LEGISLATIVE UPDATE: Decarbonization Has Huge Implications for Small Business Across the State

LEGISLATIVE UPDATE

Decarbonization Has Huge Implications for Small Business Across the State

By William Y. Crowell, III

In New York State questions remain unanswered as to the implementation of the Climate Leadership and Protection Act targets to reduce greenhouse gas emissions by 40 percent in 2030 and no less than 85 percent by 2050 from 1990 levels.

Buildings have been identified as a significant source of greenhouse gas so the discussion has focused on decarbonization of residential, commercial, manufacturing and industrial buildings. This discussion started in earnest in 2022 when the budget included a provision requiring new construction statewide to have zero on site emissions no later than 2027. This budget provision was rejected, however legislation S.6843C (Kavanagh) A.8431B (Gallagher) entitled the “all electric building act” took center stage by prohibiting buildings from using combustion of fossil fuels in new construction statewide in buildings less than seven stories by 12/31/2023 and in buildings of more that seven stories by 7/1/27. The building code council was authorized to exempt systems for emergency back up power or several specific building uses a crematorium, hospital, Laundromat, laboratory or commercial food establishment. An exemption or waiver by the building code council would not be sufficient if based on financial considerations to determine physical or technical infeasibility. This bill attracted attention and support from the environmental community and a significant number of legislators. It did not pass but this was in part attributed to the fact that the Climate Action Council was preparing its draft scoping plan.
Decarbonization Plan

Another legislative proposal S.8198 (Krueger) A.9329 (Fahy) requires the Public Service Commission within one year to develop a statewide gas utility services decarbonization plan based on gas sales reduction targets, robust analysis and consideration of electrification pathways. The bill prohibits the construction of new gas mains or other distribution which would expand gas service and removes entitlement of non-residential customers to utility gas service. These two proposals highlight the commitment of many legislators to achieve carbon neutrality.

At the same time the Legislature was introducing legislation to implement carbon neutrality the Climate Action Council was formulating a draft scoping plan which is scheduled to be completed prior to January 1, 2023. The scoping plan serves as a framework for achieving the reduction of gas emissions. The transition from fossil fuels to electrification in buildings has not yet been finalized. Concerns have been raised in their discussions about sensitivity to costs for small businesses and the difficulties in high temperature situations of electrification. The gas system during transition needs to maintain reliability, safety and resiliency. The Climate Action Council has been discussing the role of alternative fuels in transitioning to the use of natural gas with renewable hydrogen which may be helpful in manufacturing or industrial uses. The Council has also discussed a prohibition on the replacement of gas and oil fueled heating equipment at the end of its useful life coupled with incentives to increase market demand for electrification. There are no final recommendations yet from the Council with some members seeking a transition over time and others urging more immediate action. Once the scoping plan is finalized the next step would be to amend the State Energy Plan.

The implementation of the plan would involve the Building Code Council, Department of Environmental Conservation, New York State Energy Research & Development Authority (NYSERDA) and the Public Service Commission. The Building Code Council under legislation signed by the Governor would have the ability to ban gas hook ups and to require the use of alternatives to carbon fuels when heating equipment has reached the end of its useful life. The Building Code Council was empowered to implement the Climate Leadership and Protection Act. The mechanisms to implement the plan are in place. The plan, however, has not crystalized. A plan which provides flexibility to enable parties to meet requirements within reasonable time and with appropriate incentives is essential for an equitable transition which is sensitive to the costs of the transition.

The Governor would have the ability through the agencies implementing the transition to recognize that one size does not fit all, and businesses need time to make adjustments. Carwash owners need to start considering the implications on their businesses of decarbonization, to effectively respond to future proposed requirements.

New York is rapidly moving down a path to change energy choices available for carwash operators and other businesses in New York State. Although specifics are not yet resolved, it is clear that change is coming so begin to consider alternatives and the consequences.
William Y. Crowell, III, Esq. is a partner with Dickinson, Avella & Vidal in Albany. You can reach him at 518/369-7961 or wcrowell@dickinsonavella.com