New York manufacturers have reason for optimism this National Manufacturing Month, but there is more work to be done.
According to the Fed’s latest Empire State Manufacturing Survey. Manufacturing activity continued to grow in September, employment increased, and businesses have a positive outlook about the months ahead. But manufacturers also face mounting pressure that threatens that momentum — the cost of energy chief among them. And it’s often our state’s policy decisions, such as pursuing onerous climate regulations and mandates, that are driving energy prices higher.
Manufacturing Month may be an opportunity to celebrate the makers and builders around us, but it’s also a chance to ask what Hudson Valley manufacturers need. If New York wants
to produce lasting investment and sustain good-paying manufacturing jobs, we have to prioritize energy affordability. If we don’t, we risk undoing the economic progress manufacturers have worked so hard to build.
We can ignore NY manufacturers' impact on our state economy
This risk is becoming increasingly hard to ignore. An August report from the Empire Center found that New York has the third-highest electricity prices in the nation, over 62% higher than the national average. Worse, prices continue to climb, rising 1.6% since April and 12.1% over the past year alone.
That’s disastrous for manufacturers because energy affects everything we do. It powers our equipment, our heating and cooling systems, and our ventilation. And when utility costs rise, margins get tighter. Here in the Hudson Valley, manufacturers are already feeling that pressure.
One local manufacturer recently explained that higher energy costs increased the price of everything from packaging to ingredients to parts. Money that could’ve been spent to improve capital, hire and train new employees, or strengthen operations instead gets allocated — quite literally — toward keeping the lights on.
Manufacturers often have to raise prices to cover the shortfall, increasing the cost of everyday goods and worsening New York’s already notoriously high cost of living. But it’s never as simple as just passing along energy costs. Many manufacturers compete for contracts against companies across the country. Raising prices in New York just makes the Empire State a less attractive investment. Contracts flow elsewhere, and we lose business — all because energy in our state is too expensive.
That is why energy costs must be treated as a manufacturing and economic development issue. We can’t expect to create new manufacturing opportunities while making it harder for the companies already here to compete and grow. Fixing the problem, then, means making New York energy more affordable. Unfortunately, several proposals in Albany would accomplish precisely the opposite.
Legislative programs like the Climate Leadership and Community Protection Act, the Climate Superfund Act and the Cap-and-Invest Program purport to address climate issues, but in practice, they’ve only worsened New York’s energy cost crisis, making the Empire State even less attractive to prospective businesses.
Another looming legislative threat is the Hudson Valley Power Authority Act, a bill proposed in the New York State Legislature that would replace Central Hudson Gas & Electric Corporation with a state-owned power company. Handing the government control of something as essential as electricity would subject decisions about rates, infrastructure, and reliability to yet another layer of bureaucracy. And that bureaucracy would undoubtedly raise costs.
Albany must focus on lowering costs
The path forward for New York lawmakers isn’t to seize control of energy and utility companies; it’s to champion policies that will lower energy costs and reduce New Yorkers' monthly bills. Albany should focus on practical steps to lower costs, maintain adequate supply, and modernize energy infrastructure so that New York’s small- and midsize manufacturers are positioned to succeed.
Hudson Valley manufacturers want to invest here, hire here, and build their futures here. New York’s energy policy should give them the confidence to do so. A durable energy strategy must recognize a simple truth: when energy becomes unaffordable, manufacturers — and the workers and communities that depend on them — pay the price.We can’t let that happen.
Harold King is the CEO of the Council of Industry, the manufacturers' association of Hudson Valley.
This article originally appeared on Rockland/Westchester Journal News: NY manufacturers need affordable energy. Albany must act | Opinion
