With its 2019 Climate Leadership and Community Protection Act (Climate Act) New York has ambitious goals to completely rewire its energy grid, shifting away from generating electricity with natural gas (46%) and towards renewable energy sources. The state aims to achieve 70% renewable electricity by 2030 and a zero-emission electric grid by 2040. This involves significant investments in wind, solar, and other renewable energy projects. As of 2023, renewable energy sources accounted for approximately 35% of New York’s electricity generation.

The All-Electrification Act is a step in this direction. Starting in 2026, most new construction of buildings that are seven stories or shorter must use electric heat and appliances. This requirement extends to larger commercial buildings with 100,000 square feet or more of conditioned floor area. By 2029, taller residential buildings and smaller commercial buildings will also need to comply.

At What Cost?

But the July 2024 audit, “Climate Act Goals – Planning, Procurement, and Progress Tracking” by the Public Service Commission New York State Energy Research and Development Authority, said the following about the Climate Act:

“The costs of transitioning to renewable energy are not known, nor have they been reasonably estimated. Moreover, funding sources to cover those costs have not been identified, leaving the ratepayers as the primary source of funding. The lack of alternative funding sources adds additional risk to whether the State can meet its goal timely. Data shows utility costs have already risen sharply over the last two decades and more New Yorkers are having difficulty paying their utility bills.”

Recently, Con Edison has recently proposed a double-digit rate increase for electricity and natural gas starting January 1, 2026. The utility is seeking an 11.4% increase in electric bills and a 13.3% increase in gas bills. The additional revenue, estimated at $1.6 billion for electricity and $440 million for gas, will fund infrastructure upgrades and investments in clean energy to meet rising demand and enhance grid reliability. 

There are no estimates for how many more rate increases will be required to pay for the Climate Act.

Energy Poverty is Real

This is particularly important in a state where 46% of households are struggling, either below the federal poverty line (15%) or, as The United Way defines it, Asset Limited, Income Constrained, Employed (31%). This term by The United Way, ALICE, represents people who often make too much to qualify for federal or state aid programs, but will be especially hard hit by rising energy rates.

Will There be Enough?

And as we enter the age of Artificial Intelligence (AI), one of the big questions is how will we power it all? An AI-powered search takes up to 10 times more energy to execute than a traditional Google Search. And single AI data center can require up to 1 Gigawatt (GW) of power, the equivalent of nearly 300,000 homes. 

Like other states, New York is actively seeking to attract artificial intelligence (AI) initiatives. Governor Kathy Hochul launched the Empire AI Consortium as part of the FY 2025 Budget. This consortium aims to make New York a global leader in AI research and development. It includes a $275 million investment to create a state-of-the-art AI computing center at the University at Buffalo.

Already, energy experts are wondering if there will be enough energy in the future.

“Electrification programs and economic development initiatives are driving projected demand higher. Generator deactivations are outpacing new supply additions. Together, these forces are narrowing reliability margins across New York.”

• “2024 Power Trends: The New York ISO Annual Grid and Markets Report”

Unanswered Questions

As New York forges ahead with the Climate Act, many questions remain unanswered. How much will it cost? Will there be enough? Will it be reliable? Getting these answers right will be critical to the future of the state.

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