Lawmakers working on repeal of new ‘Cuomo tax’
ALBANY, N.Y. » As legislators near the finish line for the 2017 session, it is still not clear if a repeal of a new tax on utility ratepayers will be among their accomplishments.
Opponents say a Public Service Commission surcharge on utility customer bills totals an estimated $7.8 billion over more than a decade, with the money going to subsidize the operations of financially failing nuclear power plants owned by the Exelon Corp. along Lake Ontario.
At Gov. Andrew Cuomo’s behest, the Public Service Commission approved the surcharge in August as part his renewable energy program. But critics say it is nothing more than a corporate giveaway to protect 2,000 jobs at the three aging plants which otherwise would likely be decommissioned.
“It seems like the tail wagging the dog was the impact of jobs in the plant
and the incentive for Exelon to keep those plants open,” said Blair Horner of NYPIRG, one the groups behind the Stop the Cuomo Tax campaign. “It really wasn’t about the impact on the rate-payers.”
“It’s clear that both houses (of the Legislature) are unhappy with the deal,” he said. “Whether or not they can come up with a concerted effort to change it, we really don’t know yet.”
Estimates of what NYPIRG and other opponents call the “Cuomo tax” runs from $7.6 billion to more than $10 billion over the next 12 years. The Cuomo administration says the cost amounts to about $2 per month for the typical utility customer.
“Cuomo directed the New York Public Service Commission to insert billions in subsidies for failing nuclear power plants into New York’s ‘Clean Energy Standard,’” the Stop the Cuomo Tax campaign says on its website. “The upstate nuclear plants FitzPatrick, Ginna and Nine Mile Point are among the oldest operating nuclear plants in
the US.”
Cuomo has made it clear saving jobs upstate is as important as pursuing energy goals. “The agreement to continue operation of the plant will save approximately 600 high-skilled, well-paying jobs, further the plant’s contribution of $500 million per year in regional economic activity, and avoid three million tons of carbon emissions annually – representing about 10 percent of the state’s carbon savings,” Cuomo said last August when announcing Exelon’s purchase of the FitzPatrick plant.
In Geneva on Friday, Cuomo touted his efforts to help the upstate economy. “Upstate New York was overlooked for decades before my administration took over,” Cuomo told reporters. “All the focus was on downstate NY ... I’ve invested more in upstate New York than any governor in recorded history, over $30 billion.”
But opponents are unmoved by the argument that keeping nuclear plants open provides economic benefits.
“Unless the decision is reversed, electricity customers will be paying these surcharges on their bills for the next 12 years— from 2017 to 2029,” the group says. “The
surcharges have nothing to do with funding ‘clean’ energy. They are more like a new tax the Governor has imposed, forcing consumers to pay above-market rates to prop up aging, uncompetitive nuclear plants, whether they want to or not.”
The plants primarily generate electricity for the economically declining upstate region. But most of the cost of the subsidies will be shouldered by downstate ratepayers. The plants are candidates for closing without some kind of subsidies due to the shift to lower cost fracked natural gas for power plants and the proliferation of solar and wind power facilities.
The Senate passed its version of the bill on Thursday, eliminating the billing surcharges in favor a new program set up and funded by NYSERDA. The money would come from other existing programs funding by the energy agency, whose funds now are primarily generated by subsidies paid by utility ratepayers.
The Assembly also has bills pending to rollback the surcharges. One would link the amount of the surcharges to the regional benefits, to overturn the current system of having downstate users pay the lions’s share.
Another bill would cap at 25 cents per month the amount of the subsidies that could be passed along to ratepayers.
Adding to the intrigue surrounding the subsidies, the money to prop up the upstate plants is flowing at the same time the state is moving ahead with plans to decommission a fourth aging plant, the Indian Point power station north of New York City.
Cuomo has made closing the plant a priority because of its proximity to New York City. It is one of five commercial nuclear reactors in New York, counting the Shoreham plant on Long Island closed by Cuomo’s father, former Gov. Mario Cuomo, before it became fully operational.
The governor has set a goal of having 50 percent of the state’s electricity generated by renewable sources by 2030.
While environmental groups laud the goal, business groups say it will only increase New York’s already sky-high utility prices.