ENDING FOSSIL FUEL TAX BREAKS: As state policymakers search under the couch cushions for revenue to fund a host of priorities, environmental groups and some Democratic lawmakers want to end tax breaks for some fossil fuels. New York’s tax code is riddled with exemptions for fossil fuel use — to the tune of $1.6 billion annually. Much of that is for home heating fuels or other politically sensitive constituencies like farmers. But a scaled-down version of a bill to end all the exemptions (S3389) is included in the Senate budget. Assemblymember Jo Ann Simon, the sponsor of the bill, said she’s pushing it with Assembly negotiators as a revenue raiser. “This is not about raising taxes,” Simon said. “This is about eliminating a tax exemption to folks who are completely misaligned with our state climate goals and mandates.” The scaled-back measure targets tax breaks for commercial airline fuel and highly polluting “bunker” fuel used in the shipping industry, among others. It would increase state revenue by about $256 million. “We're working very hard on the Assembly side to get this to the table to ensure that, as this is being discussed in the negotiations, that the Assembly is open and having those conversations,” Simon said. “They've indicated to me that they're willing to do that.” Ending the exemptions is supported by a coalition of groups dubbed the “Stop Climate Polluter Handouts Act Coalition” including the Natural Resources Defense Council, the Climate Reality Project and NYPIRG. “The current bill really touches on some of the worst greenhouse gas emitting fuels,” said NRDC director of New York State government affairs Rich Schrader. — Marie J. French SUPER EXPENSIVE FUND: An EPA inspector general’s report looks at the reason combined sewer overflow tanks for the Gowanus Canal Superfund site is expected to cost $1 billion — 1,300 percent more than originally expected — and is more than six years behind schedule. The delays are largely older ones, prior to 2021, but “has prolonged exposures to contaminants in the Gowanus Canal, and could result in increased costs, such as redredging the canal.” — Ry Rivard FRACKING BAN BUT CONCERNS ON GAS RESTRICTIONS: An expansion of the state’s ban on fracking is headed to the governor’s desk. The ban on gas extraction using highly pressurized carbon dioxide sailed through the Assembly earlier and passed the Senate on Wednesday afternoon. “Let’s shut the door on this once and for all," state Sen. Pete Harckham, chair of the Environmental Conservation Committee, said about the project the bill is meant to block. But more controversial steps to reduce the state’s reliance on natural gas for heating homes and buildings face a much harder road as Assembly Democrats raise concerns about the impact on their constituents in the coming years. The Senate on Tuesday separately passed the “NY HEAT” bill, which would eliminate subsidies for new gas hookups and cap energy bills at 6 percent of income for all ratepayers. The measure would also empower the state’s utility regulator to — along with support for customers to switch to alternatives and after an extensive process — downsize the gas system. “The powers are there, but we don’t know when they’re going to use them,” said Assemblymember Ken Zebrowski, a Democrat from Rockland County who chairs the committee overseeing the Public Service Commission. Gov. Kathy Hochul’s budget also included a similar measure that would enable the commission to discontinue gas service if other options are deemed more in line with the state’s climate law. “It’s hard to change habits. We’re used to what we’ve had,” said Majority Leader Andrea Stewart-Cousins. “We explain it will cost more as we change the way we do things, but ultimately it will save our planet — not only now but for generations to come.” Proponents of the bill say it will help ensure energy bills are affordable and limit gas rate increases driven by expensive investments in existing and new infrastructure. Measures to address the heavy reliance of buildings on natural gas — 60 percent of homes use it, and the building sector comprises about a third of greenhouse gas emissions in the state — could be the biggest potential win for environmental advocates in the budget on climate policy. But there’s opposition from labor unions concerned about the impact on workers in the gas sector. Gas-only utility National Fuel has also been fighting the proposal as an existential threat to its business, as have various business groups. Senate Republicans held a press conference on Wednesday bashing the measure and its potential costs and impacts. “Those jobs will be gone. New York is no stranger to chasing good-paying jobs out of the state,” said Minority Leader Sen. Robert Ortt. Zebrowski said he’s concerned about what would happen in the future if the PSC determines replacing a section of pipeline is more expensive than switching a neighborhood to alternatives. He said specific dates or more clarity from the commission could be helpful. “I’ve been around long enough to think that there’s no way they’re going to retrofit everybody’s homes. There may be incentives, but what are those incentives and are they going to hit everyone on that road?” Zebrowski said. “If its a dollar-for-dollar reimbursement, let’s put that in the bill.” — Marie J. French NY RENEWS RALLY: The influential coalition that backed what became the state’s climate law returned to Albany to push for budget priorities including NY HEAT, the Climate Superfund bill and a package of spending proposals. “People are being displaced because of the inaction of the people in this building,” said Sen. Jessica Ramos, a Democrat from Queens, at the NY Renews rally. “We either build a union climate economy or we die.” — Marie J. French FALCONE OUT: Longtime Long Island Power Authority CEO Tom Falcone announced his plans to resign Monday, according to Newsday which first reported the move. In his resignation letter, Falcone indicated the decision was driven by a desire to devote more time to his family. He announced the decision about three months after a new LIPA chair joined the board — Tracey Edwards, who made hundreds of thousands in outside income while working a statutorily full-time role as a member of the Public Service Commission. “The next leader of LIPA will navigate the clean energy transition while maintaining reliability, affordability, fiscal sustainability, and the expiration of our service provider contract in December 2025,” Falcone wrote in his resignation letter. “The task ahead is enormously complex and will require the total commitment of a knowledgeable and experienced chief executive and team.” It’s another role on the energy and environmental team that Gov. Kathy Hochul will need to fill. She’s also looking for a replacement for departing Department of Environmental Conservation Commissioner Basil Seggos and has put forward some nominations for the Public Service Commission. Hochul offered congratulations in a statement. “For the last decade, he has worked to make the power system more reliable, support clean energy, and make sure the finances are sound,” she said. “Tom’s leadership and passion have helped create the foundation for the energy needs on Long Island and the Rockaways for now and many years to come." Falcone's resignation is effective May 31. — Marie J. French NEW NEW JERSEY CLIMATE ADVISER — Eric Miller, a familiar face around the statehouse for his work at NRDC, is Gov. Phil Murphy’s new head of the Office of Climate Action. Miller is the third person in the job in the past year. He replaces Catherine Klinger who last May replaced Jane Cohen; both have taken other jobs outside of state government. Miller has been involved in work to craft legislation that would make Murphy’s clean energy goals into law as a senior policy advocate on New Jersey climate and energy issues for NRDC. “Eric is a passionate advocate who has initiated high-impact policies across clean energy, building electrification, and transportation,” the governor said in a statement. “I am confident in Eric’s leadership, and I want to thank outgoing Executive Director Catherine Klinger for her notable contributions to this team and to the state.” Murphy also named Preethy Thangaraj, a policy adviser, as the climate office’s deputy director. — Ry Rivard UTILITY REGULATOR MOVEMENT: The Senate is expected to move forward with two nominees from Gov. Kathy Hochul for the Public Service Commission this week, according to a person familiar with the plans. A third nominee for an open seat has not yet been advanced by the governor. The two nominees, first reported by POLITICO, are Denise Sheehan, a former commissioner for the Department of Environmental Conservation, and Uchenna Bright, an environmental advocate. — Marie J. French DRIVING UP EV COSTS — POLITICO’s Ry Rivard: New Jersey Gov. Phil Murphy, a Democrat with some of the nation’s most aggressive climate goals, is looking to raise the cost of electric vehicles by thousands of dollars, in part by adding one of the highest EV fees in the country. GAS TAX GOES TO GOV — POLITICO’s Ry Rivard: The New Jersey Legislature approved an increase in the gas tax to fund transportation infrastructure Monday, with some Republicans and Democrats breaking ranks to support and oppose the plan. ASSEMBLY FLIRTS WITH CLIMATE SUPERFUND PROPOSAL: The Assembly Democratic conference has moved closer to embracing a charge on fossil fuel companies for historical pollution. But they stopped short of a full-throated endorsement of the Superfund-style climate damages measure that the Senate has previously passed and included in their one-house budget again this year. “The Assembly is supportive of holding fossil fuel polluters accountable for costs related to climate change via a cost-recovery method; however, any such approach cannot impact consumers who are already overburdened by adverse price increases,” the Assembly’s summary of its budget proposal reads. The conference is open to discussing the climate superfund measure but concerns remain about how it would impact consumers, according to Assembly staff. The “Climate Change Superfund Act” would raise $75 billion from fossil fuel companies based on the quantity of fossil fuels they sold from 2000 to 2018. The bill has gained significant support since it was first introduced in 2022 with more than 70 sponsors. Assembly EnergyChair Didi Barrett, a Democrat from Columbia County, recently signed on as a co-sponsor of the measure. “My job is to figure out how we’re going to get there and how we’re going to pay for it,” Barrett told POLITICO. “It’s kind of a cliche, but having all tools in the tool chest available to us is the only way we’re going to get there.” Proponents argue that companies won’t be able to pass along costs directly because the assessment will be based on historical sales and they’ll be competing with other companies with fewer liabilities under the law. “I don't think there's anything that we're doing that isn't going to impact consumers,” Barrett said. “This is a tool that I support and want to move forward with, but to pretend that this is not going to impact consumers is pretty, quite naive.” Hochul hasn’t supported the proposal. The Business Council of New York State, Inc., opposes the measure and raised concerns that the bill is “impractical” and “disingenuous” because it penalizes only fossil fuel producers, not consumers and others, for the negative impacts of emissions. — Marie J. French DEFORESTATION MEASURE REVISED — POLITICO’s Allison Prang: A New York state senator plans to introduce a revised bill that would require companies selling goods to the state to ensure they don’t contribute to tropical deforestation after Gov. Kathy Hochul vetoed an earlier version last year. State Sen. Liz Krueger, the bill’s sponsor, told POLITICO her office has had multiple conversations with the state’s Office of General Services, which is responsible for implementing and overseeing purchasing contracts, and that she’s confident the revised bill will pass the statehouse.
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