Experts have cautioned states for years that climate mandates cannot happen in a bubble that ignores grid reliability and costs for consumers. As former Federal Energy Regulatory Commission Chairman Neil Chatterjee warned in 2021:

“It’s crucial that we don’t put ourselves in a position where we are accidentally driving out competitive resources that are needed to maintain reliability. But I fear that’s the direction we are heading.”

Despite this, states like California, Connecticut and New York plowed ahead with mandates that would limit oil and natural gas production, shut down traditional power generation sources, and require utilities to source significant amounts of fuel from renewable resources at an accelerated pace.

The result has been higher costs for consumers and ongoing questions over how these states will meet rising energy demand. As Todd Snitchler, President and CEO of the Electric Power Supply Association, recently warned, these costs are “a clear and predictable outcome from policies that put ambitious goals ahead of operational realities.”

Now, states that embraced those ambitious goals are stepping on the brakes and reversing course.

During the recent California legislative session, Governor Gavin Newsom signed a sweeping package on energy policy that enabled more oil and natural gas drilling in Kern County and went to work encouraging refineries to keep their doors open in the face of rising prices and potential fuel shortages.

It seems that New York is now having a similar “wake up call.”

New York Supreme Court Justice Julian Schreibman recently sided with environmentalists who sued the state over allegedly slow-walking implementation of its landmark climate bill to reach 40 percent emission reductions by 2030 and 85 percent by 2050.

Citing costs to consumers as a major concern, Gov. Hochul has vowed to repeal the decision. The state argues that the New York Department of Environmental Conservation (DEC) can no longer abide by these “infeasible” goals due to a “dramatic change in circumstances,” citing the Trump administration’s embrace of traditional fuels over renewable industries.

However, New York’s sweeping climate legislation was passed in 2019 – meaning, the state has had ample time to implement the law prior to the administration change, and perhaps economic realities are the real factor of concern here.

As E&E reports:

“DEC has found the regulations ‘infeasible’ because, ‘in its opinion, achieving the law’s targets ‘would require imposing extraordinary and damaging costs upon New Yorkers.’” (emphasis added)

Justice Schreibman ruled that the law is binding, and that the DEC has two options: to issue the regulations “and let the chips fall where they may for the State’s political actors.” Or, have the Legislature rewrite the climate law “so that the State’s elected representatives could make a determination about what costs their constituents can or cannot bear in the pursuit of reining in climate change.” (emphasis added)

Gov. Hochul has pledged that the state would review its options, including working with the Legislature to modify the 2019 law ahead of the Feb 6^th deadline.

This isn’t the first time that Gov. Hochul has backtracked anti-oil and gas sentiment recently. In an apparent compromise with the Trump administration, she signaled tacit support of new pipeline projects after years of keep-it-in-the-ground policies forcing New England to import their energy needs, thus raising costs.

New York power producers are also raising the alarm that New York’s policies must change. In response to the recent New York Independent System Operator’s (NYISO) Short-Term Assessment of Reliability report which showed major gaps in reliability needs due to planned retirements of traditionally-powered peaker plants, Independent Power Producers of New York (IPPNY) President and CEO Gavin J. Donohue said:

“The NYISO’s findings should be alarming to residents and serve as another wake up call for the State. Electric demand is continuing to drastically rise, and the State needs to look at all possible resources to safeguard the strict reliability standards that millions of New Yorkers depend on.”

He continued that “reliability margins will be breached in the near future due to the lack of resources with the same capabilities coming onto the system to replace the planned peaker retirements,” adding:

“New York cannot continue to walk a tightrope when it comes to reliability, health, and safety. Increasing dispatchable generation must be prioritized so that the State does not go dark.”

Bottom Line: Policies that place unrealistic climate goals ahead of the very real concern of energy costs are getting quickly backtracked in states that once hailed their banner laws as the gold standard. The reality is: domestic natural gas and oil help keep energy costs low, and low energy costs keep consumers happy.