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TESTIMONY ON ARTICLE X FOR THE ASSEMBLY HEARING ON JUNE 5, 2002

June 4, 2002

Honorable Paul D. Tonko
New York State Assembly
Room 713, Legislative Office building
Albany, New York 12248

Dear Assemblyman Tonko:

RE: Article X Extension

We appreciate the opportunity to submit the following testimony on the Article X process and respectfully ask that it be incorporated into the record at your June 5, 2002 public hearing.

The Business Council of New York State, Inc., whose membership includes over 3,600 companies and more than 100 chambers of commerce and professional trade associations, has been an active advocate for re-authorizing New York's electricity generating siting law. With the pending expiration of Article X of the Public Service Law on December 31, 2002, New York must assure that a successor law is enacted this session.

Our main goals in the re-authorization of Article X include: a five year extension, a streamlining of the review process, and the avoidance of new statutory obstacles to the process.

The legislation cosponsored by you and Senator Wright, which has been endorsed by the New York State AFL-CIO, the state's electricity generating community (the Independent Power Producers) and the investor owned utilities (the Energy Association), provides a balanced approach to renewing the siting law.

The goal of this legislation is to extend the state's electric generating siting law from December 31, 2002 until December 31, 2007. The legislation also seeks to expedite the time frame for the siting of major electric generating facilities while maintaining provisions for public input and insuring proper environmental reviews. The Business Council supports these provisions.

Rather than proposing a wholesale change in the siting law, this bill focuses on improvements to certain areas of the current law and seeks to add provisions that would improve the process. In addressing these areas and adding certain new provisions, such as the inclusion of incentives for the redevelopment of brownfields, the bill strives to create a process conducive to siting much needed electrical generating infrastructure in New York State. The bill's other provisions are as follows;

In New York State, the need for electricity generation to support economic growth and reliability has never been greater. In order to foster growth and encourage economic well being, New York needs to send the proper signals to the marketplace. A reauthorization of the siting law that insures a clear process and definite time frames, while maintaining public participation and environmental safeguards, is needed in order to encourage development in this crucial area of New York's economy.

The New York Independent System Operator (NYISO), in a March 2002 report, stated that New York needs to add at least 7,100 megawatts of new power by 2005 - of which 2,000 to 3,000 megawatts must be located in New York City. Additionally, the NYISO claims that Long Island alone requires the immediate approval of 750 to 1,000 megawatts to alleviate severe reliability risks. In order to facilitate these market improvements, the NYISO also urged the Legislature to renew the Article X siting law. The NYISO further stated that if any changes are made to the law they "should focus on shortening the approval time frame."

The Business Council, in a February 2002 assessment of the electricity markets, determined that at least 9,200 megawatts should be added to the markets by 2007 in order to insure reliability and effective market competition. We concur with the assessments made by the NYISO that the renewal of the siting law would maintain the siting board's momentum.

We have actively followed the Article X process since its inception and have become very familiar with many aspects of the siting process. Since 2001 we have sought and been afforded party status in at least seven cases and spoken at three public hearings in support of projects. The Business Council believes that a re-authorization of the siting law is crucial to ensuring that the generating and investor communities continue to pursue new projects in New York State. A fluid and as seamless as possible transition to a new law that maintains public input and streamlines and delineates time lines for developers needs to be enacted by the Legislature.

Sincerely,
Signed: Daniel B. Walsh