February 1, 2023

Mr. Basil Seggos, Commissioner

New York State Department of Environmental Conservation
625 Broadway
Albany, NY 12233-0001

Re: Need for a Regulatory Impact Statement for Rulemaking Associated With
the Climate Action Council Scoping Plan Full Report December 2022.

Dear Commissioner Seggos,

The following comments concern the rulemaking you agency will be conducting during
2023 related to the Climate Action Scoping Plan Full Report December 2022. I wish to thank
you and your staff for the effort that was made to produce the new plan.

Section 1: Introduction

The Climate Action Council prepared a document entitled Scoping Plan Full Report
December 2022 (The Report).1 The Report contains a “Next Steps” section describing the
rulemaking that will be undertaken by the New York State Department of Environmental
Conservation (DEC) no later than January 1, 2024. The Report states:

“DEC will have until January 1, 2014, to draft and promulgate enforceable regulations to
ensure the State meets Climate Act’s statewide GHG emission limits (i.e., 40% reduction
in Statewide GHG emissions by 2030 and 85% reduction by 2050, both from 1990) as
outlined in the Scoping Plan.”2

DEC will be developing enforceable regulations to implement the policies as discussed in the
Report.

1
New York State Climate Action Council Scoping Plan Full Report December 2022.
2
Ibid., p. 22.
1
 The Report is proposing policies that relate to numerous sectors of the economy in New
York State including the following:

 Transportation sector.3
 Buildings.4
 Electricity.5
 Industry.6
 Agriculture and Forestry.7

The Report also addresses a number of policies describes as Cross-Sector Policies that relate to
segments of the New York State economy. Examples include:

 Economy wide strategies.8

 Gas System Transition.9
 Land use.10
 Local government.11

The rules and regulations you will be developing in 2023 essentially regulate numerous
portions of the New York State economy. In some cases the Report extends regulation to entities
such as natural gas or electric utilities which is already subject to regulation. In other cases, such
as the local government sector, regulation will be applied to manage their energy usage. New
York State’s individual consumers will experience a new form of micro-regulation. For
instance, the rules and regulations developed from The Report could mandate that they replace a
gas cooking stove, or purchase a heat pump device. The Report also suggests that electric cars
be purchased by individuals and fleets. The outcome of the process will be the extension of
regulation to many entities in New York State including millions of consumers.

3
Ibid., 146-174.
4
Ibid., 174-218.
5
Ibid., 219-256.
6
Ibid., 257-270.
7
Ibid., 271-314.
8
Ibid., 339-349.
9
Ibid., 350-363.
10
Ibid., 364-395.
11
Ibid., 398-403.
2
Section 2: The New York State Administrative Procedures Act

The rules that DEC will be developing in 2023 must be promulgated under the
Consolidated Laws of New York. Chapter 82 of the laws relates to the State Administrative
Procedures Act (SAPA). Article 2, of the SAPA law provided the “Rule Making” requirements
that an agency such as the DEC must follow to implement a new rule. Section 202 of Article 2 is
entitled Rule Making Procedure. Section 202-A discusses the requirements that a Regulatory
Impact statement be developed for proposed rules. The legislation reads as follows:

§ 202-a. Regulatory Impact. 1. In developing a rule, and agency shall, to the extent
consistent with the objectives of applicable statutes, consider utilizing approaches which
are designed to avoid undue deleterious economic effects or overly burdensome impacts
of the rule upon persons, including persons residing in New York state’s rural areas,
directly or indirectly affected by it or upon the economy of administration of state or
local government agencies. Such approaches shall include, but not limited to, the
specification of performance standards rather than design standards.

Note that this portion of the SAPA legislation requires that the impacts upon persons be
discussed in the regulatory impact statement.

The SAPA legislation states that a regulatory impact statement be issued for rulemaking
such as that be proposed under The Report. Note the following language:

2. Each agency shall, except provided in subdivision five of this section, issue a
regulatory impact statement for a rule proposed for adoption or a rule adopted on an
emergency basis.12

The SAPA legislation states that the regulatory impact statement shall contain some items related
to the cost of the new rule on those subject to its regulation:

C. Costs. A statement detailing the projected costs of the rule, which shall
indicate:

(i) the costs for the implementation of, and continuing compliance with, the
rule to regulated persons;

12
State Administrative Procedures Act, Section 202-A (2).
3
 (ii) the costs for the implementation of, and continued administration of, the
rule to the agency and to state and its local governments;
(iii) the information, including the sources of such information, and
methodology upon which the cost is based;
(iv) where that an agency finds that it cannot fully provide a statement of such
costs, a statement setting forth its best estimate, which shall indicate the
information and methodology upon which such best estimate be provided.

The only exemption provided in the SAPA legislation relating to developing the cost of the rule
applies for simple technical amendment.13 It is clear, therefore, that the DEC must provide the
cost information mandated under the SAPA rules as it develops any regulations for the Report by
January 1, 2024.

The importance of DEC rulemaking and the need for a regulatory impact statement has
been discussed by academic researchers.14 The following statement was made by two key DEC
researchers:

“… DEC rules and regulations exert great influence on the economic and social behavior
of the public. They also have the potential to benefit some parties at the expense of
others. As a result, the state has established a variety of procedures and approaches to
implementing laws and regulations designed to facilitate policy objectives while ensuring
fairness and equity in the treatment of citizens. In particular, these procedures govern the
process for agency rule-making, permitting, and compliance/enforcement actions.”15
The same analysis discusses the requirement that DEC develop a regulatory impact statement for
rules and regulations.16

13
State Administrative Procedures Act, Section 202-A (5. a).
14
Gary Weiskopf and David L. Markell. “Environmental Policy in New York” in Governing
New York State, Jeffrey M. Stonecash, ed. (Albany, New York: State University of New York
Press, 2001). Pages 327-348.
15
Ibid., 335.
16
Ibid., 336.
4
Section 3: The Cost Information in the Report

The Report includes much cost related information. For instance, Chapter 9 entitled
“Analysis of the Plan” discusses four scenarios that New York State can consider.17 Chapter 10
entitled “Benefits of the Plan” provides a “Benefit Cost” analysis for the scenarios. This chapter
is supplemented by Appendix G of the Report entitled “New York State Climate Action Council
Draft Scoping Plan Integration Analysis Technical Supplement” that was prepared for the DEC
and for the New York State Energy Research & Development Authority.18 The Appendix G
report was prepared by Energy and Environmental Economics (E3) Abt Associates. It is
supplemented by three documents maintained at the DEC webpage:

 Annex 1. Techno-Economic Analysis Input and Assumptions.

 Annex 2. Techno-Economic Analysis Key Drivers and Outputs.
 Annex 3. Health Co-Benefits Analysis Supplemental Data.19

The Report contains numerous other sub-reports prepared by various agencies.

The cost benefit analysis in The Report shows that there are $140 billion in costs related
to energy consumption in the state and that these costs amount to about 8.9 percent of state gross
domestic product in 2020.20 These costs are composed of many items such as electricity costs,
transportation investment, buildings investment, natural gas costs and other items.21 The
important point for the DEC to consider as it develops the rulemaking in 2023 is that consumers
pay many of these costs. If the DEC proposes a new rule to change how the costs are determined
then it is necessary that the DEC show the monetary costs that will be incurred in the required
regulatory impact statement for the new rule or regulation.

The cost benefit scenarios used by the Climate Action Council are shown in Chapter 10
of the Report. For the baseline scenario they show $410 billion in benefits and $295 billion in

17
The Report, pp. 118-124.
18
The Report, Appendix G.
19
Ibid.
20
The Report., p. 125.
21
Ibid., 126.
5
costs for a net benefit of $115 billion.22 This is a standard net social benefit cost analysis.23 The
cost benefit analysis developed by the Climate Action Council includes some costs that will be
paid by consumers. The analysis shows that the benefits derived from the value of avoided
greenhouse gas emissions (GHG) and from the value of health benefits exceeds the costs. The
fact remains that there are monetary costs that will be paid by the individuals and other entities
that are subject to the regulatory plan offered by the Climate Action Council. There are a
number of specific examples that illustrate the types of transactions that are presently occurring
that may have monetary cost changes under any new rules and regulations established by the
DEC. For instance:

 Numerous “cooking only” natural gas residential customers residing in the City of
New York may be forced to purchase cooking equipment fueled by electricity.
The customers will be subject to regulation by the DEC or some other New York
State regulatory agency. They may be forced to purchase a new appliance and
they may also have to upgrade their electric service including the electrical box
and related circuits in their home. The DEC must show the monetary cost of
changing the transaction to the consumer when it proposes a formal rule under the
SAPA legislation to mandate the change. While there may be more
environmental and health benefits from implementing the rule, the monetary cost
problem still remains for the consumer. If a formal rule is promulgated to change
the cooking arrangement the DEC is under a legal mandate to show the monetary
cost effect on the consumer.
 Some utility consumers in upstate New York may be forced to change their
natural gas heating service under the rules being promulgated by the DEC. The
consumers may have to spend moneys on a heat pump or some other electric
system equipment. While the environmental benefits and health benefits may
exceed the monetary costs being spent by the consumer, the DEC is required to
show the monetary cost change for consumers under the requirements of the
SAPA legislation related to rulemaking.
 A local government may be required to change its landfill operation under new
rules being developed by the DEC. If there is a monetary cost change for the
local government and ultimately the landfill consumers, the DEC is required to
show the cost change under the SAPA legislation rules. The DEC can’t simply
state that the rule is justified by making references to environmental and health
benefits discussed in the Report under the various scenarios.

22
These are shown on a net present value basis. The actual amount of costs expended under the
plan will be greater than $295 billion on a nominal basis.
23
Anthony E. Boardman et. al. Cost-Benefit Analysis Concepts and Practice, Third Edition
(Pearson Prentice Hall: Upper Saddle River, New Jersey, 2006). Pages 1-3. Also, see W. Kip
Viscusi et. al. Economics of Regulation and Antitrust, Fourth Edition (Cambridge,
Massachusetts: The MIP Press, 2005) Pages 30-32.
6
 The Report has an impressive amount of studies and data concerning the costs used in the
cost benefit analysis. For instance, a cost sensitivity analysis is contained in Section 10.4 of the
Report. This shows sensitivity studies for items such as inflation and for changes from the
federal Inflation Reduction Act that may affect some of the costs.24 The large amount of
monetary costs of $295 billion used in the baseline scenario must be used to assign the costs to
specific transactions such as the items discussed above. Numerous other transactions will occur
that are regulated under the Plan and the proposed rulemaking. The actual amount of costs
expended under the plan will be greater than $295 billion since the stated cost is on a present
value basis. The assignment of costs will allow the DEC to establish a legally binding rule under
the regulatory impact statement requirement from the SAPA legislation. If the DEC attempts to
develop a new rule using a macro approach such as simply citing the results of the cost benefit
analyses contained in the Report they will be making a significant error in developing the formal
rules and regulations under the SAPA legislation. The Report shows that there are numerous
cost studies prepared by the DEC, and by NYSERDA and other consultants that can be used to
show the proper cost effects on any new rule proposed by the DEC.

* * *

Section 4: The DEC Must Show the Costs of Any Rules Affecting Consumers and Other Entities
To Which the New Rules Apply

As discussed, supra., the DEC must illustrate the costs to be imposed by all entities it
intends to be regulated under the rules to be adopted by January 1, 2024. This relates to
individual consumers whose behavior will be regulated under the mandates contained in the
Report. If the DEC promulgates any rule that mandates that a consumer purchase any type of
item such as a new appliance or a vehicle the DEC must show the cost of the item and how it
will affect consumers by issuing a regulatory impact statement. The same action of
demonstrating the cost will apply to any agency such as a state and local government. If any
new DEC rules apply to regulated utility companies the DEC must show how much utility bills

24
The Report, pp. 133-135.
7
will increase for the various types of users such as residential, commercial, industrial and low
income consumers.

If the new DEC rule or regulation being developed in 2023 simply states that it would be
desirable for New York State to achieve a 40% reduction in statewide GHG emissions from 1990
levels by 2030 as set forth in the Report, the cost benefit analysis provided in the Report could be
the basis for the regulatory impact statement assuming it is valid. This would be a type of global
rule established by the DEC which does not force anyone to take action such as purchasing new
energy equipment. If the proposed rule regulates the behavior of a citizen by forcing them to
purchase new energy related equipment, the DEC must show in the regulatory impact statement
how much the monetary cost would be for the person to purchase and operate the new
equipment. The cost should have been included in the total amount of costs of $295 billion that
are included in the cost benefit analysis used by the Climate Action Council. It should be a
relatively easy task for the DEC to disaggregate the total cost figure to show the costs for
specific events such as the purchase and operation of a heat pump system. If, for some reason,
the costs to purchase the heat pump and to operate it were not examined in the cost benefit
analysis included in the Report, then it will be necessary for the DEC to show the costs with new
data in order to publish a new rule or regulation concerning the mandatory heat pump purchase.
This cost data must be included in the regulatory impact statement associated with the new rule.
The same model would have to be used for any new rule the DEC intends to publish which
regulates all energy related purchasing decisions by consumers or other parties in New York
State.

The Climate Action Council is in a position to influence the energy future of New York
State. It is not, however, in a unique position. New York State was instrumental in developing
New York State’s first Energy Master Plan in 1980 (The 1980 Plan) under Governor Hugh L.
Carey and James Larocca who was the Commissioner of the New York State Energy Office. 25
There was much uncertainty in energy planning at that time but the 1980 Plan provided guidance
for New York State to proceed. The 1980 Plan estimated that $10 billion of consumer savings
would result from 1980 to 1994. A statement was made that:

25
New York State Energy Master Plan Executive Summary, Final Report March 1980.
8
 Consumers benefit significantly from the Plan. Substantial cost savings to consumers
would result in increased discretionary income which will flow through the State’s
economy and create significant additional jobs, earnings, and personal income.26

The cost impacts on the various categories of consumers could be examined given the
quantitative work used in the 1980 Plan. The $10 billion in savings could be allocated to various
groups to show the impact from the 1980 Plan. The SAPA legislation was implemented in 1975
so new rules being developed by New York State agencies could have developed cost estimates
for the various entities that had to comply with any new rulemaking.27 DEC should provide the
costs that apply to all consumers and other entities in 2023 as it develops rules under which they
will be regulated.

Thank you for your consideration.

Sincerely yours,

Kevin M. Bronner, Ph.D

Albany Research in Public Administration
4 Georgian Terrace
Loudonville, NY 12211
(518) 489-5252

(krbronner@gmail.com)

26
New York State Energy Master Plan Executive Summary, March 1980, page 4.
27
Robert B. Ward. New York State Government, 2nd edition (Albany, New York: The
Rockefeller Institute Press, 2006). Page 215-219.
9