New York drivers could pay more than $2 extra per gallon for gas by 2031 under the state’s current climate law targets, according to a new memo from the New York State Energy Research and Development Authority.
The analysis warns that natural gas prices could climb nearly $17 per MMBtu, with some households facing thousands of dollars in added annual costs if no changes are made to the Climate Leadership and Community Protection Act (CLCPA).
In the Feb. 26 memo to Jackie Bray, director of state operations, NYSERDA President and CEO Doreen M. Harris outlined what the agency described as likely compliance costs tied to meeting the law’s 2030 emissions targets through a cap-and-invest program.
The memo estimates an allowance price starting near $120 per ton and rising to $179.80 per ton by 2031 in real terms. NYSERDA cautioned that the figure could underestimate actual costs, citing changes in federal policy, tariffs, inflation and market conditions since earlier modeling.
Based on that projected allowance price, the memo estimates gasoline prices could rise by about $2.23 per gallon. Diesel could increase by $2.41 per gallon. Natural gas could rise by $16.96 per MMBtu.
The agency calculated those figures by multiplying the emissions intensity of each fuel by the forecasted allowance price.
Household impacts
The memo projects that upstate households relying on heating oil could see gross annual costs of about $4,152. Upstate households using natural gas could face about $4,260 in gross costs.
After accounting for affordability benefits under the policy design, net annual impacts would still reach about $2,460 for upstate heating oil households and $2,580 for upstate natural gas households.
New York City households using natural gas would see lower impacts. The memo estimates $2,340 in gross costs and $1,548 in net costs annually.
The analysis also modeled alternative scenarios. Households switching to conventional replacement systems would see lower net costs than those keeping current equipment. Those adopting high-efficiency electrification could see net savings, including estimated savings of $1,560 for upstate households and $804 for New York City households.
Business impacts
Small commercial ratepayers could face about $6,950 in gross annual costs, with total utility or fuel bills ranging from roughly $36,000 to $54,000 a year. That represents a premium of 13% to 19% compared with current energy bills.
Large commercial ratepayers could see gross costs of about $695,036 annually. Total annual utility or fuel costs could range from $1.5 million to nearly $2.6 million, or 27% to 46% above current bills.
The memo also estimates that operating an average diesel delivery truck would cost about $3,837 more per year, pushing total annual fuel costs to about $6,255 — a 61% increase.
The document notes that extending protections for energy-intensive, trade-exposed industries could be limited under current CLCPA targets. Some manufacturing entities could face costs reaching millions of dollars annually.
NYSERDA said the modeling does not reflect recent federal policy shifts, including changes to tax credits and regulations. The memo also cites inflation, supply chain disruptions and geopolitical events as factors that could influence energy costs.
The agency argues that without adjustments, the law’s accounting approach and near-term targets could lead to higher costs for households and businesses.
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