Energy Committee Newsletter, February 22, 2001
ENERGY
EAST - ROCHESTER GAS & ELECTRIC MERGER
On February 20th Energy East (the parent company of New York State
Electric and Gas) and RGS Energy Group (the parent of Rochester Gas
and Electric) announced a $1.4 billion merger agreement. Both boards
unanimously approved the plan. Approval of the shareholders of both
companies is needed for the merger. Approval by the New York State Public
Service Commission is anticipated within the next 12 months.
The merger will create a combined natural gas and electricity service
territory with nearly 3 million customers covering half of upstate New
York.
Under the terms of the merger, RGS Energy will become a wholly owned
subsidiary of Energy East. The headquarters of RGS Energy, RG &
E, and NYSEG will be in Rochester. Operating headquarters for NYSEG
will remain in Binghamton.
ENERGY PANEL EMPHASIZES NEW YORK'S NEED TO SITE
MORE POWER PLANTS
To avoid the kind of energy crisis afflicting California, New York
must site more power plants and do so quickly, a range of experts on
energy policy agreed in a seminar on energy issues held on February
5th.
The discussion was part of a breakfast seminar series
sponsored by the Government Law Center of Albany Law School. The participants
in the one-hour discussion were: Daniel B. Walsh, president and CEO
of The Business Council of New York State, Inc.; Barbara S. Brenner,
a lawyer specializing in energy issues and a partner in Couch White
LLP; Maureen Helmer, chairman of the New York State Public Service Commission
(PSC); Gerald Norlander, executive director of the Public Utility Law
Project (PULP); and Howard Shapiro, president of the Energy Association
of New York State.
The key issues discussed included:
Siting more power plants, faster: Most speakers emphasized that
New York needs to site more power plants, and to expedite the process
by which plants are approved. Helmer said the need for more plants is
the main lesson New York should take from California's current energy
woes. She noted that the state Department of Environmental Conservation
(DEC) and the state Public Service Commission (PSC) are both working
"hard and fast to get [power plant applications] out the door."
Both PSC and DEC play key roles in the plant-siting decision process
spelled out in Article 10 of the state's Public Service Law.
How power powers growth: Several speakers cited the link between
adding new power plants and future economic growth. We want new businesses
to locate in New York, Brenner said, and New York won't be able to do
that without an adequate supply of power. "Even the perception
of future power shortages is eroding California's business climate,"
she noted. Brenner, Walsh, and Shapiro all noted that companies that
apply for power plants in New York typically apply at the same time
for plants in other states and countries. The first state or country
that sites a plant for this applicant is likeliest to get it; slower
government bureaucracies may lose out entirely, they said.
Increasing supply to reduce prices: Several speakers emphasized
that New York needs more energy capacity to drive prices down and help
competitive energy markets work.
Walsh noted that California, which has not sited a new power plant
during many years of booming growth, is embroiled in a crisis rooted
in an inadequate supply of power. The state has already spent $400 million
to date to buy needed energy, with virtually no chance of recovering
that money.
Deregulation: Several speakers said New York's energy concerns
have nothing to do with its decision to deregulate or the manner in
which it is regulating. Only Norlander dissented.
"Higher rates and higher prices are a convenient excuse for people
who don't want deregulation or want to change the way it's done,"
Brenner said.
She noted that the New York City consumers would have paid for last
summer's spike in energy prices even if New York hadn't begun deregulating.
She said New York's key issues are related to the spike in the price
of natural gas, which fuels most electricity generating plants in New
York.
The need for cooperation among interested parties: Walsh criticized
environmental groups that have been vocally opposing any and all power-plant
sitings. He noted, for example, that the New York Public Interest Research
Group (NYPIRG) had filed suit this week to block the siting of temporary
power
plants in New York City that are considered essential to
meeting that region's needs this summer.
GOVERNOR NAMES OGS COMMISSIONER SEYMOUR TO NYPA
BOARD
The New York Power Authority board, down to four board members with
the retirement of "Rapp" Rappleyea, will see the addition
of the Office of General Services Commissioner Joseph Seymour. NYPA
trustees are appointed by the governor with the advice and consent of
the senate. The trustees elect one of their number to serve as the chair.
In his press release announcing the appointment, the Governor expressed
interest in having Seymour appointed Chair of the Authority.
NYSERDA RELEASES SBC PROPOSED OPERATING PLAN
On February 15th the New York State Energy Research Development Authority
(NYSERDA) released its Proposed Operating Plan for New York Energy $mart
Programs (2001-2006). The report outlines the objectives of the program,
the uses of the funds raised under the second phase of the Systems Benefits
Charge (SBC), and the process of evaluation for the program.
The report provides a background of the program, the Energy $mart goals,
and breaks down the overall scope of the SBC funded programs into four
categories, each containing several sub-sections.
The report can be found on NYSERDA's web page; http://www.nyserda.org/ntis.html.
NYPA's NEW YORK CITY GENERATORS SUBJECT OF LAWSUITS
During the first week in February, two lawsuits were filed in New York
State Supreme Court arguing that the New York Power Authority should
not be allowed to site 10 temporary generators in New York City. The
plants are scheduled to be in operation by the summer.
One lawsuit was filed by a movie company in order to block the siting
near its Queens studio location.
The second lawsuit was filed by a coalition of 11 groups represented
by the New York Lawyers for the Public Interest and the New York Public
Interest Research Group (NYPIRG). The groups claim that the generators
threaten neighborhoods and the city's environment.
The New York Power Authority, which is in the process of installing
the generators, has done reviews showing that the plants will have no
long-term impacts on neighborhoods nor will they harm air quality. The
plants, which will add upwards of 400 MW, are being sited by NYPA in
order to help avoid a shortage of electricity in the New York City load
pocket. In a statement NYPA stated that a delay in siting the plants
"will push New York City one day closer to California."
GROSS RECEIPTS TAX
At the last meeting of the Energy Committee we discussed the issue
of expediting the phase out of the Gross Receipts Tax and the Natural
Gas Import Privilege tax. In its letter to the Governor regarding 30
day amendments to the Executive Budget, The Business Council has suggested
the inclusion of the GRT speed-up in the budget. Also, in The Business
Council's testimony before the Assembly Ways & Means and Senate
Finance Committees, the Council advocated for a "speed up reduction
and repeal" of the tax. We also urged for the Legislature to enact
Assemblyman's Faso's proposal (A.3113) to repeal the GRT entirely this
year.
PUBLIC SERVICE COMMISSION MEETING
The Public Service Commission (PSC) met on Thursday, February 22, 2001
at 10 am in Albany.
The Commission discussed several items that affected Consolidated Edison.
These included:
99M0851 - Joint Petition for an Order that Con Edison Cease closing
Customer Service Offices and Re-open Customer Service Office Already
Closed. The Commission determined that it required certain customer
service centers in New York City and Westchester County.
99E0930 - Con Edison: Proposal to Investigate the 7/6/99 Power Outage
of Washington Heights Network and the correlating tariff revisions associated
with the event.
The Next meeting the of the PSC will be on March 28th in Albany.
THE BUSINESS COUNCIL'S UPDATED ENERGY PAGE
This newsletter, as well as other Business Council energy issues, can
be found on the web. The web site for The Business Council is; http://www.bcnys.org
Once you are on the home page go to "Inside the Business Council"
and click on "Councils & Committees". Under committees
click on Energy. http://www.bcnys.org/inside/engycom.htm
The page has undergone some upgrades and modifications. With the help
of our webmaster, Linda Costello, users of the page can view last year's
newsletters as well as current issues. We have also added several links
to the page so users can access related sites in the energy industry
quickly and easily. If you have a minute take a look!
Also, the Key Contacts list on the Energy Page has been updated for
the 2001 session. The list provides information on the "who"
and "where" in the energy departments of the various legislative
offices and state agencies.
NEXT MEETING
The Business Council's next Energy Committee will be on
May 21st, 1:30-3pm in the lower level conference room of The Business
Council's offices at 152 Washington Ave.
Notices will be sent out several weeks prior to the meeting.
