The Business Council's Energy Committee Meeting
November 14, 2001
- Welcome and introductions made by Michael Rose of National Fuel Gas, Energy Committee Chairman.
Legislative update. A legislative update was given by Johnny
Evers of The Business Council.
have been a number of legislative issues we have continued
to watch over the past several months.
Cuts. The first item of interest to the committee was
the issue of tax cuts and the phase out of taxes that
The Business Council had championed during past Legislative
sessions. There have been articles in the press mentioning
a possible roll back of tax cuts and a general concern
that the repeal and phase out of the gross receipts tax
and natural gas import privilege tax (GIPT) (and others) may not be fully implemented in the future. The same topic had been discussed at The Business Council's Issues Conference held on November 13th. The Business Council is firm in its efforts not to have the tax cuts achieved in previous years rolled back. This will continue to be a priority of the Energy Committee as well.
- S. 5778 (Wright) / A.9425 (Tonko). Requires the consideration of facility water cooling during the expedited consideration of applications under Article X of the public service law. This bill is a further amendment to Article X and Chapter 222 (S. 5443 (Wright) / A.8952 (Gianaris)) that was also passed this year. Chapter 222 expedited the siting process under Article X by 6 months provided the repowering project was to reduce emissions by 75%.
The Business Council expressed strong reservations to the Legislature and the Governor's Office about amending the Article X law by mandating certain criteria such as those mandated under S.5778/A.9425. The committee then decided to briefly discuss the other items on the agenda before returning to the topic of Article X for a lengthy discussion of the bills mentioned above, the law itself, and situations that may arise next year due to the law's scheduled expiration on January 1, 2003.
Gas Import Tax (GIPT) Litigation/Legislation. Rich Schwarz
of The Business Council, briefed the committee on the legislation
effecting the GIPT. The Governor signed into law S.5824/A.9458
and S.5828/A.9459 as chapters 382 and 383 respectively on
October 29, 2001.
Of interest to the Energy Committee was the creation of a credit against the Gas Importation Privilege Tax (Section 189); this newly established credit was made retroactive to August 1, 1991 in order to foil the Court of Appeal'sfinding in Tennessee Gas Pipeline v. Urbach. Therein, the Court found Section 189 to be unconstitutional on its face due to the theoretical possibility of gas importers being taxed at a higher rate than the rate on in-State gas purchasers. The new credit was set equal to the Section 186 Gross Receipts Tax rate in effect (Note: the Section 186 rate was 0.75% until January 1, 2000 when it was repealed.) and is only available to gas importers who actually paid a Section 186-like tax to another state. Since no other state had a Section 186-like tax, the retroactive credit costs New York nothing, but, if accepted by the Court, it would prevent some $75 million of potential refunds to taxpayers who before January 1, 2000 imported gas for use within New York. Besides the retroactivity issue, the legislation did not address the period of October 1, 1998 through December 31, 1999 (Tennessee Gas Pipeline v. Urbach dealt with a five-year period ending in 1996) when the GIPT rate on out-of-State purchasers was 4.25%, while the instate combined rate of Sections 186 and 186-a was 4.0%.
The following update has been added to keep the committee informed as to the status of two bills that have yet to be sent to the Governor:
- S.4318 (Velella) / A. 7698-B (Rivera P) - Prompt Payment bill. The Business Council has already written a letter in opposition to these bills to the Governor's Office urging a veto when it is sent to him. The bill has yet to be transmitted to the Governor.
- S.3386-B (Balboni) / A.5352-B (Grannis) - Outdoor Lighting bill. The Business Council has written a letter in opposition to these bills to the Governor. The bills provide for stringent outdoor lighting standards, penalties for breaking these standards, the establishment of "dark spaces"in the State, and the codification of the term "light trespass".
3. The State Energy Plan (SEP).
The timetable for the State Energy Plan was discussed by the Committee. NYSERDA had informed The Business Council of the following timetable that has been mailed to the entire Committee:
In January 2002 the staffs of the State Energy Planning Board will host a technical briefing in Albany for those interested in the efforts to date on the SEP. The state agencies involved (by statute) in developing the SEP are the departments of Public Service, Environmental Conservation, Transportation, Economic Development and NYSERDA. As noted above, NYSERDA serves as the coordinating agency for the State Energy Planning Board.
After the technical briefing by NYSERDA and those agencies actively working on the SEP there will be a series of public hearing throughout the state in February and March. By statute, the State Energy Planning Board must hold at least three (3) public hearings. NYSERDA plans to hold eight (8) public hearings in seven different locations across the state. New York City will have two hearings. By statute, there must also be at least one members from the Planning Board present at each hearing. NYSERDA states that in addition to staff, they will have their Board representative at each hearing to receive input.
A public comment period on the SEP will commence simultaneously with the public hearings (February-March). During that time NYSERDA will accept written comments on the SEP from interested parties.
NYSERDA and the staffs of the departments involved in the preparation of the SEP will submit their draft project to the State Energy Planning Board in May or June for review. The Board will then review it prior to the adoption of a final report in June. The final SEP will be released to the public after the Board adopts it in June.
Other members of the committee stated that they have been informed that a draft SEP may be available some time in December 2001.
The Business Council intends to be an active participant in the process. Once schedules are finalized the Energy Committee will be notified.
4. The Business Council's Intervener Project.
The Business Council has been actively pursuing intervener status in a number of Article X power plant siting cases. The Council has been granted party status in the Bethlehem and Brookhaven cases and has submitted applications in the Wawayanda (Orange County) and Orion Power Astoria (Queens). We have also been following closely the applications in all 23 publically announced Article X cases.
The Business Council made a public statement on October 17th in support of the Bethlehem Energy Center (BEC) and the state's need to add almost 10,000 MW in order to insure reliability and competition in the wholesale electricity market. A copy of the Public Policy Institute report was handed out to the committee and has been posted on the committee's web page.
The Council will continue to follow the Article X process in order to add a statewide voice in favor of additional generation.
5. Discussion of the Article X Law.
The Committee had a lengthy discussion of the Article X law and next steps in the process.
A copy of the Article X of the Public Service Law was included in the meeting packet. The discussion was started with the expiration date of the law - January 1, 2003. In essence, next year will be the year in which a renewal of the law, or of a law addressing the siting of major electricity generating facilities, should or would take place if it were to be in place once the current law expires.
The following topics were discussed by the Committee in the context of the Article X Law:
- The grandfathering of projects once they are formally in the process when the law expires.
- The issues of environmental permitting and DEC's role in implementing federal standards. This will include changes to standards and issues not yet addressed such as Particulate Matter (PM 2.5), Best Technology Available (BTA), and other federally delegated initiatives.
- The impact of the SEP on the law's renewal or alteration.
- The use of intervener funding in a new law.
- Water issues.
- The impact of the amendments to the law this year in the context of future versions of the law.
- The danger of the establishment of a "triage approach" to cases entering the queue. In other words, having an outside entity screen projects for fast tracking based on certain standards not generally accepted.
- Having trade offs set the standards for different sections of the law which then creates an unworkable siting law.
The Committee decided that it would be in the best interest to the industries comprising The Business Council that a coordinated effort be pursued by the Energy Committee. Several members from the generating community stated that their trade association was looking at the Article X law very carefully. They extended the invitation to The Business Council to study the issue with them. This was generally accepted by the Committee. The issues above were expounded upon by the members as key points to be watched and resolved. It was mentioned by many that the "big"picture be preserved - the need for, and the encouragement of, the development of additional generation in the State.
In response to the first issue which was discussed by the Committee the following answer was transmitted to The Business Council from Ms. Brenner later in the day on November 14th:
"Following today's Energy Committee meeting, I looked at the statutory notes for Article X. The statutory notes state that Article X will remain operative and continue in full force and effect with regard to applications filed on or before December 31, 2002. Thus, the potential problem we discussed at the Energy Committee meeting this morning, namely that applications filed prior to the expiration date of Article X would not be protected, is not a problem."
The Committee stated that a main thrust in the Article X process will be trying to keep intact many of the positive aspects of the law such as the ability to override certain zoning restrictions and the understood provision in the law that the need for additional generation is in the public need (by supplying the product to the wholesale market).
The Business Council's Energy Committee will work closely with the membership in order to insure the best possible siting law in order to insure a streamlined process by which developers can build generation and supply the wholesale market with a source of reliable electricity.
6. The 2002 Legislative Program was discussed by the committee and a new document was drafted. It is attached.
7. Open Discussion.
The representatives of the New York Independent System Operator (ISO) stated to the Energy Committee that the figures being published in the press regarding electricity surpluses in New York City, due to the loss of demand in the areas around ground zero, were exaggerated. The initial losses in demand in that area was approximately 100 to 150MW and not in a range high enough to merit a reevaluation of the electricity needs of NYC. In other words, more generation is still needed in the zones in and around NY City to continue reliability and competitive pricing. The ISO stated they will have revised figures later this year.
Power for Jobs was discussed. The Business Council's Manufacturing Council and Economic Development Council will be taking the lead on this issue. Research by the staff member responsible for those committees has found that there are approximately 36 Members of The Business Council who fall into the category of year 2 of the Power for Jobs program.
8. Adjournment. Next year's meeting schedule. Chairman Mike Rose announced that the committee will meet sometime in February or March 2002 but would meet sooner if a situation arises that merits the Committee's immediate attention.