ENERGY COMMITTEE UPDATE
- Energy Items in Governor's Proposed Budget
- Council Advocates for Indian Point Power Plants
- William Flynn Confirmed as Public Service Commission (PSC) Chairman
- "Below Cost Sales" Vetoed By Governor
Increase fees paid by operators of the six nuclear power reactors
- The Governor is proposing adjusting the fees paid by nuclear electric generating facility operators to support local and State Radiological Emergency Preparedness activities. Paragraph (b) of subdivision 2 of section 29-c of the Executive Law is amended to change the annual fee per nuclear reactor from $550,000 to $950,000. The new revenue will be divided among the State and certain localities pursuant to an existing statutory formula. In 1981, a fee of $250,000 per reactor was set. It was increased to $550,000 in 1994. The fee increase provides a total of $2.4 million in new revenue. Per statutory formula, half of this revenue, or $1.2 million, is provided to the State Emergency Management Office (SEMO) for training and radiological emergency preparedness activities, offsetting costs that would otherwise be supported by the General Fund. The other half of the revenue is divided among specified counties in accordance with the statutory formula (seven counties within a 10-mile radius of a nuclear facility ---- Westchester, Rockland, Oswego, Wayne, Monroe, Orange and Putnam) to support radiological emergency preparedness activities.
Re-authorize the New York Power Authority to make voluntary contributions to the General Fund to fully support the Power for Jobs program in calendar year 2003
- The Governor is proposing changing the funding formula for the "Power for Jobs" program. The proposed changes will not effect the operation of the program at all (i.e recipients, allocation levels, etc). Under the proposal NYPA is to make a payment to the General Fund equal to 100 percent of the gross receipts tax (GRT) credit provided to businesses relating to the Power for Jobs program for SFY 2003-04. It also adds phase five of the program under which an additional 183 megawatts of power, added by Chapter 226 of the Laws of 2002, becomes eligible for inclusion in the voluntary contribution by NYPA.
- NYPA currently is authorized to make a voluntary contribution to the General Fund equal to 50 percent of the GRT credit available each year to all local electric distribution companies relating to phase four of the program up to a cap of $125 million. Chapter 85 of the Laws of 2002 increased NYPA's voluntary contribution limit from 50 percent to 100 percent for SFY 2002-03 only.
- A similar bill was enacted in 2002 that provided for a 100 percent contribution to the General Fund in SFY 2002-03.
- Without this bill, NYPA will only be authorized to make a contribution of 50 percent of the GRT credit relating to Power for Jobs in 2003-04, estimated at $35 million. NYPA intends to make a $58 million contribution to the General Fund, well in excess of the 50 percent limit. This bill provides the authorization to make this contribution while maintaining the $125 million statutory limit.
Authorize certain State agencies to finance their activities with revenues from assessments on public utilities and cable companies
- Provides authorization to certain State agencies to finance their activities with revenues generated from assessments on public utilities and cable television companies. Authorizes certain expenditures of the Department of Health as eligible expenses for cable television assessment revenue and authorizes certain expenditures for the departments of Agriculture and Markets, Economic Development, and Environmental Conservation, the Office of Parks, Recreation and Historical Preservation, the Consumer Protection Board and the Office of Public Security as eligible expenses for utility assessment revenue. Authorize New York State Energy Research and Development Authority to make payments to the General Fund from various sources.
- Authorizes the New York State Energy Research and Development Authority (NYSERDA) to make payments to the General Fund and the environmental conservation special revenue fund.
- Authorizes NYSERDA to make a payment to the General Fund of $1.8 million from interest earnings from the low-level radioactive waste account; payments of $330,000 to the Department of Environmental Conservation's environmental conservation special revenue fund, low-level radioactive waste account from funds rebated to New York from the Federal government and; $913,000 payment to the General Fund from unrestricted corporate funds.
Authorize assessments on utilities to be used for New York State Energy Research and Development Authority research costs
- Provides annual authorization for the New York State Energy Research and Development Authority (NYSERDA) to obtain revenue for certain programs through assessments on gas corporations and electric corporations, pursuant to section 18-a of the Public Service Law.
Increase oil and gas depth fees
- ncreases by over 50 percent oil, gas and solution mining depth permit fees established in the Environmental Conservation Law (ECL) Article 23, Title 19. These fees have not been changed in over 20 years, since they were established in 1981. By increasing permit fees, the regulated oil and gas industry will pay a greater portion of the cost of regulation.
Extend the authorization for the State to recover from the industry the cost of appraising oil and natural gas wells for local property taxation purposes
- Authorizes State recovery of costs associated with the appraising of oil and natural gas wells for local property taxation by continuing charge backs on their owners. Local governments have benefited from these services requiring specialized data and methods. Worth $40,000 annually.
Governor Pataki also chose to continue implementation of the following tax reductions that were previously enacted:
- Reduce the Gross Receipts Tax rate on the commodity portion of gas, electricity, and steam from 0.85% to 0.4% effective 1/1/4.
- Reduce the Gross Receipts Tax rate on the transmission and distribution portion of gas, electricity, and steam for non-residential customers from 1.125% to 0.53125% effective 1/1/4.
- Reduce the Gross Receipts Tax rate on the transmission and distribution portion of gas, electricity, and steam for residential customers from 2.25% to 2.125% effective 1/1/4.
- Reduce the Gas Importation Privilege Tax rate on out-of-State purchases of gas and electricity from 0.85% to 0.4% effective 1/1/4.
- Reduction of the Sales and Use Tax rate on the transmission and distribution of gas and electricity from 1% to 0% effective 9/1/3.
The Business Council, in a February 3rd letter to the James Lee Witt Associates, expressed support for Entergy Nuclear Northeast's continued operation of the Indian Point Energy Center. Entergy owns both Indian Point Nuclear Plants 2 and 3 as well as Plant 1 which has ceased operations. The James Lee Witt report was commissioned by Governor Pataki in 2002 and has been released in draft form. The public comment period on the draft report ends February 7th. The report was critical of the emergency plans surrounding the plant and took issue with many federal mandates surrounding evacuation and planning strategies. However, it should be noted that nothing in the Witt report claims that the plant is unsafe. Entergy has expressed continued interest in working with all interested parties in emergency planning and has spent millions on plant security improvements. Entergy is complying with the federal mandates that govern security and emergency planning at its facilities.
The closing of the plant would result in a loss of almost 2,000 megawatts of electricity severely impacting both price and reliability in the surrounding areas and New York City. As much as 15% to 30% of the New York City power supply is provided by the Indian Point Energy Center. Even if the plant were to be closed, emergency plans would still be needed since fuel and spent fuel rods would still be housed at the site. The only difference would be the loss of critical amounts of electricity from the site. This issue has state and national ramifications since there are 104 nuclear powered generating facilities in the United States who are governed by FEMA and NRC mandates and local and state compliance with them.
Last Friday, January 31st, New York State notified the Federal Government, specifically the Federal Emergency Management Agency (FEMA), that it could not certify the emergency plans for the four counties (Westchester, Rockland, Orange and Putnam) surrounding the Indian Point Nuclear facilities in Buchanan, Westchester County. The state informed FEMA that it could not certify the plans, which are prepared by state, local and plant officials, because the four counties would not certify them. The state is charged with an annual certification that amounts to a "checklist" of items with which localities must comply -- drills, training, emergency plans, evacuation routes, sirens, etc. The state is now looking to the federal government for input. The Nuclear Regulatory Commission (NRC) requires a FEMA-approved plan as a condition of a plant's operating license. NRC has never closed an operating plant against the wishes of the operators of a plant. The federal government, through FEMA, has asked the state to renew its review of the plans and is working to gather more information including the final recommendations of the Witt Report. The Business Council's press release.
William Flynn was appointed by Governor Pataki to head the Public Service Commission on January 4, 2003 and was confirmed by the State Senate on February 4th. Mr. Flynn succeeds the Honorable Maureen O. Helmer who stepped down from the PSC Chairmanship on January 31st. Prior to his appointment, Mr. Flynn served as President of the New York State Energy Research and Development Authority (NYSERDA) and had previously served as Vice President, Treasurer, and Secretary to the Board of NYSERDA.
Mr. Flynn also serves as a member of the State Environmental Board, the New York State Energy Research and Development Authority Board, and the Disaster Preparedness Commission. He also serves on the State Board on Electric Generation Siting and the Environment. Mr. Flynn previously served as First Deputy Attorney General, Chief of Staff, and Special Counsel to State Attorney General, Dennis C. Vacco. In the early 1990s, Mr. Flynn was an Assistant United States Attorney and Executive Assistant in the Western District of New York.
The Public Service Commission regulates the state's electric, gas, steam, telecommunications, and water utilities and oversees the cable industry. The Commission is charged by law with the responsibility for setting rates and ensuring that adequate service is provided by New York's utilities. The staff arm of the Commission is the Department of Public Service. The Commission also exercises jurisdiction over the siting of major gas and electric transmission facilities and has responsibility for ensuring the safety of natural gas and liquid petroleum pipelines. Bipartisan by law since 1970, the Commission consists of up to five members, each appointed by the Governor and confirmed by the State Senate for a term of six years or to complete an unexpired term of a former Commissioner.
The "Motor Fuel Marketing Practices Act", also know as "below cost sales", was vetoed by the Governor as a pocket veto on January 31st. S.4522-B (Nozzolio) / A.1626-C (Tonko) would have established a retail sales system under which the sale of petroleum fuels are regulated along with a correlating penalty system. It provided for a three year sunset. In veto message number 48 of 2002 the Governor stated that he could not approve the bill in its current form. Under the bill, the sale of motor fuel at a price even slightly below cost could constitute a violation. Indeed, it could constitute a violation so long as the effect was to "injure" even a single competitor; notably, the bill does not preclude liability where the extent of the injury to a competitor is relatively minor. The Governor stated that it would have been extremely difficult to determining the cost of motor fuel sold by a particular seller based on the stipulations within the bill and that there may exist better ways to determine and enforce injury to competitors. He ended his message with an invitation to the sponsors to work with his staff on a new version of the bill this session.