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Brian Lehrer: Brian Lehrer on WNYC. Now, our climate story of the week, which we do every Tuesday on the show. This week, the New York State HEAT Act now being debated in the state legislature. It would cap utility bills for some New Yorkers based on income, while also providing incentives for utility companies to switch to renewable fuels.

The state Senate has passed it. The assembly, interestingly, is hesitant. Now, of course, they're both controlled super-majority by Democrats so why the difference? We'll cover the science and the politics now, as well as the economics. Joining us is State Senator Liz Krueger from Manhattan's East Side, sponsor of the HEAT Act. Senator, thanks for joining us for this. Welcome back to WNYC.

Liz Krueger: Thank you, Brian. Thanks for having me on to talk about this.

Brian Lehrer: You want to do the acronym first? HEAT stands for?

Liz Krueger: Home Energy Assistance Program.

Brian Lehrer: I have it here as the Home Energy Affordable Transition Act. HEAT, the Home Energy-

Liz Krueger: Excuse me. Yes.

Brian Lehrer: -Affordable Transition Act. I know once you introduce it and then you say HEAT Act a billion times--

Liz Krueger: We're still used to saying New York HEAT. Exactly. I Apologize. That's a much better title because this is about the importance of a safe and reliable utility system moving forward that is in fact more affordable for everyone.

Brian Lehrer: Let's get wonky right off the bat and define two terms that I see are relevant here that relate to natural gas hookups, something called the 100-Foot Rule and something called obligation to serve. That's how The Times started its article on this bill. What's the 100-Foot Rule?

Liz Krueger: The 100-Foot Rule is that you would no longer have to connect the last 100 feet from an existing gas line to new buildings being built. Which costs a significant amount of money that currently is transferred to all ratepayers at about $200 million a year. When in fact we have passed other laws, the CLCPA and other laws that make explicit that we're not going to use gas for new buildings.

Where we passed our all electric laws for the city of New York first and the state of New York coming in a year later. If we are not going to allow gas connections with exceptions for any new construction, why would we still need to pay, we being you and me and all ratepayers, to connect those buildings to the gas system through the last 100 feet? Saves us money.

Brian Lehrer: That's an interesting apparently archaic rule now and a subsidy to the gas companies. You're saying even if a new home is going to run without gas, going to run all-electric, it's constructed that way that currently they still have to hook up a gas line.

Liz Krueger: Right. Which is ridiculous, right?

Brian Lehrer: It's ridiculous when you put it that way. Sounds ridiculous. Then the other part of that, something called obligation to serve, is that just the same thing in other words.

Liz Krueger: That's the same thing but much bigger because under existing law, the Public Service Commission, even though it's contrary to the other laws we pass, the Public Service Commission must still instruct utilities to expand the gas pipe system, and repair the gas pipe system as a matter of law. Yet we know, and we have already passed other laws saying, we don't want to be on gas.

We don't want to continue to repair a very old and leaky gas pipe system to the tune of between $3 million and $6 million per mile when we're not intending to use it anymore. Not just not intending to, we've passed laws that say, we are getting off gas, so why would we continue to make an obligation to upgrade and repair leaky old gas pipes and then additional gas pipes to a system that we have said, "No, we're not going to be using it. That's not where our future lies in electricity and in utilities."

Most of the utility companies actually have already agreed that that is not the path forward. Not all of them, but a decent number of them have. They recognize that under both state law, international treaties, and science, we have to stop using gas going through pipes in the ground so why would we have a state law that still requires utility companies to continue to lay pipes in the ground for gas and repair the existing system?

The full estimate is to replace our existing gas utility pipe system would cost $150 billion over the next couple of decades. Why would we use that money that way when we can use that money for green transition to improved and cheaper opportunities that don't destroy the planet?

Brian Lehrer: This transition will cost, also and we'll get to that, but I want to cite what some of the opponents of the HEAT Act are saying. Again, this comes from the recent New York Times article on this by Hillary Howard reporting from Albany. Here are two apparently different camps who she cites as opponents. One obvious quote from Randy Rucinski, Chief Regulatory Council for the National Fuel Gas Distribution Corporation, which provides energy in Western New York. That's a utility that I guess doesn't want its hands tied.

That person says, "If you remove service to a neighborhood, you're inevitably going to impact service in surrounding areas because it's an interconnected energy system." Then she also quotes the president of the New York State, AFL-CIO who says, "Alternative energy should be readily available and affordable across the state before proposals like the New York HEAT Act are considered."

We've got two concerns there, one is, it's not necessarily affordable yet to switch over to renewables for everybody and the other one having to do with the interconnectedness of everything if you impact service in one neighborhood, you're going to impact service in surrounding areas. You want to take on each of those?

Liz Krueger: Sure. Thank you. The first concern raised by the utility that specifically says by their name, they're in the gas business. Not all utilities are actually gas companies. This one specifically is. Yes, if we're not using gas anymore, this isn't great for their business model. I would encourage them to explore a broader business model as many energy companies are doing. They're already hedging their bets even when they're in the gas and oil business by expanding into other forms of energy as well.

Yes, it is also true that as we transition off of gas, which isn't overnight and isn't going to happen for any specific neighborhood magically without knowing because it's going to take 10, 20, 30 years for a full transition to take place under the law that whoever's left on gas at the end, yes, the cost per household or business that remains on gas over these 20, 30 years will continue to grow as it is a rarer and rarer decision to make.

It's a bad business model for the gas oil company to stay in and it's a bad business model for somebody to make the decision that 20 to 30 years from now, they want to stick with gas. There's nothing in this law that prevents the Public Service Commission from saying, no right now whatever right now might mean and right here, whatever right here might mean the PSC will still have the ability to say, "Okay, they got to stick with gas, we're approving this for them."

There's nothing in this bill that takes away PSC's power to say an exception here, or we're allowing this here. By the way, existing law also requires PSA to say okay or not okay to any specific energy transition or hookup. We're not changing that part of the law. The AFL-C-- Yes. I'm sorry.

Brian Lehrer: Yes, go ahead. No, on the AFL-CIO.

Liz Krueger: On the AFL-CIO, when you look, there are some unions and locals who oppose this bill hence the AFL-CIO, I believe feels that it can't go against them. They oppose this bill because their workers put oil and gas pipes in the ground. I get it, most of those workers are not here in New York State. We're not an oil and gas state, but there are some workers here who do put in oil and gas pipes, who do repair oil and gas pipes.

My answer, frankly, although we don't necessarily completely agree is, and those workers will continue to have jobs, we're 10, 20 and 30 years. We're not saying that they won't still have jobs repairing gas pipes until such time as we get off of gas, but it's really the people who are starting their careers now, who will be working in other related energy fields, not gas pipes.

Now, they could still be in pipes because in fact geothermal energy has enormous potential. That also uses pipes except there's water and steam running through them, not oil and gas. No, this isn't going to close down the jobs for anybody who's working in this field right now who are in their 50s, 40s, even the 30s. They'll still be working on the gas system through their retirement.

I do think there is a little too much panic out there that's somehow good unionized jobs will disappear in this transition. There's all kinds of energy. We're not even 100% sure what some of the energy models that win the competition will be, but I'm certainly quite sure that in a state like New York, they're going to have unionized jobs attached to them.

Brian Lehrer: Maybe that's a next step. I don't know if a law could be passed that requires union jobs in the renewable energy industry as it takes over from union jobs in the fossil fuels industry. Do you think that's something--

Liz Krueger: Thank you. We have some of that language--

Brian Lehrer: Go ahead.

Liz Krueger: Yes. We have some of the language in the New York HEAT Act and some of that language has been built into the CLCPA and the building electrification bills. I think that the state legislature is thinking the exact way you are, Brian. We do recognize the importance of labor protections and good labor jobs and the opportunity to unionize. We built those protections into this legislation and other legislation we've been working on.

Brian Lehrer: We are a New York and New Jersey Public Radio, on the New York side right now with New York State Senator Liz Krueger from the East Side of Manhattan, talking about her bill, the New York State HEAT Act, which would decrease the number of gas hookups in New York State and also, and we're going to get to this part, subsidize increased utility bills that would result for some ratepayers.

Listeners, we can take your calls. Some people are already calling in. Call us or text with comments or questions on the New York State HEAT Act now in the legislature, but it is not certain that it will pass 212-433-WNYC, 212-433-9692 call or text. Before we take a few calls and texts, I want to get to one other piece of this because here's Newsday's framing in an article out yesterday, the headline is Hochul and New York State Legislature deciding who will pay for climate change transition. That puts even in a bigger frame on it.

It says, "With the various climate laws now in effect, who's going to pay the bulk of the annual $2 billion bill?" Newsday is saying, all the various climate bills that have already been passed are going to cost New Yorkers $2 billion a year one way or another. Then it goes on to your HEAT Act which says, "Ratepayers and energy companies under the HEAT Act, would share some of the cost."

The proposal would hold down total annual increases in utility bills during the transition to renewable energy so that energy bills were no more than 6% of household income. Then it says that cap could most benefit lower and moderate income households that already pay a large share of income to utilities. Critics argue the provision could add hundreds or thousands of dollars to the annual utility bills for middle class and wealthier families. Let's break that down. What's the 6% cap that's in your bill?

Liz Krueger: Exactly that, that your utility costs cannot be greater than 6% of your annual income. It is true as you move up the income scale, people are very unlikely to pay more than 6%. It's not that it would be increasing costs for middle and higher income people, it's just they're not going to hit that cap because 6% of $1 million-- earning $1 million versus $20,000 doesn't really change your utility costs.

Brian Lehrer: Right. Another way to state the math for people who are confused is, I'm just going to pick a random number, if the average home pays a $1,000 a year in utility bills, and you only make $20,000 a year, that's a fairly large percentage of your income. If you make $100,000 a year, you're paying the same $1,000 to heat and et cetera your home. It's only 1% of your income. That's why it helps the lower income people more than the higher income people. There's an assumption there that the utility bills are going to go up because of the transition to renewables under laws the state has already approved. Do you agree with that?

Liz Krueger: The transition to new forms of electricity and heating in old buildings has a cost attached. The research shows that in a relatively short period of time, your per monthly utility costs actually go down after transition, but there is a real expense for the transition. We think that the state average for transitioning homes is about $30,000 and we've built in some tax credits at the state and federal level, some revolving loan funds to help people with transition costs. There are transition costs before you start to see reductions.

Just for comparison, under the existing system to install new or replace gas pipes cost between $3 million and $6 million per mile, which averages $60,000 per customer per mile. As long as transitioning someone's home to electricity costs less than $60,000, it actually makes economic sense for transition. The question is, who's getting hit with the bill? All utility customers or perhaps the individual homeowner or business owner? Again, there are credits and loan funds available to help with those costs. Of course, we know we have to do this, don't we, Brian? Don't we already know that?

Brian Lehrer: We will leave that as a rhetorical question as we go to William in Manhattan. You're on WNYC with State Senator Liz Krueger.

William: I want to make the statement that the electric heating as well but because of climate change, on the compass and square, we don't know if we can rely on it because if the energy goes out on a change of weather, it can really disrupt a blackout and be a drastic terrorizing event taking place. That's my outlook on it and I would like your comment for y'all [unintelligible 00:18:45].

Brian Lehrer: William, thank you. We'll definitely get your question answered. Do you understand the question, Senator?

Liz Krueger: I do. I guess I will answer, we have that story now with our current systems. When we have blackouts and a bunch of parts of the state have blackouts all the time, you are stuck with that reality without electricity your boiler doesn't work, so your heat doesn't work. The goal, and it is explicit in my legislation and the CLCPA, is that our priority for transition needs to be reliability and safe. We're not going to leave somebody in a worse situation.

I sometimes joke with my colleagues when they say these kinds of energy are new and experimental. I go, "I don't know. We've had the sun and solar for a while. We've had wind for a while, and we've had a heat system at the center of the earth for geothermal for a while." Those aren't newer experimental supplies. We've gotten very good at the combination of solar, geothermal, and wind, and we are expanding rapidly battery storage options so that I'm not really at all concerned that we will come up with a new set of options that are less reliable than today. Again, the system we have today isn't so reliable.

Brian Lehrer: A listener writes, "Could you ask the guest to clarify what she means about not fixing old leaky gas pipes? That sounds like a disaster waiting to happen," writes Kristen in Brooklyn. Did she hear you right?

Liz Krueger: I am saying we shouldn't be spending $150 billion to continue a gas system that is already very old, and very expensive to repair and retain. I am not suggesting we don't do repair when there's a leak, and we know that we need to for public safety assure that there isn't a leak. The more and more we speed up not using the gas system, the less money we have to put into repair and continuing a model that's always been a little bit unsafe and leaky, and is getting worse with age but also is just not acceptable for our carbon footprint moving forward.

Brian Lehrer: Here are two questions coming in relative or relevant to the housing stock in New York City. One person writes, "I'm an architect in the city. We do renovations--" I just lost that one. There we go. "--we do renovations of apartments. The vast majority of New York City Co-Op buildings were built before 1929. They do not have the electrical capacity to upgrade to all electrical appliances. I've asked these buildings when my firm does renovations, and they won't give us more electrical power to install electrical appliances."

Another listener writes, "How are owners of rent-stabilized buildings supposed to afford to transition to electric from gas? We can barely afford operating expenses and vital capital improvements under the 2019 rent reforms."

Liz Krueger: I guess they're both sort of the same question. What if the building feels it doesn't have enough money to do the electric upgrades for conversions? Again, both the city of New York and the state of New York have created agencies that work with specific buildings. I forgot the name of the New York City agency, but they created a whole agency. New York State has NYSERDA that work with people to show what the most cost-effective models might be for them and explain the tax credits and loan funds that are available. Every day, we learn about new projects going forward that are actually being successful.

I've had buildings in my own district that date back as early as the building described, I believe the 1920s, who has moved to go to a greener energy and solar system that is saving them quite a bit of money. Up in Rochester, they just announced a new program through the NYSEG, New York State Electric and Gas and Rochester Gas and Electric and they're calling that their non-gas main project to electrify a large number of homes.

We have a project in Manhattan, that's moving to geothermal energy for all of Rockefeller Center. Not exactly a small project. That's a coordinated project with Tishman Speyer and Con Edison. There are models big and small, that are popping up all over the state of New York even as people say "It's too early we're not ready to go there." I argue, actually, we've had a pretty long runway in these last 10, 20, 30 years. The new models that are cost-effective and successful are literally popping up in our press every day of the week. We're behind some other states, frankly.

Brian Lehrer: I'll take one more call. This time it's going to be a supporter instead of a skeptic, and it's Avery in Brooklyn, who's going to ask the last question. Avery, you're on WNYC. Hi.

Avery: Hi. Thank you so much for your work. I'm a member of Climate Families NYC. We are really determined to try and get this passed through the Assembly this year. It seems like Heastie doesn't like passing things that he sees as something from the budget into law, so what's your advice? How can we support you and the HEAT Act here in the last minute?

Brian Lehrer: The underlying reality there that listeners may not know I mentioned it in the intro, but that's a while ago, that you all in the State Senate, Senator as you obviously know, have passed the HEAT Act, the assembly has not, and Carl Heastie, the assembly speaker, you tell me if this has changed in the last day or two has not indicated support?

Liz Krueger: I don't know of any new statements by the Speaker of the Assembly. I do know that we have two bites of the apple here. We can try to move it through the budget. Half of the bill the 100-foot rule the governor already did put in the budget, but it doesn't go far enough. We need the full bill for it to actually work and make sense. The Senate still hopes that that could happen in the budget, and the Assembly might go along. You never know. The Assembly surprises us all the time.

Then of course, when the budget is completed, if the New York HEAT Act is not in the budget, we can revisit the question with the assembly as a freestanding bill. Then at least we avoid the concern that we shouldn't be doing this kind of policy change legislation within the budget bill. You've always got two bites of the apple up here in Albany because in the budget-- [crosstalk]

Brian Lehrer: Because there's the budget season which is concluding maybe this week, and then there's another post-budget legislative session that continues until June. As an addendum, can you just give us a quick update on the budget? Are you just about there? We talked last week on the show about things that are unresolved, like housing and the education funding formula and whether there's going to be a further crackdown in terms of punishment on retail theft. Big sticking points as of a week ago, and the new fiscal year began yesterday so you're in overtime. How close are you?

Liz Krueger: I think we're closer than we were last week, but I don't expect to see any budget bills popping out in today or tomorrow. I think you're right. There are some really big issues still out there. Strong differences on housing, on Medicaid, and healthcare spending, on I guess retail crime, but I don't think that's that much of a disagreement, frankly. Education funding is still a major sticking point.

There's always, always being a piles of other issues. It's amazing how many policy issues do get rolled into the budget, and they're a struggle to get resolved. We're working every day, and we continue to have what we call three-way meetings between the Assembly, Senate, and governor, and that's crucial. It's when those break down that we know we're in trouble, but everybody's still meeting.

Brian Lehrer: History has not ended in the New York State Capital of Albany, and we will continue to talk about it. We thank State Senator Liz Krueger, a Democrat from the East Side of Manhattan. Thank you very much.

Liz Krueger: Thank you for having me, Brian. Take care.

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