Lawmakers question wetland regulations

Marie French and Mona Zhang

February 2, 2026

Affordable Energy

Originally published in Politico on February 2, 2026 .

GRAPPLING WITH DATA CENTERS — POLITICO’s Marie J. French: Democratic lawmakers in New York want to play a bigger role in regulating massive data centers to support artificial intelligence.

Gov. Kathy Hochul has previously hailed the potential benefits of New York taking the lead on artificial intelligence. But amid rising energy costs and reliability issues, the potential for huge new data centers — which largely do not yet exist in New York — has spurred concern across the country.

NEW YORK PUSHES BACK ON CONSTITUTION — E&E News’ Carlos Anchondo: New York Gov. Kathy Hochul and pipeline operator Williams Cos. are headed for a collision over a state-issued water quality permit for the planned Constitution gas pipeline.

In December, Oklahoma-based Williams filed a petition with the Federal Energy Regulatory Commission asking it to reissue a certificate for construction and operation of the Constitution pipeline. Williams previously canceled the pipeline in 2020.

ENERGY COSTS IN FOCUS: Democratic and Republican lawmakers alike grilled Gov. Kathy Hochul’s officials, particularly the chair of the state’s utility regulator, over high energy costs during the budget hearing Wednesday. Lawmakers seemed dissatisfied with the governor’s incremental proposals to address the issue.

Some of the most aggressive exchanges came from Democratic senators who have previously slammed the Public Service Commission for rate increases.

Sen. James Skoufis, who last year called for eliminating the commission and firing all the commissioners, said he, all his colleagues and the public would give the commission an “F” for protecting ratepayers. Skoufis has been an antagonist of the Hochul administration, raising hackles within her staff.

PSC Chair Rory Christian seemed emboldened to push back on Skoufis’ aggressive questioning. Skoufis opened by saying he’d “engaged” with a number of utility CEOs who mocked the commission’s rate-setting process. “Utility company executives — privately, but openly — mock the PSC process,” the Democratic senator from Orange County said. “You all allow for that mockery to occur.”

“I have a concern about your statement that you’re collaborating with utility executives?” Christian asked, drawing scattered laughter in the hearing room. Skoufis was undeterred and harshly criticized the PSC’s performance. Christian later told Skoufis that he clearly didn’t understand utility regulation. “I can tell you don’t want to answer the question,” Skoufis shot back.

Christian defended the commission’s process and said the allowed return on equity for New York utilities — which the companies must manage their costs to earn — remain among the lowest in the nation. Republican lawmakers pushed for consideration of eliminating some of the state’s clean energy programs and redirecting those funds for bill relief, highlighting their antipathy toward the state’s climate law.

Christian was also pressed by Democratic Sen. Shelley Mayer, the chair of the Education Committee who has taken on the issue of utility profits. “Nothing personal but that agency is not serving my constituents,” Mayer said ahead of the hearing. She said she’s optimistic this will be the year for major, structural changes aimed at tackling utility costs. “We need significant change,” Mayer said. “An affordability index is not enough.”

The governor has proposed an affordability index for utilities that could be used to trigger limits on executive compensation and a review of spending. High energy costs and concerns about utility bills from constituents are clearly driving heightened scrutiny of the PSC’s role from lawmakers. Other states are also grappling with this issue and energy costs helped propel Democrats to the governor’s office in New Jersey and Virginia last year.

New Jersey Gov. Mikie Sherrill, a Democrat, signed an executive order during her inauguration seeking to shift funds to cushion residents from rising energy costs and directing exploration of her promised rate freeze by the utility regulator there.

“We’re looking at how they plan to do that, and trying to understand what impact those approaches would have on our current energy efficiency and renewable energy programs,” Christian said. — Marie J. French

LAWMAKERS DIVIDED ON HOCHUL PROPOSALS — POLITICO’s Marie J. French and Mona Zhang: Some lawmakers expressed concerns about Gov. Kathy Hochul’s proposals on water infrastructure and permitting changes aimed at spurring more affordable housing during a marathon budget hearing Wednesday.

TACKLING AFFORDABILITY — POLITICO’s Marie J. French: New York residents frustrated by rising utility bills are putting pressure on state officials to address the kitchen-table affordability issue.

Gov. Kathy Hochul has responded with a package of measures targeting utilities, including scrutinizing the paychecks of top executives and changes to how rates are set. While some consumer advocates and environmentalists say they welcome the affordability focus, they’re largely skeptical the proposals will address the major drivers of utility costs.

“This is optics over impact and most of this stuff is fiddling around the edges,” said Chris Casey, the Natural Resources Defense Council’s New York utility regulatory director.

DOE WAIVES RULES FOR NY — POLITICO’s Mona Zhang: The U.S. Department of Energy issued an emergency order Monday night to shore up New York’s grid in the wake of Winter Storm Fern.

The order waives pollution rules, allowing power generators to run at maximum capacity if needed for reliability, regardless of air quality standards and other permitting requirements.

GATEWAY FUNDING CRISIS — POLITICO’s Ry Rivard: Construction on the nation’s largest public works project will pause early this month unless the Trump administration releases money it has held up since last fall, according to a person close to the project granted anonymity to discuss a sensitive matter.

NY APPROVES RGGI PLAN — POLITICO’s Mona Zhang: NYSERDA approved a spending plan for revenues from the regional carbon trading program for power plant emissions that includes 10 states. The plan for the next three fiscal years focuses on reducing energy costs for consumers, as well as developing large-scale wind and nuclear generation.