Why New York must protect energy stability to grow our economyHeather Mulligan |
As New Yorkers continue to struggle with a stubbornly high cost of living that shows no signs of abating, Gov. Kathy Hochul and the Legislature are right to keep affordability at the center of their state budget negotiations.
Addressing the pressures facing families and businesses is critical, and doing so requires a clear-eyed understanding of what’s driving costs and how to lower them sustainably. It’s why the Business Council of New York State recently launched a new online resource tracking the affordability impact of New York State legislation, providing greater transparency into how policy decisions translate into real costs for households and employers. And it’s through that visibility that we see how some current budget proposals risk moving New York in the wrong direction on energy affordability.
At a time when households and employers are already strained, several proposals affecting utility service would actually undermine the very regulatory framework that has helped keep New York’s energy system safe, reliable and investable. That framework, often referred to as the regulatory compact, has long provided long-term financial stability for customers and the certainty needed to attract investment into the businesses and critical infrastructure that power our economy.
New York’s utilities already operate under one of the most comprehensive regulatory systems in the country. The Public Service Commission, or PSC, rigorously reviews and approves every rate proposal, scrutinizes investments, and rightly holds utilities accountable for safety, reliability and service quality. This strict oversight process — including challenging and justifying every dollar requested under rate proposals — is designed to balance customer protections with the need to ensure utilities can access capital at reasonable cost.
Proposals that would allow the PSC to adjust return on equity outside of established rate cases would disrupt that balance, and have a direct negative impact on the finances of households and businesses statewide.
For utilities, which rely on long-term financing to build and maintain critical infrastructure, predictability is essential. When that predictability is weakened, borrowing costs increase. And those higher costs ultimately flow through to customers’ wallets; the very outcome policymakers are trying to avoid.
New York needs reliable, affordable energy to grow
This is not just a concern for the energy sector. It is a direct concern for New York’s broader business community.
Reliable, affordable energy is a prerequisite for economic growth. Manufacturers, small businesses and large employers alike depend on consistent, firm energy to operate, expand and create jobs. When energy costs become less predictable, or when investment in infrastructure slows due to an unstable regulatory environment, it introduces risk that can deter new investment and hinder competitiveness.
New York is at a pivotal moment. The state is working to attract advanced manufacturing, support electrification and grow key industries. All of these goals depend on an energy system that can deliver at scale, reliably, and at a cost businesses can plan around.
Undermining the conditions that support investment in that system makes those broader economic goals harder to achieve.
If affordability is the goal, the focus should be on preserving the stability that keeps financing costs down and projects moving forward efficiently. A predictable regulatory environment enables utilities to access capital on favorable terms, which in turn supports lower long-term costs for customers.
New Yorkers deserve an energy system that supports both their household budgets and the state’s economic future. That requires policies that recognize the link between regulatory stability, investment and affordability, and that avoid unintended consequences that could make today’s challenges even more difficult to solve.
Heather Mulligan is the president and CEO of The Business Council of New York State, Inc.