BIG WIND WIN — POLITICO’s Marie J. French: The first major offshore wind project in the United States has completed construction and is delivering power to New York, a major achievement for an industry that’s faced turbulence over the past year. The offshore wind portfolios of Northeast states — which underpin President Joe Biden’s climate goals and his targets for the industry — have suffered several cancellations as developers readjust to higher costs driven by supply chain issues, inflation and higher interest rates. But New York and other state officials have sought to reset and reframe the conversation, making new awards and celebrating progress on under-construction projects. 100 PERCENT BY 2035 MOVES — POLITICO’s Ry Rivard: New Jersey lawmakers on Thursday moved three major environment bills that would set a nation-leading clean energy standard, spend hundreds of millions of dollars to upgrade the electric grid and amend the state Constitution to provide legal rights to clean air and water. The clean energy bill would require the state to get 100 percent of its electricity from zero-carbon sources by 2035 — the most aggressive clean energy goal of any large state. GAS TAX HEADS TO FLOOR — The New Jersey Senate plans to take up a bill on Monday to raise the state’s gas tax by nearly 10 cents over the next five years to fund transportation infrastructure. The bill has not been amended and has cleared several committees in both chambers on party lines, including Assembly Appropriations on Thursday. Democratic lawmakers may have the votes to send it to the governor’s desk next week, without any Republican support. — Ry Rivard GAS BATTLE REDO: The need to reduce emissions from the state’s natural gas system — which heats 60 percent of homes — is set to divide Senate and Assembly Democrats once again. Last year, lawmakers and Gov. Kathy Hochul ultimately cut a deal to enact nation-leading limits on fossil fuel combustion in new buildings that begin to take effect in 2026. This year, Senate Democrats and Gov. Kathy Hochul want to take another sweeping step to enable the state’s utility regulator to limit expansions of the gas system further and even, in future years, begin dismantling sections of it. While a majority of Assembly Democrats support the legislative measure dubbed “NY HEAT,” those more expansive provisions were excluded from the one-house budget proposal. But Assembly Democratic leadership did officially signal openness to a smaller step: ending subsidies for new gas hookups. The conference is “exploring” that idea, a summary of the Assembly’s budget position posted before sunrise Wednesday states. “Any resulting proposal would include strong labor standards and protections, and workforce development programs to train, retrain, and transition the fossil-fuel workforce.” The Assembly also proposed $200 million aimed at keeping utility bills below 6 percent of income for low-income ratepayers. “We want to deal with the heating costs, the cost is an issue for low wage earners,” he said. Heastie said the other components of the NY HEAT Act weren’t included because they’re considered policy. That’s not enough to satisfy environmental advocates, who see a need to end the “obligation to serve” new gas customers and more flexibility for the Public Service Commission to regulate gas utility expansion and mandate additional steps as essential. The state’s climate plan also backs such changes. “The real driver of the gas rates is the maintenance and replacement of old gas mains,” said Jessica Azulay, executive director Alliance for a Green Energy Economy. Addressing the obligation to serve is “also the key to allowing gas utilities to plan their system.” The broader proposal to potentially enable the PSC to downsize the gas system and block existing buildings using propane or other fuels from hooking up faces opposition from some gas utilities, labor unions and business groups. Sen. Liz Krueger, who sponsors the measure, after a rally at which advocates chanted “HEAT Act now, Heastie,” said she’d like to get the whole measure in the budget but that passing it afterward was also an option given growing support in the Assembly. — Marie J. French TRUST FUND, GAS TAX TURNS PARTISAN — POLITICO’s Ry Rivard: Supporters of a plan to increase the New Jersey gas tax are trying to sell Republicans on the plan by pointing to a bipartisan deal to raise the tax eight years ago during Gov. Chris Christie’s administration. But unless something changes in the next several days, they may not be able to say the same thing again in the future. PA GOV PROPOSES RGGI ALTERNATIVE — POLITICO’s Jordan Wolman: Pennsylvania Gov. Josh Shapiro proposed a statewide cap-and-invest program on Wednesday to replace the controversial Regional Greenhouse Gas Initiative that has bedeviled Keystone State officials for five years. But the proposal already looks like a nonstarter in Harrisburg as lawmakers on both sides of the aisle have expressed their doubts about the governor's plan in the mere few hours since Shapiro announced the proposal in a speech in Scranton. LAWMAKERS OPEN TO TACKLE TRANSMISSION SITING — POLITICO’s Marie J. French: Assembly and Senate Democrats have accepted Gov. Kathy Hochul’s overture to reshape and accelerate the state’s siting of large-scale transmission lines, but they have some notes to add. Both the Assembly and Senate one-house budget proposals released Tuesday include the bulk of Hochul’s permitting changes. But they also both include additional protections for farmland, more public input on regulations and a host of other tweaks. BUS BOOST — State Sen. Michael Gianaris and Assemblymember Zohran Mamdani were pleased with the inclusion of fare-free buses in both the Senate and Assembly’s one-house budgets. Gianaris and Mamdani previously asked for $90 million for the MTA to increase bus frequency and for fare-free rides, which is the exact price point in the Senate’s one-house resolution. The existing free buses have already resulted in a 20 percent increase in ridership on the free routes. It’ll be up to lawmakers and Hochul to decide whether to include the measure in the final budget deal. “Today, both houses of the Legislature demonstrated their commitment to putting the MTA on the express track to deliver a better system for riders — and taking an evidence-based approach,” the lawmakers said in a shared statement. The duo is happy that an “evidence-based approach” is being taken. They cited a 17 percent increase in bus services in London before the congestion pricing program was launched, and that “the greatest city in the world deserves the same” as the city moves toward its own congestion pricing plan for parts of Manhattan. — Shawn Ness GAS TAX FAST TRACK: A bill to raise New Jersey’s gas tax to fund infrastructure projects appears likely to pass both chambers before the budget break after the plan advanced Monday out of the Senate Budget and Appropriations Committee on party lines. Some legislative obstacles seemed to melt away. Sen. John Burzichelli, a South Jersey Democrat who only a few weeks ago introduced a bill to reduce the gas tax by a third, voted in favor of the bill in committee to raise that same tax. Alluding to the reversal, Burzichelli said: “Serving in the Legislature is not supposed to be easy, this is important work.” “You can’t be in favor of transportation and transit if you don’t fund it,” he said. Republicans introduced an alternative package Monday meant to fund transportation projects without raising the gas tax. The plan was included in several pieces of legislation and not offered as amendments. The higher gas tax — about two cents more per year for five years — would shore up the state’s Transportation Trust Fund, which supports $2 billion a year in road and transit construction. Still, there could be amendments or separate action related to some of the concerns raised about a new fee for electric vehicles that is included in the gas tax bill. The bill’s $250-a-year EV fee — meant to make up for the fact that EV drivers don’t buy tax and so are spared the gas tax — is coming at the same time Gov. Phil Murphy is proposing a rollback of an EV sales tax but also trying to mandate all new cars sold in the state be zero emission vehicles, like EVs, by 2035. — Ry Rivard MORE MONEY, MORE PLANS: New York state is seeking federal funding through the Environmental Protection Agency’s “Climate Pollution Reduction Grants Program” for programs to support the state’s 2030 emissions reduction goals. There’s about $4.6 billion available, and New York is competing with 44 other states, plus several local governments. New York City, Buffalo, Rochester and the Capital Region have also made plans for the money. Applications are due April 1. New York’s plan, announced by the EPA on Monday, includes a proposal for grants to help municipalities electrify their medium- and heavy-duty fleets including snow plows, garbage trucks, street sweepers and more. “Providing initial funding for electric vehicles can help municipalities identify whether there are operational changes that they need to make to accommodate an electrified fleet before adopting a strong procurement policy,” the plan states. Other proposals include grants for electric and hydrogen-fueled public transit buses and infrastructure; support for local governments to undertake costly planning for “smart growth” development alongside projects to promote car shares, e-bikes or scooters, and cycling or walking; large-scale tree planting up to 1 million per year with federal funds by 2026; pre-qualifying contractors to finance energy efficiency upgrades of public buildings and providing grants for “resilient community facilities.” There’s also a pitch for more funding for recycling food scraps, projects to reduce methane emissions from landfills and sewage systems, There’s also a proposal of interest given DEC’s current regulatory effort targeting planet-warming refrigerants — support for small businesses to transition to low or zero greenhouse gas warming. “This measure would offer funding to a not-for-profit entity to administer a competitive grant program to install refrigeration systems that contain natural refrigerants for food retail stores, food banks, and food hubs located in disadvantaged communities,” the DEC plan states. “Projects would need to demonstrate financial need and a commitment to food security in the community.” Check out the New York state plan and local government proposals on EPA’s site. — Marie J. French NEW SLATE OF UTILITY REGULATORS: A major post-Cuomo reshaping of the state’s powerful utility regulator is underway. Gov. Kathy Hochul has nominated two women to the Public Service Commission, garnering praise from environmental advocates, and a third potential nominee is waiting in the wings. Hochul has sent the Senate nominations for Denise Sheehan, a former Department of Environmental Conservation Commissioner and current consultant for the state’s battery storage industry, and Uchenna Bright, a longtime environmental advocate and formerly with the Natural Resources Defense Council. “We hope that these positions enable the commission to make decisions that align with the [climate] scoping plan. … and understand that as a state we need to be hitting ambitious goals for our energy transition,” said Sonal Jessel, director of policy for WE ACT for Environmental Justice. The commission has vast authority and responsibility to hit the state’s renewable energy and zero-emission electricity targets, as well as a pivotal role in the transition of the gas system to reduce emissions. The PSC is managing a tightrope between growing short-term costs for the state’s transition off fossil fuels and the future climate and health benefits. The two nominees are well positioned to tackle this challenge, colleagues said. “Few people understand what happens at the Public Service Commission, and it's so foundational to everything that people care about, so having somebody who I think is both a good translator, but truly understands the complicated-ness of it — is valuable,” said Dale Bryk about Bright, who she worked with at NRDC. Bryk is currently a senior fellow with the Regional Plan Association. “She's truly a thoughtful, collaborative, strategic person,” said Julie Tighe, president and CEO of the New York League of Conservation Voters of Sheehan, who is on the Capital Region board of the organization. A potential third nominee that Jessel and others are backing is Radina Valova, currently the regulatory vice president for the Interstate Renewable Energy Council and formerly worked as senior staff attorney and regulatory affairs manager for the Pace Energy and Climate Center. “She is well trained in making the very critical decisions the PSC is going to be making in the next couple of years,” Jessel said. A spokesperson for the Senate Democrats said movement on the nominees was expected in the “next couple of weeks.” One of the commissioners whose term expired in February plans to depart in April, after this Thursday’s regular session. Diane Burman, who has been on the commission for more than a decade, announced her plans to depart last month. John Howard, a former Cuomo aide whose term also expired last month, has sought to be reappointed. — Marie J. French
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