New Yorkers may be in for a new energy tax if Governor Kathy Hochul enacts climate Superfund legislation that attempts to stick energy companies with billions in new fees for alleged climate adaptation costs. The Superfund bill in New York comes as Vermont recently enacted a similar law, while states like Maryland and California discarded their own Superfund bills amid concerns from state Democrats that the measures would simply amount to a “regressive” tax.

NY Climate Superfund Will Increase Energy Costs, Dem Lawmakers Admit

New York’s Climate Change Superfund Act, which would implement $75 billion in new fees on fossil fuel companies, unexpectedly passed in the dead of night this month despite facing dim prospects earlier in the year. Assembly leadership pulled it “off the shelf,” reportedly to plug a potential budget shortfall and appease climate activists following Hochul’s decision to delay a controversial congestion pricing measure.

Hochul’s office is reportedly “reviewing” the legislation, which could have a massive impact on consumers’ wallets. The bill seeks to collect $3 billion per year from large energy companies over the next 25 years, and would likely push already high New York energy costs even higher.

To the surprise of many observers, key legislators reversed their positions on a measure they claimed just weeks ago would increase energy costs. Assembly Speaker Carl Heastie had previously told reporters in May he objected to the legislation because it would raise utility bills:

“New York Assembly Speaker Carl Heastie on Thursday threw cold water on a bill that would require major energy companies to pay for climate change remediation, saying the measure could ultimately result in higher costs for utility ratepayers. […] ‘Asking these companies to pay more, it’s going to be, of course, taken out on the ratepayer.’”

The bill was later amended to remove utilities just prior to its passage in the Assembly. However, nothing in the Superfund legislation prevents utilities from passing on cost increases resulting from the proposed $75 billion fee on oil and natural gas companies, which supply energy to utility companies.

Speaker Heastie’s eleventh hour flip-flop was reportedly driven by pressure to “do some environmental things” after climate activists accused Governor Hochul of “betrayal.” Politico reports:

“It was a bit of a curveball — Assembly Speaker Carl Heastie said in recent weeks that his house wanted ‘to do some environmental things’ before heading home, but the superfund proposal had seemed to be the least likely to be approved of several high-profile environmental measures until late Thursday.”

While Hochul’s office is reviewing the Superfund bill, the proposal was absent from her budget earlier this year. Should she elect to sign the legislation, the Governor will likely be forced to explain why she enacted a law that her own party correctly warned will increase energy costs. New Yorkers already pay over 30% more than the US average in residential electricity prices, and fossil fuel price hikes driven by the legislation could easily be passed down to consumers.

Climate Superfund Laws Seek Same Policy Goals as Climate Lawsuits

Climate superfund bills seek the same policy goals as climate change lawsuits that have sprung up in cities and states across the country. Both efforts are backed by the Rockefellers, but there is a growing activist interest in Superfund bills as climate suits remain mired in procedural delays and setbacks.

The Rockefellers are intently focused on their Plan B – so much so that Lee Wasserman himself, president of the Rockefeller Family Foundation and a key architect of climate litigation, has lobbied New York officials on the state’s superfund bill.

The Wall Street Journal reports:

“Heightened interest in Climate Superfund legislation is driven in part by the slow progress of lawsuits brought by states and cities seeking compensation from fossil-fuel companies, said Michael Gerrard, founder of the Sabin Center for Climate Change Law at Columbia Law School. These cases have been ongoing since 2017.

“‘It’s an expression of the urgency [state legislators] feel about the climate crisis, and frustration that better methods haven’t happened yet—that Congress hasn’t passed comprehensive legislation, that these lawsuits have dragged on,’ he said.”

Michael Gerrard’s Sabin Center has served as a clearinghouse for academic, legal, and public support for the climate litigation campaign since its inception. The center is hardly an unbiased party – working alongside the Rockefellers behind closed doors, Michael Gerrard supported the New York Attorney General’s failed lawsuit against Exxon.

Gerrard’s frank assessment that Superfund bills and climate lawsuits are intended to achieve similar climate policy outcomes is at odds with rhetoric from the lawsuits’ plaintiffs, who go to great lengths to avoid implying that climate suits are non-judiciable political questions.

New York and Vermont Superfund Laws Could Face Stiff Legal and Implementation Challenges

New York’s Climate Superfund is likely to face stiff legal challenges should it be signed into law, in part due to concerns that arbitrary and retroactive fees on energy production could be unlawful. While both bills rely on Rick Heede’s Rockefeller-funded attribution “science,” a shoddy and untested body of research developed for climate lawsuits, Vermont has taken a slightly different approach to New York to assigning liability and fees to energy companies. Pat Parenteau, an advisor to Sher Edling, the plaintiffs’ firm representing most states and municipalities in their climate lawsuits, admits that Vermont’s approach comes with its own vulnerabilities:

“Vermont is using a no fault scheme, which means the state wouldn’t have to prove negligence to make companies pay into the Climate Superfund Cost Recovery Program. […] Parentau pointed out that that could be a weakness of the bill, making it difficult to enforce.”

Legal pitfalls aside, even climate activists admit that climate superfund implementation will come with its own challenges. Parenteau conceded that the idea of a climate superfund may be one thing, but it’s “the execution and the implementation of a law like this that gets complicated.”

Even if the bills are implemented, the simple matter of directing money to where the legislation requires it to go – climate change adaptation – is its own challenge. Speaking to the activist outlet Grist, Parenteau explained that in both the tobacco lawsuit settlements and the EPA’s site cleanup superfund program, funding rarely made it to the intended priorities

Bottom Line: The last thing New York consumers need is an energy tax passed in the dead of night simply to provide cover against special interest attacks. This bill will do nothing to address New York’s own environmental failures, but is certain to drive costs higher for working people.