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NY governor unveils plan to electrify homes, achieve zero-emissions construction


Targets zero-emissions for all new construction by 2027

Electrifying at least 1 million homes by 2030

  • Author
  • Tom DiChristopher    S&P Global Market Intelligence
  • Editor
  • Richard Rubin
  • Commodity
  • Electric Power Energy Transition Natural Gas

New York Governor Kathy Hochul is throwing her support behind building electrification as part of her administration's climate agenda.

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On Jan. 5, Hochul announced a plan to accelerate the decarbonization and electrification of the Empire State's sprawling building stock, which encompasses 7.3 million households and another 370,000 commercial and institutional buildings. As part of the plan, Hochul intends to introduce legislation to ensure all new construction is zero-emissions by 2027. Hochul also set a target of electrifying at least 1 million homes by 2030 and making up to 1 million electrification-ready by the same year.

"To make real progress on climate change, it's time to tackle major sources of pollution head-on, ensure greener housing is available to all New Yorkers and pave the way toward a more sustainable future," Hochul said in a Jan. 5 statement tied to her State of the State address.

Building electrification gathers momentum

The announcement was the latest sign that New York is aiming for pole position in the building electrification movement. New York City in December 2021 became the largest US city to adopt a new building gas ban.

It also came one week after New York's Climate Action Council released a blueprint for climate policymaking and regulation predicated on widespread building electrification. The platform introduced by Hochul, a Democrat, aligned with several recommendations in the council's draft scoping plan, suggesting that the blueprint may face little resistance from the administration.

Hochul's planned legislation would require all new construction to achieve zero on-site greenhouse gas emissions, including through energy efficiency. It would incorporate into the state construction code New York's legally mandated target to cut economy-wide greenhouse gas emissions by 40% from 1990 levels by 2030 and by at least 85% by 2050. It would make additional changes to the state building and fire code.

The building electrification agenda would seek to increase the current rate of building electrification from 20,000 homes per year to more than 200,000 — roughly in line with the Climate Action Council's post-2030 target. To ensure that more than 800,000 homes to be electrified or made electrification-ready through 2030 are low-to-moderate income households, the state will establish a dedicated fund within a new $25 billion, five-year housing capital plan administered by the New York State Homes and Community Renewal office.

Administration seeks funding amid legislative push

The administration also intends to upgrade New York's appliance efficiency standards, mandate energy benchmarking in large buildings and propose legislation that would end the statutory obligation to serve customers with natural gas. Hochul will direct the New York State Department of Public Service to make sure gas utilities reduce investments in fossil fuel infrastructure and work to cut gas demand — an endeavor that the state utility regulator has already started.

A recently announced $30 million program to speed the development of all-electric homes would help the market prepare for the code changes, the administration said in a policy document. Hochul also plans convene the finance, mortgage and banking industries to marshal private capital in service of the goal. Additionally, the administration intends to launch job training programs to ensure the state's workforce can execute the plan.

The building decarbonization agenda also included expanding a $59 million green schools initiative to more than 1,000 schools in underserved communities. It would also demonstrate virtual power plants comprising solar panels, batteries and other equipment at government buildings. Hochul said the first round of retrofit projects through the state's Empire Building Challenge would include the Empire State Building and two facilities comprising 700 affordable housing units.

As part of Hochul's plan to establish hydrogen hubs, the New York State Energy Research and Development Authority will propose a project to study green hydrogen's use in district heating and cooling. In a blow to gas distributors, the Climate Action Council blueprint envisioned only a backup role for low-carbon fuels like hydrogen and renewable natural gas in building heating.