New rates, same blame game

Politico

2 days ago

Presented by National Fuel
Good morning and welcome to the weekly Monday edition of the New York & New Jersey Energy newsletter. We'll take a look at the week ahead and look back on what you may have missed last week.
RATE BLAME GAME — Electric rates for New Jersey power customers went up nearly 20 percent on June 1, and lawmakers and state utility regulators are still trying to figure out what to do. Despite several months of legislative hearings, committee work and floor votes, no new legislation to tackle the issue has reached Gov. Phil Murphy's desk.
The Board of Public Utilities has asked for, but has yet to formally consider, plans by utilities to help cushion the blow and it seems likely that additional rate relief could come in the budget.
Meanwhile, the blame game continues. The latest salvos came when environmental activists protested outside PJM's headquarters last week with signs like, 'Bills too high? PJM is why,' to which PJM responded that the groups were 'protesting the results of their own actions' and said the protest was an exercise in 'blame shifting.'
So, FWIW, a quick recap of who is blaming who:
PJM: The grid operator whose auction last summer was responsible for the bulk of the rate increases cited a supply-demand crunch it's long warned about, state clean energy policies that haven't panned out with new generation and local permitting challenges that keep projects from getting built.
Gov. Phil Murphy and most Democrats have attacked PJM, largely citing the backlog of energy projects PJM has been unable to handle, delaying the construction of new power plants by years. 'In New Jersey, we're doing our part by bringing new resources to the market and making electricity more affordable for families and businesses as we look to a clean and resilient energy future,' the governor said in a statement last fall. 'However, our grid operator must work in lockstep with the states and recognize that the market isn't responding quickly enough due to current conditions of slow interconnection.'
Some Democrats have also attacked utility companies, which are not responsible for generation costs in New Jersey, and the BPU itself. 'The BPU has become a dumping ground for politicians,' Jersey City Mayor Steven Fulop said during a recent gubernatorial primary debate.
Republicans have criticized the BPU and the Murphy administration generally, in particular the governor's focus on offshore wind — a bet that didn't pan out, leaving the state starved of major new generation sources. Some Republicans have also criticized Murphy administration efforts to cushion the blow of cost increases, calling the timing of ideas to defer and spread out the rate hikes a political stunt, since it would keep bills from spiking before the election even though it would not actually save money for customers.
Utilities have tried to distance themselves from the rate increases, which are beyond their control in New Jersey, but that is an uphill battle, since the higher bills will come with their names on them. They have also raised their hands to build new power plants, if lawmakers felt inclined to undo the 1999 law that broke up vertically integrated utilities.
Merchant power companies who sell the power that is costing more argue that bills have been rising due to transmission and distribution costs, which utility companies do control. — Ry Rivard
SAA WHAT — POLITICO's Ry Rivard: Jersey Central Power & Light is about to spend $380 million on transmission projects meant to bring offshore wind power ashore — but first the company is asking the Board of Public Utilities whether the state is sure it wants the work done.
In 2022, the BPU approved $1 billion in onshore grid upgrades meant to accommodate future wind farms. (For those following closely, these are the State Agreement Approach projects PJM keeps talking about, also known as SAA.) But now the offshore wind industry is in turmoil, with every project that New Jersey had been planning for dead or delayed.
In a May 23 regulatory filing made public on Wednesday, JCP&L is curious whether it still has the green light to build projects to support the industry given 'new facts and circumstances.'
The company said it needs this guidance primarily because of the Trump administration's opposition to offshore wind in the state, but also because of delays in getting necessary local permits and a pause in the approval process for a low-interest federal loan worth up to $716 million.
The company is currently supposed to begin construction on hundreds of millions of dollars in projects this summer.
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Here's what we're watching:
TUESDAY— The Department of Environmental Conservation holds a hearing on 'cap and invest' reporting rules, 1 p.m., DEC Region 7 Headquarters, 5786 Widewaters Parkway, Syracuse. Environmental advocates will hold a press conference before the hearing at noon.
WEDNESDAY— The Department of Environmental Conservation holds a hearing on 'cap and invest' reporting rules, 1 p.m., DEC Central Office, 625 Broadway, Albany. Environmental groups hold a press conference beforehand, noon.
THURSDAY— Environmental groups hold a rally in support of NY HEAT, 10 a.m., Albany.
AROUND NEW YORK
— Sen. Liz Krueger floats a regional approach to transitioning the gas system. TBD if this trial balloon sinks or rises.
— DEMS: FUND BOEM: Democrats, including Reps. Frank Pallone (D-N.J.) and Dan Goldman (D-N.Y.), are pushing for 'robust funding' so the Bureau of Ocean Energy Management can do 'timely review and permitting of offshore wind projects,' despite the Trump administration efforts to halt offshore wind development. In a recent letter to the chair and ranking members of the House's Interior, Environment and Related Agencies Subcommittee, 17 Democrats said 'supporting offshore wind is a national security imperative.' — Ry Rivard
Around New Jersey
— The Sierra Club endorsed Rep. Mikie Sherrill's campaign for governor on Friday. Ben Jealous, the Sierra Club's executive director, called the Democrat 'a critical voice for protecting public health and lowering costs.'
— Flooding could lead to migration.
AROUND THE NATION
DOE STOPS SECOND PLANT FROM CLOSING: The federal Energy Department invoked emergency powers Friday to again keep a power plant operating ahead of its planned closure.
The department's emergency order directs the region's grid operator, PJM Interconnection, to ensure units at the Eddystone generating station stay running in order to minimize the risk of power outages. The plant, located south of Philadelphia, had been slated to close Saturday.
The order points to statements from PJM that its system faces 'growing resource adequacy concern,' in part due to load growth and the retirement of dispatchable resources. The planned retirement of Unit 3 and Unit 4 — each with 380 MW capacity — 'will exacerbate these resource adequacy issues,' the order said. The units can run on either natural gas or oil, depending on market conditions, according to operator Constellation Energy.
PJM said in a statement that it supported the move, calling it a 'prudent, term-limited step that will retain the covered generators for a 90-day period' and allow further analysis on the longer-term need and viability of the generators.
The order comes days after the department similarly invoked an emergency to keep a coal plant in Michigan running this summer.
Energy Secretary Chris Wright, speaking at the Reagan National Economic Forum on Friday, touted that action and pointed to recent blackouts in Louisiana. 'That's why we don't want to just go around closing firm, reliable power plants because it's fashionable,' he said.
Kit Kennedy, power sector managing director at the Natural Resources Defense Council, said the actions 'to keep these zombie plants online' were about 'a power grab; not a power emergency.' — Kelsey Tamborrino
ICYMI: The Conversation kicked off with Dr. Oz
In the premiere episode of The Conversation, Dasha Burns sat down with Dr. Mehmet Oz — now leading the Centers for Medicare and Medicaid Services — for a candid talk on drug prices, potential Medicaid cuts and why he's getting early morning calls from President Donald Trump. Plus, POLITICO's Jonathan Martin dished on the Ohio governor's race (featuring Elon Musk, Vivek Ramaswamy and former Ohio State football coach Jim Tressel), and Kyle Cheney unpacked Trump's legal battle over 'Liberation Day' tariffs.
Watch the full episode on YouTube. And don't miss a moment — subscribe now on Apple Podcasts or Spotify to get new episodes when they drop.
What you may have missed
PIPELINE PROJECTS RELAUNCHED — POLITICO's Marie J. French: Two major interstate pipelines to boost gas supply in the Northeast have been resurrected, setting up a test of New York's climate law. Pipeline developer Williams Companies announced Thursday that it's moving forward with both the Constitution and Northeast Supply Enhancement pipeline projects, which were previously rejected by former New York Gov. Andrew Cuomo. The pipelines have been a major priority for President Donald Trump.
Gov. Kathy Hochul has signaled openness to new gas pipelines, including during talks with Trump about restarting construction of an offshore wind project.
'My message is what I told the president: it's that I will make sure that any applicant for a pipeline — or any energy project — follows all state, local and federal law,' Hochul told reporters Thursday. 'That being said, we can look at this expansively — also consider the benefits at a time when energy costs are through the roof.'
'I have to look at this in a different lens and I'll continue being committed to our climate goals — I believe in them — but also the realization that we have to be more open-minded and expansive,' she added. 'They will have to follow our laws.'
Her office has said there was no agreement on a pipeline linked to the Empire Wind restart.
New York's climate law requires major emissions reductions that rest on electrifying buildings and cutting the use of natural gas. Environmental groups argue any new gas supply flies in the face of those requirements.
Hochul, just after she became governor, blocked permits for two natural gas power plants and cited the state's climate law. But she's become more focused on affordability and reliability issues as those concerns have grown in recent years.
Last year, she approved increased gas supply via an existing pipeline that state experts found was needed for reliability.
— Phil DeCicco, National Grid's general counsel for New York, said, 'We understand Williams has submitted a permit application for the Northeast Supply Enhancement Project. We will continue to work closely with our regulator as well as state and federal partners to evaluate all options to address the region's growing and critical energy needs.'
— FROM THE NOTEBOOK: The governor said she 'went to the mat' on Empire Wind over concerns about energy needs in New York City. 'I have said I'm open to nuclear,' she said on Thursday. 'That may be a radical thought to people but I need to power this state, take the economic burden and the cost off my citizens and my residents, but also be able to prepare for the innovation and the jobs that are coming here.'
CLEAN FUEL STANDARD PUSH — POLITICO's Marie J. French: Democratic state lawmakers and environmental advocates are pushing a controversial policy to promote low-carbon fuels in the waning days of the Albany legislative session. The concept has been kicking around Albany for years, and the debate over it remains contentious. The renewed push behind a low-carbon fuel standard is facing an uphill battle in the Assembly, but supporters are now pressing for the market-based policy as the Trump administration moves to erase California's clean car rules, which New York adopted.
'New York has to lead,' said Julie Tighe, president of the New York League of Conservation Voters, at an Albany press conference this week. 'We cannot let four years go by without taking real action to transition away from fossil fuels and Washington, D.C. is not going to help.'
The state's climate law requires a dramatic ratcheting down of greenhouse gas emissions, including an 85 percent reduction from 1990 levels by 2050. New York is not expected to meet the near-term 40 percent reduction target by 2030.
Transportation is one of the largest sources of emissions in New York, but the Legislature has implemented few policies to address the sector in recent years. The state did adopt regulations — enshrined in law — to mandate an increasing level of electric vehicle sales. Those clean car rules face an uncertain future though, after Congress voted earlier this month to overturn the ability of California and other states to implement the program.
ICYMI: BUS TERMINAL — New York Gov. Kathy Hochul and New Jersey Gov. Phil Murphy met in Hell's Kitchen Thursday afternoon for a ceremonial groundbreaking to replace the Port Authority bus terminal.
There was no love lost for the 70-year-old building that Hochul called 'basically a hellhole' and Rick Cotton, executive director of the Port Authority, said is 'one of the most reviled buildings in America.'
For decades, there has been talk about replacing the bus terminal but plans went nowhere.
Now, though, the two states are on the same page — thanks largely to a functional Port Authority with former New Jersey state Sen. Kevin O'Toole as chair and Cotton at the helm. (Amazing aside: O'Toole said every Port Authority vote in the past eight years has been unanimous.)
Plus, the money for the $10 billion, decade-long project seems to be there — $6 billion from the Port Authority, nearly $2 billion from the federal government and another $2 billion expected from city payment in lieu of taxes.
'This will be a transportation hub that welcomes travelers,' Murphy said. Roughly 200,000 NJ Transit commuters — far more than take the agency's trains — use the bus terminal each weekday.
The first phase of construction is a staging area for construction and buses that, when the new terminal is built, will be turned into a playground.
Spotted at the announcement: Rep. Jerry Nadler, state Sen. Brad Hoylman-Sigal, City Council Member Erik Bottcher, building trades leader Gary LaBarbera and First Deputy Mayor Randy Mastro — but not his boss, Mayor Eric Adams. — Ry Rivard
SENATE TAKES ON PLASTICS: The Senate passed a sweeping measure to reduce plastics and packaging waste on Wednesday evening. The measure, which would also eventually ban certain toxic chemicals from packaging, faces intense opposition from the chemicals and packaged foods industry.
Opponents say the bill will raise consumer costs and make some convenient packaged foods unavailable on store shelves in New York. Those concerns are gaining traction with some Assembly Democrats, who worry about affordability.
The Senate passed the packaging bill last year — but it did not get to a vote in the Assembly, where it faces a tougher path.
Assemblymember Deborah Glick, who sponsors the bill, last week said she remained 'guardedly optimistic' it would pass this session. She said the study circulated by business groups showing higher consumer costs included products that aren't covered in the bill.
Consumer Reports found there's no evidence it will result in cost increases and a Columbia University report found a potential $4 monthly increase, a point Sen. Pete Harckham raised during the Senate debate. He also cited savings for local governments by shifting recycling costs onto producers, although there's nothing requiring municipalities to cut taxes.
'This bill is not designed to put direct cash in people's pockets, but there are also going to be health saving costs,' Harckham said.
Republican lawmakers raised concerns about companies being unable to comply with some of the bans on specific chemicals in packaging. Harckham said there's a waiver process available.
'They're saying the technology doesn't exist for a lot of the mandates that are in this legislation,' said Republican state Sen. Dan Stec. 'This is going to cost our residents.'
Business groups have pushed an alternative bill that would give companies more control over reduction efforts and doesn't ban any chemicals from packaging.
'The problem with some of their packaging is that it's got toxic substances that are going to leach into our food,' Glick said.
The ban on specific chemicals doesn't take full effect for five years, when DEC will set a limit that is the lowest achievable level.
'We understand we're up against big money but I think that we either have to do something to protect the public in a very minor way or just fold up the tent and let the industry do whatever it wants,' she added. — Marie J. French
STATE FINALLY PLANS FOR EV CHARGING: New York is setting up an interagency working group to supercharge the state's efforts to electrify vehicles. The group will be tasked with developing a coordinated strategy to deploy EV charging infrastructure, including fast chargers on highways by leveraging new funding approved in the state budget. The working group will try to maximize usage of state-owned property for charging stations.
The new working group comes after federal action to roll back California's sales mandates for electric cars and trucks that New York has adopted. The Department of Environmental Conservation is offering a two-year delay of any penalties under the program, which California plans to sue to uphold.
The group will also consider how to address grid reliability as EV adoption increases and support commercial fleets creating transition plans — issues the Department of Public Service has been working on for years. Gov. Kathy Hochul last year vetoed a measure requiring the state to craft a fast charging station plan. — Marie J. French
CONGESTION PRICING GETS MORE GOOD NEWS — The federal judge who issued a temporary order on Tuesday preventing the Trump administration from killing New York's congestion pricing went one step further on Wednesday. In a second ruling this week, U.S. District Court Judge Lewis Liman issued an order that keeps congestion pricing alive until he rules on broader issues in the case. Those issues — largely whether Trump Transportation Secretary Sean Duffy has the authority to unilaterally cancel the program — will not be teed up for him until fall and Liman expects to rule 'before the end of the year.'
To be clear: The injunction is a major victory for the MTA and congestion pricing supporters and an indication that Liman is persuaded by New York's arguments against the Trump administration. Duffy's office did not immediately respond to a request for comment. — Ry Rivard