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Energy Committee Newsletter

Staff Contact: Ken Pokalsky

Energy Committee Newsletter


NEW YORK ISO RELEASES ELECTRICITY "WHITE PAPER"

The New York Independent System Operator (ISO) released its report on the state of New York’s electric capacity needs on March 14th. The ISO states that their report; Power Alert: New York’s Energy Crossroads, is the "most authoritative and detailed report yet published on New York State's electric capacity needs".

In the report the ISO calls for State approval of 4,000-5,000 megawatts of new generating capacity to avoid "serious electricity shortages, improve air quality, continue New York's economic growth, and avert strong upward pressure on prices". It concludes with; "If we fail to act, and end up in a dire situation like California, then we only have ourselves to blame".

The report states that 2,000-3,000 of the 4,000-5,000 megawatts needed should be located in New York City.

The figures are based on the increasing electricity needs of New York. The ISO claims that between 1995-2000 demand has risen 2,700 MW while generation has increased only 1,060 MW.
Also, by 2005 prices could be expected to increase by 14% if no new generation is added. Conversely, if the state adds 8,600 MW, prices can be expected to go down 20-25%.

The report also states that with new generation, air emissions will go down by 28% for SO2 and 43% for Nox due to the retirement of older, dirtier plants.
Four key recommendations were proposed by the ISO in the report;

  1. A streamlining of the article X power plant siting law by establishing a single point of accountability for meeting the state’s statutory deadlines.
  2. An acceleration of customer options including conservation, real-time metering, and price-sensitive load programs.
  3. An upgrade in transmission infrastructure.
  4. Support for an integrated Northeast electrical market.

For a copy of the press release and report go to the ISO web page;

http://www.nyiso.com

SCHIMMINGER GROSS RECEIPTS TAX BILL

Assemblyman Robin Schimminger (D-Erie) is urging the complete elimination of the state's gross receipts tax (GRT) on
electricity and natural gas and other energy taxes, effective this year.

Schimminger, chairman of the Assembly Committee on
Economic Development, Job Creation, Commerce and Industry, said his bill would save residential and business customers $450 million a year. The bill is expected to be introduced next week.

"New York businesses and families pay among the highest energy rates in the nation, and utility bills climbed even higher this winter," he said. "It's critical that we attack these costs as quickly as possible."

Accelerating the repeal of the GRT on energy is a Business Council priority this year.

Last year, lawmakers repealed the GRT on manufacturers effective immediately. The legislature also repealed, with a five-year phase-in, the GRT on commercial businesses and the gas import tax on natural gas bought out of state for in-state use. And the legislature enacted a cut in the GRT on residential gas and electric service that will approximately halve that tax over five years.

Schimminger said his proposal is "quicker and better." His goal is to make effective by next January both his new proposed elimination of the residential GRT as well as already enacted tax cuts being phased in between now and 2005.

Schimminger also would repeal, by September, the sales tax on transmission and delivery of unbundled gas and electricity to
business and residential customers. This tax is scheduled to be phased out over three years. And his bill would convert the existing partial exemption from the petroleum business tax on
heating oil used for nonresidential purposes to a total exemption, effective in September.

The Assembly Minority has also argued for energy-tax relief. On February 5, Assembly Republicans offered three floor amendments designed to cut energy taxes. These proposals would have fully and immediately eliminated the energy gross receipts tax, suspended local sales taxes on residential energy sources for 60 days, and abolished the Petroleum Business Tax. The amendments were defeated. Assembly Minority Leaders John Faso has also introduced legislation (A.3113) that would eliminate the GRT effective January 1, 2001.

NYPA NEW YORK CITY GENERATORS UPDATE

The New York Power Authority is continuing efforts to install their 10 small, natural gas-fired generators at six sites in New York City. The Authority has encountered some legal opposition but they are continuing their building efforts.

The power plants are aimed to help generate in-city electricity which will help satisfy consumption demands within the city load pocket. The Public Service Commission, the Independent System Operator, and
the NYS Energy Planning Board have stated that more capacity is needed to avert shortages this summer. With time constraints, only the temporary, small, gas turbines, can be ready in time.

NYPA is spending an additional $5 million on each unit to provide the most advanced environmental controls in an effort to reduce air emissions and noise. These plants will therefore be the cleanest power plants in the New York City.

INDEPENDENT POWER PRODUCERS NAME NEW EXECUTIVE DIRECTOR

The Independent Power Producers of New York have named Gavin Donohue as its Executive Director effective April 1st. Currently he is the Acting Commissioner of the NYS Department of Environmental Conservation. Prior to his current position he had served as Executive Deputy Commissioner at DEC and Assistant Commissioner of DEC. He has also served as a research analyst with the New York State Council on Health Care Financing and as an Assistant Secretary to Governor Pataki.

The Independent Power Producers of New York, Inc. (IPPNY) is a trade association representing more than 100 companies involved in the development of generation facilities and the production of electricity. IPPNY members produce approximately 64% of New York State’s electrical power.

ENERGY ASSOCIATION TO HOST FORUM

The Energy Association of New York will host a forum entitled “Powering New York’s Future”. It will be held on March 21st at 8:30am at Chancellor’s Hall, State Education Building. The forum will have a key note speaker; Alfred Kahn of Cornell University and a panel of seven business, industry and labor experts. Among those on the panel will be The Business Council’s Chairman of the Board, William Allyn of Welch Allyn Ventures and former Business Council Board Chairman Eugene McGrath, Chairman and CEO of Consolidated Edison. For more information contact Anne Van Buren at the Energy Association at (518) 449-3440.

PUBLIC SERVICE COMMISSION

The next meeting of the Public Service Commission (PSC) will be on March 28th in Albany.