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Legislative Memo

Kenneth J. Pokalsky
Senior Director, Government Affairs
T 518.465.7511 x.205
www.bcnys.org

BILL:

A.11522 (Cahill)

Support

SUBJECT:

Temporary "Power Solutions Program"

 

DATE:

June 23, 2010

 

An effective, long term economic development power program is important for New York State, but is absolutely critical for upstate New York whose regional economy is still heavily dependent on energy-intensive manufacturers and the high paying jobs they provide (on average, about $17,000 more per year in salary alone when compared with private sector, non-manufacturing jobs.) 

We greatly appreciate the broad support in both the Assembly and Senate for a long term economic development power program that provides competitively priced electric power and – importantly - the predictability of long term contracts, for energy intensive business that pledge to keep and grow jobs and make new capital and efficiency investments.

However, we believe that A.11522 simply fails to meet this critical economic development objective.  It creates a program supported by NYPA cash, rather than NYPA power, with funding subject to annual approval of the NYPA board of trustees.  In effect, contracts provided to program participants under this bill will be subject to annual reauthorization by NYPA.  Moreover, this legislation creates a program with a duration of just eight years.

The Business Council and twenty-one other business and economic development organizations from across New York State (see attached) support an alternative approach that is also supported by the Administration and has passed the Senate with broad bipartisan support (59 to 2.)

That legislation – S.8065 - creates the permanent “Energize New York” program that will provide energy-intensive business with long term, power allocation-based contracts.  The result will be competitively priced contracts, a high decree of certainty regarding both power allocations and pricing, with provisions for timely contract extensions.

While “Energize New York” is a statewide program, it guarantees that a significant share of the program would be dedicated to support business and jobs in upstate New York, with additional power set aside for economic development and expansion programs.  It also provides significant funding for residential rate relief and for energy price protection for upstate farms.  These provisions were added to this legislation in response to concerns raised by legislators and other interests, in order to achieve a reasonable balance in the reallocation of NYPA resources.

Given the very limited nature of the new “Excelsior” program – with just $50 million per year in new incentives available statewide – and significant new limitations on most business tax credits being given serious consideration in current budget negotiations, New York's ability to support investment and job creation is being seriously eroded.

A long term economic development power program would be an important policy step both to preserve jobs and to encourage new growth and investment in New York, and particularly in upstate New York.
We respectfully believe that the program set forth in A.11522 is simply inadequate for the state's need, and urge the Assembly to consider the alternative approach that has already passed overwhelmingly in the State Senate and that has received broad, statewide business support.