cents by 2027. That’s a significant jump!
In terms of local impact, Suffolk County could face a $68.8 million increase, while Nassau would see $51.1 million, and other counties like Westchester and Erie would also feel the pinch.
And it’s not just gas prices; home heating fuels like natural gas and propane are expected to cost more too.
Currently, New York drivers pay the ninth highest gas prices in the U.S., and this plan could push them into sixth place. To help ease the pain, Hochul might offer subsidies to lower-income residents as the state transitions to cleaner energy.
Hochul’s office hasn’t revealed much ahead of her Tuesday address in Albany, but her spokesman mentioned that she’s focused on lowering living costs and putting money back in New Yorkers’ pockets.
However, the $230 billion state budget approved in 2023 already included this “cap and invest” plan, and officials acknowledged it would likely lead to higher energy costs in the future.
Experts have warned that gasoline prices could jump by 62 cents per gallon, and natural gas costs might soar by 80% due to this plan.
As fuel producers pay for their carbon emissions, they’ll likely pass those costs onto us, the consumers. The plan aims to limit total carbon emissions statewide and includes recommendations to help New Yorkers cope with the price hikes.
This initiative is part of the state’s ambitious goal to cut greenhouse gas emissions by 85% by 2050, as outlined in the Climate Leadership and Community Protection Act.
Hochul’s congestion pricing in Manhattan is just one part of this broader strategy. The cap and invest plan will create a market where polluting companies can buy or trade emissions rights, generating revenue for climate investments.
Funds from these carbon auctions will go into a “Climate Action Fund” to support green energy programs, helping the state meet its emissions reduction goals.
To comply with the law and achieve net-zero emissions by 2050, the state estimates it will need at least $15 billion annually in both private and public investments.
Interestingly, a report from New York Focus noted that similar programs in California and Washington raised gas prices by about 27 cents per gallon. However, lower-income New Yorkers might benefit from rebates, while middle-income families could see a modest increase of around $120 in the first year.
The cap and invest plan will limit total carbon emissions allowed in the state, and a carbon price will be set through state-run auctions, allowing companies to bid on carbon credits instead of cutting emissions directly.
Polluting companies, like utilities and factories, will need to buy enough allowances to cover their emissions each year.
