Officials are expected to put the finishing touches on the 2023-24 state budget this weekend, including finalizing programs to protect the environment and satisfy the state's strict benchmarks to fight climate change.

Gov. Kathy Hochul announced a tentative budget framework in the Capitol on Thursday night with few details.

The state will fund $500 million to build clean water infrastructure, and will ban natural gas hookups in new homes and buildings in the coming years as part of the state's Climate Act to reduce its emissions 40% by 2030. 

Hochul's Cap-and-Invest program would limit the state's annual greenhouse gas emissions and require businesses to buy credits from the state to contribute to those pollutants and ease the burden on taxpayers. The money would be used for renewable energy projects and consumer rebates as the program would simultaneously lead to increased gas prices and home heating costs.

"What we're doing is setting up a mechanism to be able to allow for rebates that will be generated with a Cap-and-Invest program, and we think that is an important first step because we couldn't do it under existing law," Hochul said Thursday. "We'll be working out the details on Cap-and-Invest, which will literally generate billions of dollars to help New Yorkers offset the costs of transitioning to a new form of energy, which when it happens, ultimately the cost of energy will be less."

The governor proposed for one-third of the money to go to the Climate Action Fund for rebates and the state Energy Research and Development Authority to receive the remaining 67% for tax incentives and clean energy programs.

The Senate's one-house budget proposed safeguards for how that money is spent, ensuring reinvestment in low-income communities struggling most with higher energy costs, and that all industries participate.

It's unclear if those protections will be part of the program included in the final budget.

Assemblywoman Anna Kelles, who sits on the chamber's Environmental Conservation Committee, is fighting for a Cap-and-Invest program with guardrails so the money is used to invest in renewable energy infrastructure and transition away from burning fossil fuels. 

The state Department of Environmental Conservation must define an energy-intensive industry and sets a ceiling and floor on the greenhouse gas emissions that companies will purchase.

"I think it's important that we have an auction each year so that we can really work towards meeting our climate goals as established in law," Kelles said Friday. "There [must be] clear guardrails that will ensure that all industries participate and that we have protections on how how high and low the allowances go, and that in emergencies, we will have allowances that we can distribute out to protect industries if there's any crisis that happens."

Negotiations surrounding Cap-and-Invest must continue, the assemblywoman said, until an agreement is reached on a program with the appropriate protections.

Advocates agree the best program would prohibit industries from trading their credits and from not participating.

Republican lawmakers and upstate Democrats continue to push for solutions to address how New Yorkers will afford the state's aggressive climate policies and other consequences.

"If you do this wrong, and people are facing big increases in the cost of transportation and housing, there's going to be public anger that could easily derail the program," said Blair Horner, New York Public Interest Research Group's executive director.

Hochul on Thursday said the final budget will require zero-emission buildings under seven stories to be built after Dec. 31, 2025, and others by Dec. 31, 2028. It only applies to new construction and does not affect existing buildings.

The provision includes exemptions for emergency backup and standby power, manufacturing facilities, commercial food establishments, laboratories, car washes, laundromats, hospitals, crematoriums, agricultural buildings and critical infrastructure, according to the governor's office.

Provisions also remain on the budget negotiating table to finalize the governor's subtler version of the Build Public Renewables Act, which would require the New York Power Authority to provide only renewable energy and power to customers.

"Building on NYPA's success with transmission development, the conceptual budget allows NYPA to expand its renewable portfolio by working on its own and with private sector renewable energy developers to accelerate activity and support the state's clean energy goals," Katy Zielinski, Hochul's spokeswoman, said in a statement. 

Officials continue to debate requiring the state Power Authority to evaluate the capacity and reliability of New York's electric grid.

"The thing is they already do that on a regular basis," Kelles said. "So to hold the [electrification of buildings] movement forward for another round of reliability testing would be both duplicative and unnecessary. So I'm hoping that that section was pulled out. I am absolutely fine, of course, with as many reliability tests as we need, but not to have action and movement forward dependent on the addition of duplicative reliability tests."

Further details remain unclear without specific budget legislation to review. Bills are expected to be printed early next week.

"There's a lack of any information," Horner said. "All we have is what the governor said. ... There's a whole bunch of details that we still don't know, that the public doesn't know, and it's the public's money."

The missing pieces of the budget continue to be finalized this weekend, including details of funding to crack down on illegal cannabis dispensaries and areas of the state's fiscal plan for health and mental health.

But the Cap-and-Invest program remains the highest priority to button up environmental spending.

"If we don't have this, it will be very hard to get the collective industries that use high amounts of greenhouse gases or high amounts of greenhouse gases to reach our goals," Kelles said. "This is the biggest piece, and really foundational, to how we will meet our climate goals."

Other climate measures not included in the budget will remain legislative priorities this session, such as the NY Home Energy Affordable Transition Act, or NY HEAT, taken out of the budget to end the requirement for utility companies to hook up new buildings to natural gas lines, the Climate Change Superfund Act to create a $30 billion fund for large coal, oil and gas companies to pay for statewide environmental upgrades.

Lawmakers will also prioritize sustained investments for water infrastructure improvements and aid to address harmful algal blooms affecting wildlife in the Finger Lakes and on the coast.