On Dec. 16, 2025, the New York State Energy Planning Board voted to adopt the 2025 New York State Energy Plan, a comprehensive policy document intended to guide statewide energy planning and decision-making through 2040 (the State Energy Plan or the Plan). The State Energy Plan provides a long-term assessment of New York’s energy system and outlines strategic priorities for electricity generation, transmission, fuels, demand growth, reliability, affordability and emissions reductions across the economy.
New York’s Energy Law requires the State Energy Planning Board to adopt a comprehensive State Energy Plan every four years, with biennial updates in between planning cycles. Despite this statutory schedule, the newly adopted Plan is the first State Energy Plan finalized since 2015, marking the first full update to the State’s integrated energy planning framework in nearly a decade.
The adoption of the State Energy Plan comes amid continued efforts by New York State to meet the goals of the Climate Leadership and Community Protection Act (CLCPA), which establishes some of the most ambitious clean energy and emissions reduction targets in the nation. Among other mandates, the CLCPA requires a 40 percent reduction in statewide greenhouse gas emissions from 1990 levels by 2030, a zero-emission electricity system by 2040 and 70 percent renewable electricity generation by 2030. These statutory targets form the backbone of New York’s climate and energy policy framework and inform the planning assumptions underlying the State Energy Plan.
At the same time, progress toward the CLCPA’s targets has been made increasingly challenging by concerns over affordability and system reliability. The Plan acknowledges rising energy costs, inflationary pressures, supply-chain disruptions and federal policy uncertainty as factors complicating the pace and cost of clean energy deployment. Against that backdrop, the Plan places an emphasis on maintaining reliability and moderating cost impacts for ratepayers, which are considerations that appear to have shaped several of the Plan’s policy directions and modeling outcomes, even where they create tension with the CLCPA’s statutory timelines.
What is in New York’s Energy Plan?
At its core, the State Energy Plan is a forward-looking planning document intended to inform, but not dictate, future regulatory, legislative and investment decisions across New York’s energy system. To do so, the Plan relies on a scenario-based modeling framework designed to test how different combinations of policies, technologies and market conditions could shape the State’s energy mix, emissions trajectory, costs, and reliability through 2040. The Plan evaluates outcomes relative to a “No Action” reference case and focuses primarily on two policy-relevant scenarios: a “Current Policies” scenario reflecting progress under enacted State and local laws, and an “Additional Action” scenario reflecting further acceleration of clean energy deployment through a mix of future policies and investments. While the Plan also models more aggressive “Net Zero” scenarios, the Additional Action scenario is explicitly identified as the State’s core planning case.
The Additional Action scenario assumes continued deployment of clean energy technologies beyond what is currently required by statute, while also incorporating constraints related to cost, siting, supply chains and federal policy uncertainty. Importantly, each planning scenario includes variants reflecting differing assumptions about the amount of new nuclear generation and intrastate transmission capacity that could be developed through 2040, underscoring the Plan’s recognition that infrastructure feasibility will materially shape policy outcomes. Taken together, the scenarios are intended to frame the range of policy choices facing the State, rather than to commit agencies to any single regulatory pathway.
Under the Additional Action scenario, the Plan projects substantial additions of zero-emission generation by 2040, including approximately 28 gigawatts of solar, 6 gigawatts of onshore wind, 5 to 7 gigawatts of offshore wind and 2 to 3 gigawatts of new nuclear capacity. Notably, however, the projected offshore wind buildout falls below the CLCPA’s statutory target of 9 gigawatts by 2035, reflecting delays associated with federal permitting, supply-chain constraints, and project economics.
Consistent with that emphasis on reliability, the Plan also contemplates the continued role of combustion-based generation during the transition period to a zero-emission electricity system. Specifically, the Plan anticipates the need for “new or repowered” combustion unit capacity to maintain statewide system reliability, including approximately 3 gigawatts of repowered capacity in New York City by 2035, driven in part by delayed offshore wind development and reliability needs in constrained load centers. While the Plan frames this capacity as transitional and reliability-driven, its inclusion reflects a pragmatic acknowledgment that gas-fired resources may remain necessary in certain regions and timeframes, notwithstanding the State’s long-term decarbonization goals.
From an emissions perspective, the Plan candidly acknowledges that neither the Current Policies nor the Additional Action scenario achieves the CLCPA’s 40 percent greenhouse gas reduction target by 2030 under its statutory accounting methodology. Under Current Policies, the 40 percent reduction is projected to be reached in 2038, while the Additional Action scenario reaches that threshold in 2037 — seven to eight years after the statutory deadline. The Plan notes, however, that under the conventional United Nations Framework Convention on Climate Change accounting framework used by several other states, the Additional Action scenario would achieve a 40 percent reduction by 2030, highlighting the significance of accounting methodology in assessing compliance with statutory targets.
Cost Considerations in New York’s Energy Plan
The Plan also places significant emphasis on the cost implications of different policy pathways. Relative to the No Action case, the Additional Action scenario is projected to increase annual system-wide energy costs by approximately 3 percent in the near term, rising to 13 percent by 2040, reflecting increased investment in clean-energy generation, transmission, storage and electrification. By contrast, the more aggressive Net Zero scenarios are substantially more expensive, with costs exceeding 35 percent above No Action by 2040, reinforcing the Plan’s framing of Additional Action as a balance between ambition and affordability.
Despite those cost increases, the Plan projects that the Additional Action scenario would deliver significant net societal benefits, including approximately $6 billion in net benefits by 2030 and $18 billion by 2040, driven by avoided fuel costs, public health benefits and emissions reductions. These benefit-cost findings are used throughout the Plan to justify a continued, but moderated, pace of clean-energy deployment relative to more aggressive decarbonization scenarios.
Projected Growth in New York Electricity Demand
Finally, the Plan underscores that all policy pathways are being evaluated against a backdrop of rapidly growing electricity demand. Specifically, the Plan’s “Pathways Analysis” projects a 24 percent increase in annual electricity demand and a 21 percent increase in peak demand by 2040 relative to 2025, driven primarily by large new commercial and industrial loads and widespread electrification of buildings and transportation. This anticipated load growth features prominently in the Plan’s emphasis on transmission expansion, firm capacity, and flexible resources, and frames many of the tradeoffs reflected in the State’s approach to meeting CLCPA objectives.
How the State Energy Plan and subsequent statewide energy planning and decision-making will ultimately align with the CLCPA objectives, which themselves may be subject to future amendment, remains to be seen. What is clear, however, is that the Plan signals a shift in New York State’s energy policy toward a greater emphasis on cost and reliability, particularly where existing CLCPA mandates appear unattainable without imposing excessive costs or risking reliability shortfalls. While the CLCPA remains binding law, the State Energy Plan will play an influential role in shaping future policy decisions and investment priorities as New York continues to make progress toward its decarbonization and clean-energy goals.
Our Energy Industry Team is tracking developments with the plan and will report out important developments. If you have questions about the State Energy Plan or related matters, please reach out to attorney John T. McManus at (518) 701-2734 and jmcmanus@harrisbeachmurtha.com; attorney Joshua Schneider at (518) 701-2744 and jschneider@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York state in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains, as well as in Boston, Massachusetts, and Newark, New Jersey.
