Bill Introduced by Krueger to Tax the Energy Used by Cryptocurrency Miners

By now it shouldn’t be news to anyone that New Yorkers, like regular Americans all across the country, are facing an acute energy affordability crisis. Data as of October shows that 1 in 7 residential customers in New York are two or more months behind on their energy bills, owing an average of more than $1,500 in back payments, and 1 in 4 households regularly pay more than six percent of their income on energy costs.

At the end of last year, Governor Hochul signed into law the repeal of the so-called “100-ft rule,” which forces all gas ratepayers to subsidize new gas hookups at a cost of $600 million every year, a figure that increases to 3 to 4 times that amount as it is paid off by ratepayers over decades. That’s over $2 billion in long-term liabilities being taken on by gas utility customers every single year. Thankfully, when the repeal goes into effect at the end of this year, the next time your gas utility goes to the Public Service Commission to ask for a rate increase, those mandatory subsidies won’t be included in the calculation.

But repealing the 100-ft rule is only one piece of the puzzle. Among the major drivers of utility rate increases are inflation, property taxes, repairing and (in the case of gas) expanding century-old distribution and transmission infrastructure, and meeting the exploding demands of energy-guzzling data centers and cryptocurrency miners. Actions by the Trump Administration to kill the development of new electricity generation and increase exports of liquified natural gas (LNG) are also driving up prices, as are tariffs. There is no single silver bullet to bring rates down, but there are several bills already introduced in the State Legislature that will go a long way to providing some relief for New York utility customers.

Last year, the Senate passed two separate packages of bills to reform the process by which the Public Service Commission (PSC) sets utility rates. Many of these bills are carried by Senator Mayer. They include legislation to reform the process for calculating the utility rate of return on equity (the profit margin that is guaranteed to utilities so they can raise private capital), which has been unjustifiably high for too many years. Other bills would address high executive salaries, limit costs passed along through fixed charges, and require the PSC to consider broader economic impacts of rate increases.

We must also tackle the threat to energy affordability and reliability posed by data centers and cryptocurrency miners. A handful of bills have already been introduced to limit the threat posed by data centers, including policies that would require data center developers to take on the transmission and generation infrastructure costs associated with their build-out, keeping that burden off other ratepayers. Senator Krueger carries a bill to establish a tax on the energy used by cryptocurrency miners, which currently use an amount of electricity in New York equivalent to one million households while providing little to no economic benefit to their host communities or the state. Such a tax could raise hundreds of millions of dollars, with the revenue dedicated to utility Energy Affordability Programs that provide bill support for low- and moderate-income New Yorkers.

We also have opportunities this session to hand individual New Yorkers and their communities the tools to reduce their own electricity bills while supporting a more affordable energy system for everyone, by promoting solar generation. From utility-scale to community-scale, from rooftops to balconies to backyards, supercharging our deployment of solar helps customers save money on their bills and reduces costs for all other ratepayers by reducing the need for costly grid upgrades (it’s also worth noting, considering recent events, that nobody starts wars over access to sunlight). One important bill is the Accelerate Solar for Affordable Power (ASAP) Act, which will increase the state’s target for distributed solar generation and make critical cost-saving reforms to the utility interconnection process for distributed solar. On the individual scale, Senator Krueger carries the Solar Up Now New York (SUNNY) Act, which will open the door for renters, low-income New Yorkers, and many others who can’t install rooftop solar to use small-scale plug-in, or “balcony” solar.

The bills we’ve mentioned are just starting points in what will require a long-term effort to alter the trajectory of utility rates in New York, but it is critical that we take these steps this session. This kind of concerted action across multiple fronts is what New Yorkers need to see from their government, and we look forward to working with our colleagues in the Legislature and the governor to ensure that we deliver.

Liz Krueger is a longtime NYS Senator representing the 28th district on the Upper East Side. This article was originally published by the USA Today network.