New York’s electricity demand is climbing fast, and everyone agrees the state needs more power, but disagreements remain over where it should come from.
The New York Independent System Operator’s 2025 Power Trends Report warns that data centers, artificial intelligence facilities and the push to electrify homes and cars are driving demand higher, while aging power plants are going offline faster than new ones can replace them.
At the center of the debate is the All-Electric Buildings Act, a 2023 law that would ban gas hookups in most new buildings under seven stories starting this year and expanding to all new construction by 2029.
State Assemblyman Phil Palmesano, a Republican representing the 132nd Assembly District, says fossil fuels must remain part of the state’s energy mix.
“We need reliable baseload generation. And natural gas needs to be a part of that mix,” Palmesano said.
Gov. Kathy Hochul agreed to delay implementation of the law in November after gas and construction trade groups filed a federal court challenge and it currently rests with the Second Circuit U.S. Court of Appeals. The law will not be reconsidered until at least September.
Republicans argue that forcing builders to go electric will make an already expensive housing market even worse. Palmesano cited a New York State Builders Association study on the financial impact.
“The New York State Builders Association did a study and said this could increase the cost of construction for new home ownership by up to $25,000,” he said.
Supporters of the mandate say those upfront figures miss the bigger picture. State Assemblywoman Emily Gallagher, a Democrat representing the 50th District, pushed back on the scope of criticism.
“This is only a mandate for brand new buildings and it is only a mandate for certain styles of buildings. This is not about retrofitting buildings,” Gallagher said.
Gallagher also argued that the real obstacle to progress is industry opposition, not the technology itself.
“The main thing between us and renewable energy is the gas and oil industry’s profits. All-electric buildings are already very popular around the world and they are proven to be cheaper and more effective than fossil fuel,” she said.
Proponents also argue that once new all-electric buildings are up and running, the savings are real. A report from the nonprofit think tank Switchbox estimated families in new all-electric homes could save more than $1,000 a year compared to gas-heated homes.
Republicans counter that long-term savings do not help businesses and families struggling with costs right now. Palmesano warned the state’s energy policy is driving businesses away.
“When you talk to businesses, they care about two things when it comes to energy policy — affordability and reliability. They can’t get affordable and reliable energy in New York. They will go elsewhere, as they already are,” Palmesano said.
Gallagher argued that continued delays are themselves costly.
“The fact that we are delaying the renewable energy renaissance over and over again means that we are actually ultimately paying more,” she said.
Palmesano said speed should not be the priority.
“It’s not important to be first. It’s important to do it right,” he said.
The state continues to defend the law in court while the clock ticks on New York’s 2030 clean energy targets and on a power grid that experts say cannot afford to wait much longer.