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CFNY Comments on FERC Proposed Policy Statement on Carbon Pricing

NEW YORK, November 16, 2020––Carbon Free New York (CFNY) is a coalition comprised of 28 environmental, renewable, clean energy, and organized labor organizations who recognize New York’s opportunity to decarbonize its electric generation sector with a market-based model that fights climate change, improves public health, and preserves states’ rights to achieve their own clean energy policy goals. The member organizations believe incorporating the social cost of carbon within the New York Independent System Operator’s (NYISO) electricity markets will align the Federal Energy Regulatory Commission’s (FERC) jurisdictional wholesale electricity markets with New York’s renewable, clean energy and decarbonization public policy objectives. Therefore, CFNY strongly supports FERC’s October 15 policy statement encouraging efforts to incorporate a state-determined carbon price in wholesale electricity markets.

FERC’s proposed policy statement clarifies that FERC has jurisdiction over regional energy market rules that incorporate a state-set carbon price, and we implore the incoming administration to ensure FERC does not undermine clean energy programs but rather supports and collaborates with them, including New York State agencies efforts to include a price on carbon, set by NYS, in the (NYISO’s wholesale electricity market. A price on carbon pricing would deliver vast economic, social, and environmental benefits to millions of New Yorkers. 

NYISO’s nation-leading proposal to incorporate a social cost of carbon is an efficient, cost-effective way for the state’s wholesale power markets to support the goal of decarbonizing the New York energy sector by 2040. It would do so by:

• Accelerating decarbonization of New York’s generation fleet and mitigating leakage;
• Improving public health, especially downstate, by moving away from the most dangerous carbon-emitting generators;
• Accelerating entry of new renewable projects, particularly in areas currently served by fossil units, including environmental justice communities;
• Creating stronger incentives for cost-effective transmission investment, providing downstate market access to cleaner and more efficient resources located upstate, and growing the market for renewables upstate;
• Incentivizing greater energy efficiency; and
• Reducing the time and cost to achieve the state goal of becoming 100% carbon-free.

Furthermore, carbon pricing will have far-reaching economic and public health benefits as thousands of new jobs are created and air pollution is reduced. In short, the NYISO carbon proposal will help deliver New York’s clean energy transformation while also providing the state with an environmentally friendly tool to build back better. We look forward to FERC taking an active and supportive role in the journey to a clean energy economy.