Legislative Memo

T 518.465.7517





Assembly Energy Package



June 5, 2001


The Business Council of New York State has reviewed the above referenced Assembly bills and finds that they fail to properly address the real issues facing the State of New York in regards to energy. In essence, New York State needs to build more power plants. We cannot conserve our way out of our energy supply needs, nor can we ignore the fact that a growing and vibrant economy is fueled by electricity.

This package of bills makes little mention of the need for more generation. Rather, they focus on issues such as artificially capping customer rates (by 25% on the first 200 kilowatts). A similar approach was championed in California until it became apparent that freezing retail rates while mandating that suppliers buy wholesale electricity at fluctuating prices bankrupted its utilities.

These bills would spend millions of dollars from the New York Power Authority (NYPA) and the Long Island Power Authority (LIPA) on conservation and clean energy technologies. This is in addition to the $150 million being spent per year through a Systems Benefit Charge (SBC). While The Business Council fought the extension of the SBC, we realize the proper role of energy conservation and increased energy efficiency. We must also point out, that by NYSERDA's own estimates, the moneys spent on energy conservation under its programs have netted low megawatt savings to date.

This package would do little to increase the actual production of electricity. In fact, the actual production of electricity in any substantive manner is ignored. The bills make many references to universal rates, denying the proper supply and demand activities of the market by mandating that suppliers subsidize ratepayers through intricate rate programs, and insisting on elaborate conservation and energy efficient measures costing hundreds of millions of dollars. This state does not need to be entertaining legislative packages focused on caps, new energy offices, and the re-establishment of studies designed to tell us what we already know; New York needs a significant amount of new generating capacity. New York cannot conserve its way out of this imperative.

Our opposition to most of the Assembly Energy Plan does not include A. 8952 (Gianaris). The need to re-power existing plants is one which must be considered as part of the program to bring new supply aboard.