Upstate United > News > Press Releases > NEW PAPER: Hidden Albany-Backed Program Costs New York Electric Customers Up to $1.7 Billion a Year
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NEW PAPER: Hidden Albany-Backed Program Costs New York Electric Customers Up to $1.7 Billion a Year

May 20th, 2026

Two energy industry veterans — who supported carbon markets and helped develop and operate generating projects, including renewable projects in competitive electricity markets where there is carbon pricing— now warn the Regional Greenhouse Gas Initiative (RGGI) has become “essentially a tax” on New Yorkers’ electric bills

As New York families and businesses continue to absorb skyrocketing electricity bills, a new analysis is shining a light on a little-known state-backed program that quietly adds between $985 million and $1.77 billion to ratepayer costs every year — and is poised to climb even higher under pending regulatory changes.

The paper, authored by retired energy industry executives James J. Cifaratta and Matthew J. Picardi, and submitted to the Department of Environmental Conservation, examines the Regional Greenhouse Gas Initiative (RGGI), a multi-state cap-and-trade program that requires fossil fuel power plants to buy carbon dioxide allowances for every ton they emit. Those costs are passed directly on to consumers as higher wholesale electricity prices.

According to the paper, RGGI currently costs the average New York electric customer between $.006/kWh and $.011/kWh — translating to roughly 3.2% to 5.8% of the typical electric bill.

“This is a cost most New Yorkers have never heard of, hidden inside a bill they can barely afford to pay,” said Justin Wilcox, Executive Director of Upstate United. “What’s striking is that this warning isn’t coming from outside critics. It comes from two industry experts who were intimately involved in carbon markets and once believed in their promise. When the architects of a system tell you it’s no longer working, Albany should listen.”

Why These Authors’ Perspective Matters

Cifaratta and Picardi are not opponents of climate policy or clean energy. Each spent more than 35 years inside the energy industry — including Picardi’s tenure at Shell Energy North America — actively supporting the development of carbon pricing programs and participating in the very markets that trade these allowances. In 2018, Picardi formally filed comments supporting the New York Independent System Operator’s effort to develop a carbon pricing program.

It is precisely that insider experience that gives their critique weight. Their conclusion, in their own words:

“While carbon pricing programs have tremendous value in a market-based system, public policy is not relying on markets for resource development anymore. New York and other RGGI states have regressed to a command-and-control approach managed through environmental regulations and state-supported investments. In this environment, RGGI is simply a tax.”

Key Findings

  • $1.3 billion per year – estimated annual cost to New York electric customers at recent RGGI allowance prices 35/ton), with a range of $985 million to $1.77 billion depending on allowance prices.
  • Costs to ratepayers exceed program revenues. Because of how wholesale electricity markets are structured, customers pay RGGI costs based on the highest cost generator setting the clearing price — meaning bills reflect costs that significantly exceed what generators actually spend on allowances (i.e., because the RGGI-inflated market clearing price is paid to all dispatched generators, including ones not subject to RGGI).
  • The original purpose has eroded. RGGI was designed to push dirtier coal and oil plants out of the dispatch order in favor of cleaner gas — but New York’s last coal plant retired in 2020, and oil units rarely operate. The “redispatch” benefit has largely disappeared and New York is unable to retire gas plants and keep the lights on.
  • It no longer drives market-based clean energy investment. New York’s renewable buildout now relies on long-term state-backed contracts through NYSERDA, rather than on market signals from RGGI — meaning ratepayers bear the risk and cost for 20-to-30-year contracts regardless of the RGGI program.
  • Costs are about to rise sharply. Under the Third Program Review taking effect January 1, 2027, RGGI allowance caps tighten significantly and cost-containment trigger prices climb 7% annually — locking in higher consumer costs through 2037.
  • Secondary market prices are already at $58/ton — well above auction clearing prices, signaling tight supply and further upward pressure on bills.

Upstate United Calls for Albany Action

“New Yorkers are being asked to pay more on their electric bills for a program that no longer delivers what it was designed to deliver,” said Wilcox. “Albany suspended the gas tax in 2022 when families were getting hammered at the pump. The same kind of relief is warranted now. The Hochul Administration and the Legislature should take three steps immediately:

  • Provide short-term ratepayer relief by refunding a portion of RGGI auction revenues directly back to customers.
  • Pause or revise New York’s adoption of the Third Program Review before the January 1, 2027, effective date, given the steep cost trajectory it locks in.
  • Push RGGI to revisit its cap and cost-containment design to reflect the reality that New York is no longer relying on carbon markets to drive clean energy investment.”

“This is exactly the kind of hidden, costly Albany mandate that erodes affordability for upstate families and businesses,” Wilcox added. “If state government is going to keep stacking these costs onto utility bills, the least it can do is be honest with New Yorkers about what they’re paying for — and whether they’re still getting their money’s worth. According to two of the people who helped build this system, the answer is no.”

Read the Full Paper

The full paper, “Little Known Program Costs New Yorkers $1-2 Billion on Electric Bills,” by James J. Cifaratta and Matthew J. Picardi (May 18, 2026), is available at: https://upstateunited.com/wp-content/uploads/2026/05/RGGI-Cost-Paper-May-18-2026.pdf

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About Upstate United

Upstate United is a non-partisan, pro-growth advocacy organization that champions policies to make New York more affordable, more competitive, and more accountable to its taxpayers. We push back against costly mandates and hidden taxes coming out of Albany that drive up the cost of living and doing business across upstate New York.