Energy Committee Update
April 1, 2010
Staff Contact: Darren Suarez
- Local GRT Increase – Last week, both houses rejected the Executive Budget proposal for increased city and village gross receipts taxes on energy and telecommunications utilities from one to three percent – the Senate in its budget resolution, and the Assembly by omitting it in their one house budget bills. Depending on what municipalities responded to this new authority, it could have resulted in local GRT increases of up to $140 million per year (see S.6606/A.9706, Part HH; our memo in opposition is available here.)
- Proposed Elimination of ESCO Sales Tax Exemption – The Assembly’s one-house budget/revenue bill included a proposal to eliminate the sale tax exemption for services provided through energy service companies (see A.9710-B, Part P, page 37, line 31). The state’s most recent tax expenditure report estimates the impact of the state-level sales tax exemption to be $150 million in 2009. The Business Council has opposed this proposal; our memo in opposition is available here. We urge ESCO customers to weigh in on this proposal with their local legislators.
There are now four separate bills to create a long term replacement for the Power for Jobs and Economic Development Power programs; the Administration has issued a program bill, and Senator Aubertine, Senator Maziarz and Assemblyman Cahill have all introduced separate proposals.
Based on input to date, we believe the Administration’s proposal is the best framework for legislative negotiations. The Administration is attempting to include this issue in the ongoing budget negotiations.
The bills share several basic components:
- they would redeploy so-called “rural and domestic” hydropower, albeit over different schedules;
- they create a permanent replacement program;
- they offer longer term (7 year) contract durations, with varying provisions to allow for extensions during the contract period;
- they share some of the same criteria including job creation and retention; size and value of payroll and benefits at the facility; capital and efficiency investments; significance of energy costs to the facility; and others.
Please feel free to contact m for further details, or to discuss these legislative proposals.
Earlier this month, NYSERDA’s board approved revisions to their “RGGI Operating Plan,” which guides the spending of $446 million in projected proceeds from RGGI CO2 allowance sales over the next three years. The plan summary is available here; a complete revise operating plan will be posted by June.
The major change in the adopted plan, compared to NYSERDA’s December 2009 draft revision, is that a $12 million allocation for an industrial energy efficiency program was eliminated, and replaced with a $15 million industrial sector “greenhouse gas reduction” competitive grant program. NYSERDA says that it will likely to issue an RFP for this program by June 2010.
Compared to the initial operating plan adopted in April 2009, this final plan had its overall funding reduced from $525 million to $301 million, and included a dramatic shift of funding to residential programs at the expense of industrial and commercial programs.