CORRECTION: Last Monday’s newsletter misspelled the name of Robert Freudenberg of the Regional Plan Association.
CLEAN TRUCK BRAKES — POLITICO’s Marie J. French: Upstate Democratic lawmakers want to delay a key policy supporting the state’s efforts to reduce emissions from the transportation sector. Assemblymember Donna Lupardo, a Binghamton Democrat, and Sen. Jeremy Cooney, a Democrat from Rochester, introduced a bill to hold up the state’s Advanced Clean Trucks rule until 2027. The rule requires manufacturers sell a higher percentage of electric trucks starting this year. THE PUSH FOR NEW GENERATION: There is mounting pressure on New Jersey to encourage the development of new power plants, including gas-fired power plants. The push began shortly after the state Board of Public Utilities announced residents are in for a $25 a month rate hike this summer, which is already causing elected officials to worry they’ll be tarred and feathered by angry constituents. The price increase is driven by a variety of factors but it largely boils down to energy supplies in the state and across the region failing to keep pace with demand. The day those hikes were announced last month, Assemblymember Wayne DeAngelo, the chair of the Assembly Telecommunications and Utilities Committee, said the state needs more generation “ASAP.” In the weeks since, that thought has gained support among lawmakers and the state’s largest utility. Earlier this week, Sen. John Burzichelli, a South Jersey Democrat, wondered if the state should order utilities to reenter the generation market two decades after the state deregulated utilities. At the same hearing on energy demand, a PSE&G representative said the state should consider rate-based generation or a targeted request for proposal to get new generation online quickly because the state is facing “a serious situation.” None of those comments suggest what kind of power the state needs, but the New Jersey Business and Industry Association, whose members include major utilities and energy users, urged the state to build more in-state natural gas-fired power plants. That comes following the collapse of the state’s offshore wind industry, which Gov. Phil Murphy was counting on to provide power to millions of homes. While the state’s medium-term energy plans have always relied on natural gas, building more gas plants would largely run contrary to Murphy’s clean energy goals, as well as the state’s landmark environmental justice law, which discourages the building of new fossil fuel power plants. “We simply cannot push all-electrification policies that drive up the use of electricity while simultaneously continuing to adopt policies that shut down generation of clean natural gas and discourage the development of clean natural gas facilities,” the association’s lobbyist, Ray Cantor, said in a statement. “New Jersey needs to reverse course immediately not only to avoid future pain from our energy bills, but also to meet the growing energy demands that will come with more data centers and other technologies.” — Ry Rivard RENEWABLE TAX WRENCH — POLITICO’s Marie J. French: A court ruling invalidating the state’s property tax assessment calculation for renewable energy could upend wind and solar development in New York. According to a decision issued by Judge Joshua Farrell in Albany County Supreme Court, state lawmakers failed to provide enough direction to Gov. Kathy Hochul’s tax agency on how to value wind and solar for tax assessment purposes under the 2023 state budget. EMISSIONS REPORTING REG PRIORITIZED: New DEC chief Amanda Lefton is wasting no time mapping out her priorities. Lefton began at the agency in an acting role on Monday. She listed three priorities including releasing the delayed, already written emissions reporting requirements that are part of the “cap and invest” program that Gov. Kathy Hochul punted on in her State of the State agenda. Lefton wrote that the reporting regulations would be released “this month.” It’s an early — and easy — win for Lefton, since the regulations had already been drafted and were unexpectedly put on hold by Hochul, according to emails reviewed by POLITICO. Environmental advocates have been pushing for the release of the full suite of regulations to implement the revenue-raising program, including by launching a coalition and pressuring lawmakers to use their budget leverage. Stephan Edel, NY Renews executive director, said the coalition looks forward to reviewing the rule but wants to see release of the full suite of regulations to implement the program. "It’s time to get New York’s polluter pays program up and running and generate upwards of $3 billion to fund the transition toward a clean, green economy that benefits working people across the state,” he said in a statement. “There's no more time for delays. We’ll mark our calendars." Lefton also listed helping communities with resilience and restoration as a major priority. She said DEC would increase its work with local, state and federal partners to reduce flooding risks, especially by leveraging the “effective delivery” of funding from the $4.2 billion environmental bond act. Her third priority was on open space and clean water. DEC will focus on “expanding investments in clean water infrastructure, promoting sustainable land management practices, and fostering community-driven conservation initiatives,” Lefton wrote. — Marie J. French TARIFF CHAOS: It’s still not clear if tariffs on Canadian imports imposed by President Donald Trump apply to electricity flowing into New York. The state’s independent grid operator was still seeking clarity from federal officials and was not collecting any tariffs on Tuesday afternoon. “The U.S. and Canada have one of the most integrated electric grids in the world, allowing system operators in both countries to pool resources for improved reliability and economic efficiency,” said New York Independent System Operator spokesperson Kevin Lanahan in a statement. “We are in close and regular contact with Hydro Quebec and Ontario’s Independent Electricity System Operator. The NYISO anticipates having adequate supplies to meet expected demand on the system.” Energy prices are expected to rise — New York households also rely on natural gas and heating oil from Canada — and the risk of a trade war and retaliatory tariffs looms large. Ontario Premier Doug Ford said he’d impose 25 percent tariffs on electricity exported to the U.S. including to New York. While most of New York’s Canadian electricity imports come from Quebec, that could still put upward pressure on utility costs. New York Gov. Kathy Hochul raised concerns about the impact of tariffs on agricultural exports, as well as higher costs for farmers for fertilizer and wood chips, which are imported from Canada. She met with agricultural leaders in Albany last week before speaking with reporters. The New York Democrat warned of higher costs for consumers and put the blame squarely on Trump (despite barely mentioning him by name) and Republicans in Congress. "Elections have consequences," Hochul said. "This is one of the dire consequences of the election this past November. I cannot change what's coming out of the White House. All I can do is try to fortify my state against the impacts." Hochul downplayed concerns about Ontario's plans before Ford made his announcement. She said she's built a good relationship with the premier. "He said he would not hurt New York," Hochul said. "We will not have a target on our backs from Canada, because we have positive relationships." — Marie J. French AI DEMAND, RATE WORRY — POLITICO’s Ry Rivard: New Jersey lawmakers are bracing for skyrocketing electricity prices to fuel voter outrage this summer. Utility bills are set to increase by about $25 a month in June, thanks to a power supply crunch within New Jersey and across a 13-state power market that the state relies on. SECOND CLIMATE SUPERFUND LAWSUIT: Business groups, including the American Petroleum Institute and the Business Council of New York State Inc., have filed an expected legal challenge to New York’s “climate superfund” law. The measure seeks to charge fossil fuel companies for historic sales of oil and gas on the basis that global emissions from burning those fuels contributed to climate change that caused damage to New York. The lawsuit filed in federal court in Manhattan on Friday argues the law violates federal statutes and is unconstitutional. “We strongly opposed this bill when the legislature was considering it, and when it was being reviewed by the Governor, raising practical, policy and legal concerns,” said Ken Pokalsky, vice president of The Business Council of New York State in a statement. “Now, those legal concerns will be reviewed by the courts. We’ve always argued that this is bad policy for New York, and we intend to seek reversal through all available avenues.” Assemblymember Jeff Dinowitz, who championed the law in the Assembly, said it wasn’t surprising to see a legal challenge. “New York has led the fight against climate change, and we will not be intimidated by corporate lawsuits designed to derail progress,” he said. “I stand firmly with Governor Hochul in defending this legislation in court and ensuring that polluters — not taxpayers — pay for the harm they have caused." It’s the second lawsuit challenging New York’s climate funding law after Republican attorneys general and trade groups filed suit earlier this year. — Marie J. French STATE ENERGY PLAN SCOPED: Federal uncertainty looms large over analysis for a long overdue state energy plan, New York officials emphasized last week. The State Energy Planning Board, mainly composed of representatives from Gov. Kathy Hochul’s administration, approved a final scope of the plan — a draft of the plan for public comment is expected later this year. One of the initial steps is a variety of modeling to provide some underlying economic and technical analysis, similar to the extensive efforts for the state’s climate plan. NYSERDA’s Nicholas Patane said the authority was monitoring the rapidly evolving federal landscape but would have to “press go” on a baseline case incorporating federal actions at some point. With the Trump administration and Republican Congress advancing efforts to gut federal climate policies and clean energy incentives, New York faces a far more challenging path toward its emissions reduction targets. NYSERDA president and CEO Doreen Harris noted it's a very different environment from when the state finalized the climate plan, when passage of the Inflation Reduction Act was expected to lower the costs of achieving the state’s goals. At the beginning of the meeting, Harris sought to put a somewhat positive spin on the Trump administration’s policies. She said that newly minted Department of Energy Secretary Chris Wright, a former gas executive, “asserted priority areas of focus that aligned well with our work here in New York, including technology innovation, affordability, strengthening the grid, streamlining permitting and importantly advancing demonstration of new advanced nuclear energy technologies.” Nuclear is a particular focus for Hochul, who has sought to elevate the technology over the past several months and prioritized it in her State of the State. Hochul officials see nuclear as a potential solution to the large gap between renewables and forecast electric demand to meet the 2040 “zero emissions” electricity target. NYSERDA has still not released “techno-economic” analyses of nuclear and other “zero emissions” technologies. Those are expected to be filed with the Department of Public Service as part of an ongoing proceeding to define the term and identify potential policies to support development of new resources. — Marie J. French | 
