Legislative Memo


S.5673 (Wright)



Siting of major electricity generating facilities



June 18, 2003


The Business Council of New York State, Inc. has reviewed the above referenced legislation and supports it enactment. This legislation would amend the Public Service Law in relation to the siting of major electric generating facilities and the State Energy Law governing the compilation of the state energy plan.

With the expiration of the Article X on December 31, 2002 the State of New York has been without a program to expedite the review of major electricity generating facilities. This situation sends the wrong message to the markets and developers that New York is not a favorable place to construct base load generation, thereby discouraging investment in New York at a time when the energy markets have slowed and investment capital is limited.

The re-authorization of a siting law under S. 5673 is a first step in encouraging major electricity generating infrastructure in New York State. By re-authorizing the law, New York is stating that we have a regulatory framework in place that encourages the siting of generation under a siting law consistent with that aim. S.5673 maintains many of the provisions of the lapsed Article X law thus showing a continuity in New York State.

Specifically, S. 5673 would maintain the 80 megawatt level under which projects would be governed by the process. The law would maintain the level of intervener funding at $300,000 for a project while allocating $50,000 for interveners in the preliminary stages in order to study the impact of the project. S. 5673 maintains the broad participation procedures established under Article X and encourages a open and informative public process under which the certification of the project is deliberated.

Further, the legislation maintains the provisions that made Article X one of the most comprehensive power plant siting laws in the country: an application phase; a public comment period; the granting of party status to interested constituents; an ongoing examination of a myriad of issues (environmental, traffic, visual, etc.) related to the project and a detailed summation of impacts – all prior to the certification of the project. S.5673 is a balanced approach towards insuring New York has a law in place governing the construction of needed electricity generating facilities.

As New York enters into the summer months when the state historically reaches its highest period of electricity consumption, New York would be remiss if it were to fail to re-authorize a siting law. Failure to enact a law is tantamount to ignoring future energy needs, especially when financial markets become more conducive to investment in energy projects. By failing to put in place a law governing the siting of power plants New York runs the risk of running headlong into future energy shortages by discouraging investment in the years prior to tighter electricity margins. With consumption growing each year and infrastructure remaining stagnant, simple mathematics exhibits the growing gap between the power we have on-line and the power increasingly demanded by New York's consumers.

The New York Independent System Operator (ISO) has stated that the state needs to increase in-state capacity by upwards of 5,000 megawatts over the next five years in order to avoid serious shortages with a majority being required in downstate regions. These concerns have been amplified by several leading energy organizations in New York State including the Independent Power Producers (IPPNY) and the Energy Association as well as The Business Council of New York State, Inc. Without more base load generation, the load pocket areas of New York City and Long Island, who already exist on slim margins in meeting the reserve requirements [under the rules established by the New York State Reliability Council (NYSRC)], could face blackouts or brownouts in the near future. New York is lagging in the area of building generation and has experienced an increase of only about 900 megawatts whereas our neighbors in New England have installed almost 4,500 megawatts in recent years. Clearly, more needs to be done in the area of building power plants - the first step being the reestablishment of the law governing this process.

For the above mentioned reason, The Business Council strongly supports S.5673 and urges its adoption.