ENVIRONMENTAL MEASURE (BRIEFLY) LINKED TO CONGESTION FALLOUT: The possibility of environmental priorities being linked to a payroll tax to fund the MTA floated around the Capitol on Thursday. One person familiar with the discussion said Hochul offered to tie NY HEAT, a gas transition measure, to the tax. But Senate Democrats have rejected the idea of a payroll mobility tax hike — and they already passed NY HEAT earlier this session. “It’s not over until it's over,” said Assemblymember Pat Fahy. She said there have been three-way negotiations and acknowledged the bill as it currently exists will not pass. “There have been concerns about too much discretion for the Public Service Commission,” Fahy said. “We have worked to assure individuals that this would be a transition, it’s a slower process.” But time has essentially run out, with a three-day aging period required for any new version unless Hochul issues a message of necessity. Other environmental measures still potentially on the docket include the sweeping packaging reduction bill, which is expected to get a vote in the Senate. Proponents were slightly more concerned about the prospects in the Assembly, given the lengthy to-do list for the chamber and the longer debate period. A bill seeking to tamp down on fast fashion (A4333) was showing some signs of life, as was a bill to ban PFAS in menstrual products (A5990). A broader measure to restrict PFAS in consumer products — amended to drop cookware — seemed like a longer shot (A3556), as did a gas stove labeling measure (S9105). — Marie J. French AVANGRID RELIEF PLAN MOVES FORWARD: A bill (A10346) pushed by Avangrid, which is owned by Spanish energy company Iberdrola, looks set to squeak through. The “utility corporation securitization act” would allow Avangrid — the only utility with more than $500 million in costs for repairing systems after storms on the books — to petition the state’s Public Service Commission to issue bonds to recover those costs. Avangrid owns NYSEG and RG&E, which serve about 1.4 million electricity customers and more than 500,000 gas customers across New York. The utilities secured large rate hikes in October. “Securitization is a technical mechanism to resolve legacy debt for storm costs already paid for by utilities,” said Avangrid spokesperson Leo Rosales in a statement. Customers could see savings of more than $100 million. “We are pleased that securitization has strong support from over 20 business and economic development groups and labor, is moving forward as the financial health of our utilities is a vital piece of a healthy economy in New York.” The costs to pay for the bonds envisioned under the bill would be charged to ratepayers. The commission would only approve this mechanism if there’s a quantifiable benefit to consumers over traditional mechanisms of recovering the costs from ratepayers. “It’ll enable consumers to pay over time, for costs that are very expensive due to storms and aging infrastructure,” said Assemblymember Amy Paulin, who sponsors the measure. She said the measure is expected to pass before the session ends this week. The charge for the bonds would have to be a separate line item on customer bills. The measure specifies that the bonds are not public debt, preventing any taxpayer backstop for the costs. — Marie J. French CONGESTION PRICING FALLOUT: Environmental advocates who have backed congestion pricing because of its potential to reduce pollution from transportation and increase transit use were outraged by Hochul's abandonment of the hard-fought win. The governor announced an "indefinite pause” in a prerecorded video released Wednesday after POLITICO first reported on the decision late Tuesday. New York League of Conservation Voters president Julie Tighe said she was "shocked and dismayed" by the governor's decision. "We cannot drive our way out of the climate crisis — and we shouldn’t let a small number of drivers who refuse to take mass transit in the most transit-rich region of the country dictate transportation policy," Tighe said in a statement. Tighe, who has been an ally of the governor and is on the shortlist for Hochul's next Department of Environmental Conservation Commissioner, called on the governor to show courage and enact the fee on drivers. NY Renews, the Nature Conservancy and the Sierra Club also criticized the governor’s decision. “The Governor's decision jeopardizes New York's position as a national leader in fighting climate change,” said The Nature Conservancy’s Jess Ottney Mahar in a statement. For some environmental advocates, it's more evidence of Hochul's lack of credibility on climate issues. John Raskin, a former transit advocate and current head of the Spring Street Climate Fund that's pushing for a gas transition bill, slammed the governor in a statement. "Honestly, it’s embarrassing that Governor Hochul is touring Europe to talk about climate leadership while she’s actively tanking her own climate agenda at home," he said in a statement. Hochul said in her announcement that she’s done more to combat climate change and protect the environment “than any governor in our history.” “My commitment to a greener, more sustainable future is unwavering,” she said. “I'll continue working with our Legislature to make urgently needed investments, including a nation-leading cap and invest program that'll hold major polluters responsible for their carbon emissions and drive billions of dollars for clean energy.” The cap and invest program is expected to raise gas prices and home heating fuel bills for residents. Hochul officials have continued to say that draft regulations will be available for public comment “this summer,” which ends before the election. Hochul's focus on affordability as she guts a nation-leading environmental program is reminiscent of her administration pushing to weaken New York's climate law last year. As the potential cost of "cap and invest" to residents became clearer, Hochul proposed changing the law to make it less costly. Environmental groups and lawmakers rebelled, and the proposal was abandoned. Now, her administration is evaluating a weaker limit on emissions that — without significant additional policies — will see the state fail to achieve its goals. — Marie J. French PSC NOMINEE MOVED FORWARD: Senate Democrats moved forward with the confirmation of Radina Valova, who Hochul nominated to the powerful Public Service Commission in March. Valova’s confirmation was voted out of committees on Wednesday evening after some discussion from lawmakers about the challenges facing the commission to balance affordability and reliability — and the state’s climate goals. “It’s almost a fool’s errand,” said Democratic Sen. John Liu of the PSC’s mission to ensure both reliability and affordability. Valova is regulatory vice president for the Interstate Renewable Energy Council and formerly worked as a senior staff attorney and regulatory affairs manager for the Pace Energy and Climate Center. “This would be a dream come true. This has been my passion for the last 10 years,” Valova said. “The energy system exists to serve us, the energy customer.” Sen. Michelle Hinchey, a Democrat, asked Valova if utilities under investigation for billing failures should see a rate hike approved, in a barely veiled reference to Central Hudson. Valova, noting she could only speak generally, said it is the commission’s role to hold utilities accountable. In response to questions from Republican Sen. Mario Mattera, Valova said she believes the state’s climate law targets are achievable and can be accomplished affordably. “It's challenging, it's one of the central challenges of our time,” she said. The confirmation completes Hochul’s transformation of the utility regulator as Valova joins Uchenna Bright and Denise Sheehan on the commission. Valova’s six-year term would end in 2030, a major milestone for the state’s climate law targets. — Marie J. French NY HEAT RUMBLINGS: A new version of a measure to address the future of the state’s natural gas system has been circulating, according to multiple sources. But a final deal had not been struck on the issue as of last Monday afternoon. Assemblymember Pat Fahy, the sponsor of the bill in the Assembly, said she’s still optimistic about making progress. Other Assembly sources said there’s continued pressure to take action on the issue from advocates and members vulnerable to primary challenges. — Marie J. French OFFSHORE WIND TRANSMISSION DEADLINE EXTENDED: The New York Independent System Operator has given an extension to developers who want to propose multibillion dollar solutions to integrate nearly 5 gigawatts of offshore wind into New York City. The NYISO delayed the deadline to June 17. Previously, bids were due today. This is a key process that regulators think would lower the costs of the state’s offshore wind targets. Hooking up individual offshore wind projects in New York City could prove increasingly challenging as the aging grid requires more upgrades and spots to plug in are limited. NYSERDA is also closely watching the progress of NYISO’s process and trying to align its offshore wind solicitations to maximize benefits to New York ratepayers. “We had theorized there would be a point in time — actually later this year – in which we could run an RFP to predictively be far enough along in the [NYISO’s transmission process] that the two could dovetail,” said NYSERDA president and CEO Doreen Harris last week. She said the current question for the authority is whether it does an RFP for offshore wind preceding that more aligned solicitation. “The reasons for that may be of course to continue our progress,” Harris said. “To use the learnings from the accelerated RFP … to run an RFP that’s efficient and I’d say quick with the turnaround.” NYSERDA did ask if it should limit projects plugging in to the New York City grid as part of seeking developer input on upcoming offshore wind solicitations. Harris said that was a “major” area of feedback from the industry. — Marie J. French PLASTIC REDUCTION DEAL — POLITICO’s Marie J. French: Lawmakers agreed on a sweeping measure to reduce the amount of plastic and packaging headed to landfills by 30 percent over 12 years. The new version of the bill was filed late last Monday night, giving supporters of the effort hopes for a vote before the state legislative session ends this week. A leading proponent for plastic reduction endorsed this version, as did Sen. Pete Harckham, who chairs the Environmental Conservation Committee and said he expects a floor vote this week. “A 30 percent reduction in 12 years in packaging waste is substantial — it'll still be the strongest law in the country,” Harckham told POLITICO on Tuesday. The measure would require makers and distributors of consumer goods — from potato chips to laundry detergent — to reduce the amount of packaging they use and pay fees set by a producer-run group to assist with the disposal of the remaining waste. It’s been a multi-year effort by some Democratic lawmakers and environmental groups to pass some form of “extended producer responsibility” legislation. The state’s climate plan supports taking this step as well. — OOPS: Harckham and Assemblymember Deborah Glick both told POLITICO that there’s an error in the latest print. They said the “loophole” allowing the Department of Environmental Conservation to weaken the targeted reduction from 30 percent to as low as 10 percent wasn’t supposed to be included. Glick called it a “drafting error.” Both sponsors said they still expected a vote on the measure this week, but time is running short. — The opposition from business groups and industry to the latest version continued to roll on Tuesday. “The bill will still result in problematic consequences for consumers like everyday concerns about increased grocery prices and being able to get in demand products that are no longer available on store shelves,” one opposition memo stated. “Consumers will face higher costs and will have limited choices as manufacturers discontinue products.” Glick was unmoved. “You make reasonable accommodations, understanding that no matter what you do, there is going to be a core of people — industry — that is opposed. Plastic is bad,” she said. “Every change upsets people but in the end, I believe we’re not doing this to be punitive. We’re doing this so there is a shared obligation and responsibility to get rid of the waste.” The Business Council of New York State also continues to oppose the measure. Ken Pokalsky, vice president of the group, said the 30 percent target was still “arbitrary.” “It’s not based on any real assessment of what’s doable,” he said. The Consumer Brands Association, which represents Kraft Heinz, Keurig Dr. Pepper, Procter & Gamble and more, also opposes it. The group’s vice president of packaging and sustainability warned consumers will “lose access to the food sold in flexible or convenient packaging, which includes many household staples under SNAP.” Kraft Heinz, which employs 1,000 people at plants in Lowville and Avon, has been raising concerns about the bill eliminating certain products from New York markets. The earlier proposed 50 percent reduction would “require drastic measures,” a memo with pictures of Jell-O cups, cream cheese blocks, Kraft American cheese (single slice), Capri-Sun pouches and Lunchables warned. The measure has a lengthier lookback period (12 years) compared to the previous version (5 years), so companies that have made reductions can seek recognition for those efforts. It also allows companies to hit the required packaging reductions across their entire suite of products. “If you want to account for the crappy plastic film on Lunchables, Kraft has plenty of room in its requirement to continue to produce that,” Glick said. “I remember food before plastic. We ate and we ate well.” — Marie J. French BOTTLE BILL BURIED — POLITICO’s Marie J. French: An expansion to include more beverages and an increase to the 5-cent bottle deposit in New York won’t happen this session after intense opposition from the bottling industry and labor unions. “It’s dead, I’m sad to say,” Assemblymember Deborah Glick, chair of the Environmental Conservation Committee and sponsor of the measure, told POLITICO on Tuesday. Supporters pushing the expansion have said it would increase the recycling rate of containers and reduce the amount of waste destined for landfills. The measure was also a priority for redemption centers, which have seen costs rise as the handling fee has remained stagnant. OFFSHORE WIND CONTRACTS FINALIZED — POLITICO’s Marie J. French: New York finalized deals with its first two statewide-funded offshore wind projects — at a higher cost to consumers than the original agreements. The final contracts, released Tuesday, clear the way for construction on the projects off the coast of Long Island. It’s a hopeful step for an industry that’s been battered by rising costs that have led to canceled deals and delayed progress. As a resource that can plug into the downstate electricity grid, offshore wind is integral to New York's ambitious renewable energy and emissions reduction goals.
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