Research & Commentary: Meeting Clean Energy Standard Mandates Could Cost New York Ratepayers, Businesses $1 Trillion

Published August 28, 2017

A report released in August 2017 by Jonathan A. Lesser of the Manhattan Institute, titled “New York’s Clean Energy Programs: The High Cost of Symbolic Environmentalism,” says New York State’s 2016 Clean Energy Standard (CES), which mandates Empire State utilities produce at least 50 percent of all the electricity sold in the state via renewable generation by 2030, will significantly raise electricity costs for New Yorkers while simultaneously having “no measureable impact” on the climate. CES also requires New York utilities to reduce their greenhouse gas (GHG) emissions 40 percent by 2030 and 80 percent below 1990 levels by 2050 (known as “80 by 50”).

Renewable energy mandates like CES – often referred to as “renewable power mandates” or “renewable portfolio standards” – force expensive, heavily subsidized electricity on ratepayers and taxpayers while providing few, if any, net environmental benefits, which is exactly what Lesser says will be the results of the new mandate. Lesser estimates the total costs of CES could approach $1 trillion to New York ratepayers and businesses. Meeting the interim goals – 50 percent by 2030 – could cost the state’s ratepayers $18 billion in above-market electricity costs by 2030. Total above-market electricity costs by 2050 could approach $93 billion. (A 2016 report from the Empire Center estimates CES would cost state ratepayers roughly $3.4 billion over the first five years of the program.)

“The primary reason for the CES, to reduce GHG emissions, will not lead to any measurable impacts on climate and thus no climate-related benefits,” Lesser wrote. “However, the CES will significantly raise electricity costs. It is doubtful that the ultimate 80 by 50 goal is even achievable with current technology, given that it will require the almost complete electrification of the New York economy, which will entail constructing vast quantities of additional renewable generation. … The bottom line is that New York’s Clean Energy Standard appears to be an exercise in symbolic environmentalism. It will provide almost no measurable benefits, while imposing huge costs, including disproportionate costs on lower-income residents.”

To get New York to the 50 percent renewables mark within the next 13 years, it would require a massive investment in wind and solar energy sources. Wind energy sources would need to triple, requiring roughly 2,090 additional turbines to be brought online. The amount of land required to accomplish this is estimated between 196 square miles and 922 square miles. To demonstrate how much land these turbines would cover, only 23 of New York’s 62 counties are larger than 922 square miles.

An additional 152 expensive turbines would also have to be built offshore—either in the Atlantic Ocean or Lake Ontario. The country’s first offshore wind farm, built off the coast of Rhode Island’s Block Island, cost $300 million for the construction of just five turbines. These turbines will provide power for 17,000 homes, meaning the wind farm costs roughly $17,600 per home powered.

Wind power alone, however, wouldn’t be enough. Solar capacity in New York State would also have to grow by 19,900 percent beyond existing capacity. This would require an additional 38 square miles of solar farms, which is twice the size of Manhattan Island.

Lesser notes meeting the full “80 by 50” mandate would require installing either 100,000 megawatts (MW) of offshore wind generation, 150,000 MW of onshore wind generation, or 300,000 MW of solar photovoltaic (PV) generation. “By comparison,” he notes, “in 2015 about 11,300 MW of new solar PV capacity was installed in the entire U.S.”    

At 15.28 cents per kilowatt hour, New York currently has the sixth-highest retail electricity prices in the continental United States, according to the U.S. Energy Information Administration. A 2016 WalletHub study also found at $284 a month, Empire State residents face total energy costs that rank in the top half of states, and the Tax Foundation already ranks New York’s tax climate the second-worst in the country. CES will make everything more expensive for working families in New York, who are already pinched by the state’s high costs, leaving them less to spend and save – all without any guaranteed environmental benefits.

The following documents provide more information on renewable energy mandates.

New York’s Clean Energy programs: The High Cost of Symbolic Environmentalism
This report by Jonathan A. Lesser of the Manhattan Institute determines New York State’s Clean Energy Standard could cost state ratepayers and businesses $1 trillion by 2050 while providing no concomitant climate-related benefits.

Green Overload: New York State’s Ratepayer-Zapping Renewable Energy Mandate
This report by Kenneth Girardin and Annette Brocks of the Empire Center examines New York State’s Clean Energy Standard  and determines the renewable energy mandate will cost New York ratepayers more than $3.4 billion over the next five years.

Evaluating the Costs and Benefits of Renewable Portfolio Standards
This paper by Timothy J. Considine, a distinguished professor of energy economics at the School of Energy Resources and the Department of Economics and Finance at the University of Wyoming, examines the renewable portfolio standards (RPS) of 12 different states and concludes while RPS investments stimulate economic activity, the negative economic impacts associated with higher electricity prices offset the claimed economic advantages of these RPS investments.

Research & Commentary: Higher State Support for Green Energy Increases Energy Costs for Consumers–commentary-higher-state-support-for-green-energy-increases-energy-costs-for-consumers?source=policybot
Heartland Institute Policy Analyst Tim Benson discusses an analysis by the Daily Caller News Foundation (DCNF), which found, “States which offered rebates, buy-back programs, tax exemptions and direct cash subsidies to green energy were 64 percent more likely to have higher than average electric bills. For every additional pro-green energy policy in a state, the average price of electricity rose by about .01 cents per kilowatt-hour.” 

The Status of Renewable Electricity Mandates in the States
The Institute for Energy Research finds states with renewable electricity mandates have on average 40 percent higher electricity rates than those without such mandates. 

What Happens to an Economy When Forced to Use Renewable Energy?
The Manhattan Institute conducted an economic analysis of the effects renewable portfolio standards (RPS) had on the average price of electricity in states with mandates compared to those without mandates. The study found residential and commercial electricity rates were significantly higher in states with RPS mandates than in states without them. 

Study: Consumers Unwilling to Pay More for Renewable Energy
Relatively few consumers are willing to pay extra for renewable energy offered under voluntary “green” pricing programs, according to a report from the Institute for Energy Research. 


Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Environment & Climate News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

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