Climate change measures dropped from NYS budget amid heavy lobbying

ALBANY — Environmental groups and some legislators said they are trying to revive measures that would have advanced New York State's march against global warming, but were dropped in the state budget agreement passed Saturday.

The issue drew some of the fiercest lobbying of the year. The proposals pitted a coalition of 400 environmental and public health advocates against petroleum companies and the influential unions that represent their workers.

Ultimately, Gov. Kathy Hochul and leaders of the Assembly and Senate failed to agree on the New York Home Energy Affordable Transition Act, commonly called the HEAT Act, and the Climate Change Superfund Act, both of which were deleted from the spending plan after weeks of negotiations. 

The HEAT Act would have shifted some of the billions of dollars in costs away from ratepayers to gas and oil companies as New York moves from a fossil fuel economy. The companion Climate Change Superfund Act would have required fossil fuel companies to pay for the cost of resiliency measures — now paid by taxpayers — against severe storms blamed on global warming.

Now, supporters are going to try to get legislative approval for the measures in the remainder of the session, which is scheduled to end June 6.

Supporters said the measures are needed for the state comply with the 2019 Climate Leadership and Community Protection Act. Under that law, utilities and energy companies will have to convert to renewable energies to continue to operate in New York State. The law requires New York to get 70% of its energy from renewable sources by 2030 and to reduce greenhouse gas emissions by 85% by 2050.

A key provision of the HEAT Act would have ended the 43-year-old “100-foot rule,” under which natural gas companies automatically connect new customers at no charge. The cost of more than $200 million a year is spread among all ratepayers. The rule, which will now continue, expands the use of natural gas, which is contrary to the goals of the Climate Act.

“Current law encourages owners to use natural gas by requiring the gas companies to provide free hookups if the building is within 100 feet of an existing line,” said Michael B. Gerrard, founder and director of the Sabin Center for Climate Change Law at Columbia Law School. “By taking away that rule, the NY HEAT Act would have helped level the playing field.”

Environmental groups and supportive legislators said the conflict between the goals of the Climate Act and the 100-foot rule was expected to be rectified in the proposed New York HEAT Act. 

“We missed significant opportunities to address the climate crisis and rising utility bills amid an affordability crisis,” said Assemb. Patricia Fahy (D-Albany), a prime sponsor of the bill along with Senate Finance Committee chairwoman Liz Krueger (D-Manhattan). “For the first time in recent memory, we failed to address the transcendent threat of our time: Climate change … in a year defined as the hottest on record ever.”

By not passing the HEAT Act, “New Yorkers will continue to subsidize the costly build-out of gas infrastructure across the state amid a climate crisis,” Fahy said. She said she will resume the fight in the remaining post-budget legislative session.

The oil and gas industry and the AFL-CIO labor organization that represents its workers lobbied against the bill. They called for slowing the state’s climate change transition away from gas and oil, warning that the switch will be costly to New Yorkers and arguing that petroleum is a more reliable source of energy.

“Hopefully, this is a sign that we are turning a corner in terms of how we approach energy policy in New York,” said Daniel Ortega, executive director of New Yorkers for Affordable Energy. The group is a lobbyist and a tax-exempt corporation whose “mission is to extend natural gas service,” according to its tax return filed with the Internal Revenue Service.

Ortega said state energy policy shouldn’t be “based on the whims of activists and their supporters … [and] slogans and protest signs,” but by “serious discussion, debate and planning.”

Both climate change measures were also opposed by National Fuel Gas Co. of Buffalo. The company spent more than $184,000 on lobbying the governor, Assembly and Senate in the last year against the HEAT Act and Superfund proposal, according to state lobbying records. The company’s political action committee contributed $23,450 since 2022 to local and state campaigns going into this year’s legislative elections.

National Fuel Gas spokeswoman Karen L. Merkel declined to comment until the budget is signed into law by Hochul. Merkel is listed as a director for New Yorkers for Affordable Energy on the group’s tax return.

Assemb. Phil Palmesano (R-Corning), a critic of both proposals, issued a statement Monday.

Families “face higher energy costs and the continued implementation of a radical energy/climate plan that seeks to dismantle the affordable and reliable natural gas infrastructure, supply and delivery system and eliminate consumer choice on how you heat your home, cook your food, power your buildings and the vehicle you drive,” Palmesano said. He received $1,500 in campaign donations from the National Fuel PAC in 2022 and 2023.

The Senate’s Democratic majority supported the measures, while Hochul supported a reduced version of the HEAT Act. The Assembly’s Democratic majority didn’t back the measures in the budget despite the support of many rank-and-file members.

Hochul spokeswoman Katy Zielinski declined to comment on the Heat Act or Superfund proposal. Zielinski said Hochul supported other measures in the budget to support clean energy and “understands that we are the first generation to feel the effects of climate change and the last generation that can do anything about it.”

Assembly Democratic majority spokesman Michael Whyland also wouldn’t comment on the HEAT Act or Superfund proposal. But he said, “The Assembly majority has a long history when it comes to protecting the environment, and we will continue to discuss ways to combat climate change with our members.”

“Based their on their actions, they do not believe we are in a climate emergency and are not committed to the 2019 climate act,” said Anne Rabe of the Climate Superfund Campaign of 400 environmental and public health advocacy groups that lobbied for the Heat Act and Superfund. 

She also said the groups will resume pressure on Hochul and the Assembly to pass the measures in the post-budget session.

“It’s going to be a really hot summer for the governor and the Assembly,” Rabe said.