Congratulations, You’ve Won a Higher Electric Bill!
The Wall Street Journal | Opinion | Commentary
NEW YORK, NY — January 31, 2022 – Ever get an offer in the mail that you felt was too good to be true? Residents of Yonkers, New York’s third-largest city, know just how you feel.
In early January, a letter arrived in Yonkers residents’ mailboxes from an outfit called Sustainable Westchester. It could easily have been mistaken for junk were it not for the city’s official seal in the lower right corner and a message in small print: “Please Do Not Discard. Official Notification.” Anyone who didn’t toss the letter in the recycling bin got the following message, framed as unambiguously great news: “The City is pleased to inform you that your household . . . will be automatically switched from the utility’s standard supply into the Westchester Power 100% Renewable supply on your first meter read date after 3/1/2022.”
Publishers Clearing House couldn’t have done better. The catch was buried deep in the fine print: Homeowners who don’t opt out will see an average increase of nearly 19% in the price of electricity, making it more expensive to keep the lights on.
This stealthy price hike—not to mention the sneaky packaging of the official notification—evidently comes with the endorsement of Mayor Mike Spano, a Democrat in his third term. If he thought his constituents would happily volunteer to pay more for electricity, he’d almost certainly have asked them to opt in to this green scheme. It’s likelier that he’s thinking of running for governor someday and looking for ways to demonstrate his environmentalist bona fides to progressive New York state Democrats.
During a decade in City Hall, Mr. Spano has championed green programs like the Green City Leadership Awards and LED streetlights. The latter program shows that being green sometimes pays well, as less-energy-intensive streetlighting saves the city around $1.8 million per year. But unlike the streetlights program, Yonkers residents won’t save with Westchester Power. Last year’s average price for electricity was 7.3 cents a kilowatt hour. Renewable energy from Westchester Power will cost 8.7 cents. Those pennies add up.
Mr. Spano has engineered a scheme to burnish his green credentials and make Yonkers residents pay for it. Using the opt-out approach, the city doesn’t have to bother with persuasion. It can simply gouge those who don’t carefully read every notice they receive from the government—an especially unfair approach to Yonkers’s poorest residents, who already pay electricity rates more than 30% above the state average and almost twice the national average. According to the U.S. Census Bureau, the poverty rate in Yonkers is nearly twice that in the rest of Westchester County. Adding insult to injury, the national economy is experiencing the worst inflation in 40 years.
Anyone who wants to pay more to go green should have that choice. In a properly functioning market, consumers express their preferences through the prices they pay. The opt-in approach places the decision squarely in the hands of the energy consumer. The sneaky opt-out technique ensures that some unwary customers will suffer sticker shock because they didn’t read a letter from the city government.
Mr. Hanley is senior policy analyst at the Empire Center.
Appeared in the January 31, 2022, print edition of The Wall Street Journal