NY’s Grid Operator Is About To Make Electricity Even More Expensive

REUTERS/Carlo Allegri

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Chris White Tech Reporter
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New York’s utility operator issued a set of carbon pricing draft recommendations Aug. 3 for a state that struggled to meet the energy needs of citizens during 2017’s brutal winter.

The New York Independent System Operator’s Integrating Public Policy Task Force issued recommendations that set the carbon price between the federal Social Cost of Carbon (SCC) and Regional Greenhouse Gas Initiative’s (RGGI) emissions allowances auction prices.

NYISO released a similar proposal in May for placing a per-ton charge on the carbon emissions of the state’s power plants. The charge would have been tacked on during emissions auctions already required through the state’s participation in the RGGI, a coalition of nine states that have enacted cap-and-trade systems.

The recommendations could impose a carbon price of $16-$18/MWh for natural gas generation and about $48-$54/MWh for coal-fired generation, according to an Aug. 6 press statement from ClearView Energy Partners, a research and investment firm that focuses on energy production. (RELATED: New York Wants Another Carbon Tax on Power Plants)

“We also estimate a total program cost of about $1.2 billion annually across all carbon-emitting resources in 2021, increasingly annually to about $1.4 billion in 2025,” ClearView’s press statement notes. NYISO’s proposal comes after East Coast states struggled to provide readily available energy to citizens during the 2017 winter.

New England’s energy grid strained to keep up with skyrocketing energy demand in December and January 2017 when arctic temperatures hammered the region. Boston received a shipment of natural gas from an export terminal owned by Novatek — one of the Russian energy giants sanctioned in 2014. Russian oil and gas shipments, however, aren’t covered by U.S. sanctions.

Massachusetts’s lack of pipeline infrastructure forced the state to rely on coal production during the cold snap, which caused energy prices to pitch upward. President Donald Trump appointed a top regulator in 2017 who suggested in January that the electric grid could have operated without coal so long as customers were willing to pay higher energy prices.

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