ENERGY COMMITTEE NEWSLETTER, July 11, 2001
- LEGISLATIVE SESSION ENDS
- "CLEAN ENERGY" BILLS AND EXPANSION OF THE SYSTEMS BENEFITS CHARGE (SBC)
- SYSTEMS BENEFITS CHARGE (SBC)
- INDEPENDENT SYSTEM OPERATOR ESTABLISHES PRICE CAPS
- PUBLIC SERVICE COMMISSION (PSC)
- NEW YORK RANKED HIGHLY ON ENERGY DEREGULATION
- ATHENS POWER PLANT
- FUEL PRICES
The 2000 Legislative session came to a close June 23rd. The end of session saw a number of bills taken up that had a direct impact on the energy industry and the newly deregulated electricity market.
Energy efficient appliances
S.7172A (Morahan) / A. 5302-A (Colman). Requires the state to purchase energy efficient appliances and provides a phase-in schedule. Business Council opposed this bill.
Indian Point 2 Nuclear Power Plant Recovery
A.10096 (Silver) / S.7094 (Velella). Con Ed recovery bill in conjunction with Indian Point 2 nuclear power plant. Passed both Houses. Business Council opposed this bill. The Business Council's President, Dan Walsh, sent a letter to the Governor's Office opposing this bill.
Safety Training / Underground Facilities
S.7511B / A.11357 (Rules). Underground facilities safety training account and training programs, funded by penalties for violations. Passed both Houses.
PILOT payments for nuclear power plants
S.7897A (Wright). Provides for PILOT agreements for nuclear power plants. Passed Senate and referred to Assembly. No Assembly companion. The Business Council supported this bill and testified at the Senate hearing regarding this topic.
Retail Divorcement Legislation oil producers/refiners
S.5110 (Nozzolio) / A.6340 (Abbate). Oil producers / refiners retail divorcement act. Passed Assembly. Died in Senate on third reading. The Business Council opposed this legislation.
A number of bills were introduced into each House of the Legislature this session that pertained to "clean energy" and a utility bill surcharge designed to fund efficiency and conservation measures, research and development, low-income services, and environmental protection. None of these bills passed both Houses but all of them were the subject of end session wrangling and debate surrounding the newly deregulated electricity market. A short summation of each bill and the actions taken on them are as follows:
S.7323B (Marcellino). Establishes a "Clean Energy Fund" supported by a surcharge on electricity bills and NYPA contributions. Also, mandates certain amounts of "clean energy technologies" and limits utility fees in some instances. Senate Energy Committee.
A.8506C (Englebright). Not a same as S.7323B but very similar. Establishes a "Clean Energy Fund" and mandates levels of clean energy technologies by utilities/generation. Funding through mandated surcharge on all electricity bills and NYPA contributions. Assembly Energy Committee.
A.6099C (Tonko). Similar to the above referenced bills. Establishes a "Clean energy initiative" and "Clean Energy Fund Balance" through an expanded Systems Benefits Charge and contributions by NYPA. Limits utility fees, mandates levels of clean energy. Emphasizes switch to alternative energy sources (e.g. solar, wind). Passed Assembly on June 15th and delivered to the Senate.
A.11165 (Brodsky). Another bill which mandates an energy fund through NYPA contributions ($1 billion over ten years). Limits utility fees levied in order to maintain electric reliability, establishes electric plant emission levels, mandates levels of "clean energy technologies". Near the end of session this bill was referred from En Con Committee to Codes in the Assembly.
The Business Council issued memos against two of these bills and has publically opposed all four of these proposals. It is anticipated that these issues will be revisited during the 2001 session. Since the Systems Benefit Charge (SBC) is set to expire June 30, 2001 this topic will be a major focus of The Business Council's Energy Committee.
The Business Council is seeking input from its energy and manufacturing members on the "clean energy" bills that would extend and/or increase the Systems Benefits Charge (SBC) that is due to expire next June. Most of the above referenced bills contain provisions to legislatively extend the SBC for up to ten years.
In a related vein, the Public Service Commission (PSC) will be reviewing the SBC this fall and will, upon recommendations from interested parties, most notably the New York State Energy Research and Development Authority (NYSERDA), determine whether the charge will be continued and if so, at what level. Currently, the rate averages .00078 per kilowatt hour statewide. The PSC established the SBC and incorporated it in the rates for the investor owned utilities two years ago. The Business Council would also like membership feedback on this surcharge. Attached is a small memo outlining the SBC, its mission, and other pertinent information.
The Independent system Operator (ISO), the entity responsible for maintaining New York State's wholesale electricity market has recently capped its bids per megawatt hour and related services at $1,300. Originally, many parties suggested the price of $1,000 but the ISO eventually settled on $1,300 bid price cap. The bid price cap was approved by the ISO's board and sent to FERC for a July 7th implementation. The price cap bid will be in effect due to exigent circumstances until October 28th. FERC has not, as of mid-July, acted on New York's bid cap. The cap figure represents the highest accepted bid that cleared in the day-ahead market (from the inception of the ISO) rounded to the nearest $100. The board accepted the temporary cap in an effort to balance the interests of the wholesale electric suppliers and consumers. Attached is the press release.
The Public Service Commission met on July 19th in Albany. The meeting saw action on two natural gas proposals that were designed to provide more choice and competition in two service territories (Rochester Gas and Electric and Niagara Mohawk).
The Commission also released its response to the new Retail Energy Deregulation Index 2000 (RED). The PSC and its chair, Maureen Helmer, welcomed the report and stated that while transformation to a competitive model [in the energy market] is continuing, the report exhibits the great work that has been done in deregulation in this state. Attached is a copy of the Public Service Commissions press release.
The State of New York has been ranked second in the nation in the area of electrical deregulation according to the Retail Energy Deregulation Index 2000 (RED). The RED index, which uses 18 attributes to measure the market (such as deregulations plans, eligible customers, billing, metering), rates the progress of the states as a whole. New York ranked second behind only Pennsylvania.
The Business Council wrote about New York State's standing in the electricity market as rated by the RED Index in February of this year. At that time New York was rated second in the nation in its deregulation efforts. For more info on the report and the rankings, access the Center for the Advancement of Energy Markets at http://www.caem.org.
The Athens, Greene County power plant is entering its final stages of the permit process. PG & E, has recently received clearance from the Office of Parks and Recreation (in regards to the aesthetics of the proposed plant) and moves to the final stages of the siting process. The company needs final approval by the Army Corps of Engineers. Construction of the plant could take place in the late summer.
As many of you are aware, there continues to be a lot of press surrounding the high prices of fuel most notably gasoline and diesel. Reports are also stating that Natural gas prices may rise. In response to this shift in prices New York Senator Charles Schumer has been advocating the establishment of a federal panel to monitor fuel levels and supply. He has recently released a study and legislation that urges the President to establish a Presidential Energy Commission. I will keep the Energy Committee informed as too the status of this proposal.