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Key provisions of the competing economic development power proposals – S.8065 (Aubertine) / A.11172 (Cahill)

August 11, 2010
Staff Contact: Ken Pokalsky

The table below presents key provisions of the competing economic development power proposals – S.8065 (Aubertine), which is agreed to by Governor Paterson and NYPA, is supported by more than 25 statewide business groups, and which has passed the Senate 59-2; and A.11172, which passed the Assembly 88-47, and which is opposed by the Administration, NYPA and most business groups.

The Business Council strongly supports adoption of S.8065. Our legislative memos in support of S.8065, and in opposition to A.11172, are included following this table.

Please feel free to contact me for additional information, and to discuss any specific components of these proposals.

 

ENERGIZE NY PROGRAM
S.8065 (AUBERTINE/
MAZIARZ)/GOVERNOR’S PROGRAM BILL

POWER SOLUTIONS PROGRAM
A.11172 (CAHILL)

PROGRAM
ADMINISTRATION

  • no change from current law
  • requires UDC chair to be chair of EDPAB
  • expands EDPAB to twelve members, including six legislative appointees
  • EDPAB to develop regulations in consultation with NYPA and UDC
  • requires UDC and DED to assist EDPAB

PROGRAM DESIGN/SIZE/
TIMING

  • new program begins 7/1/2011
  • application process begins by 1/31/2011
  • 910 MW program, with 455 MW of NYPA hydro (current “rural and domestic” power) and a like amount of NYPA purchased power (purchasing thru competitive bidding or other mechanism.).
  • minimum 320 MW set aside for recipients within current R&D service territories
  • minimum 200 MW set aside for new and expanding business
  • up to 100 MW set aside for “small business” and non-profits
  • makes permanent the current “energy cost savings benefit” program
  • 483 MW-equivalent “power solutions” program to replace PfJ beginning 7/1/11
  • at least 100MW set aside for small business/NFPs
  • application process begins 1/1/10
  • NYPA authorized to provide $120 million in annual funding for PSP awards (requires NYPA trustee approval)

PROGRAM TRANSITION

  • existing PfJ, PfJ energy savings reimbursements and ECSB benefits extended thru 6/30/11
  • benefit equivalent to average per kwh benefit for the 12 months ending 5/15/2010
  • current program participants not receiving new benefits  receive 2/3rd of value of current benefits 2011-12; 1/3rd of value of  current benefit 2012-13
  • existing PfJ program extended to 6/30/10
  • current PfJ participants not receiving new PSP contracts receive two year phase-out of benefits, with 2/3 of prior 12 month benefits in 1st year; 1/3 in 2nd year.

BENEFITS

  • allocation of power, with the allocation equal parts NYPA hydro and NYPA purchased power
  • participants can “opt out” of the NYPA purchased power component prior to signing contract with NYPA
  • may include allocation of NYPA power; NYPA-financed energy cost credit; and/or NYPA provided efficiency assistance [NOTE: bill makes no provision for allocation-based award]
  • NYPA-provided energy audit for all PSP and ECSB applicants

CONTRACTS

  • up to seven years; participants can apply for extensions any time within 24 months of contract expiration, or earlier if approved by NYPA
  • requires periodic audits of program participants for compliance with job and investment commitments.
  • allocations may be reduced if participants’ actual metered demand is less than allocation.
  • up to seven years
  • at mid-contract review, in-compliance participants can apply for new contract to commence at end of current contract
  • may require applicant to implement recommendations of NYPA-provided audit (applicant’s audits in prior five years can be considered as sufficient)

ELIGIBILITY

  • all business (excluding retail), including small business defined as normally utilizing minimum peak demand under 400kw
  • non-profit corporations (under NYS NFPC law)
  • current NYPA program participants must be “in substantial compliance with contractual commitments”
  • all business (including small business defined as  normally utilizing minimum peak demand under 400kw
  • non-profit corporations (under NYS NFPC law)

CRITERIA

  • significance of power costs to the facility
  • extent that benefit will result in new investment
  • consistency with state and local development plans
  • jobs and payroll at facility
  • jobs created or retained, and willingness to commit to job targets
  • risk of facility closure or relocation and/or job loss
  • facility’s local economic significance
  • prior energy efficiency investments; willingness to do audits, participate in NYPA efficiency programs or make additional efficiency investments
  • consistency with state energy plan
  • potential competitive disadvantage for other instate business
  • for NFPs, whether they provide “critical services or substantial benefits” to community

For Power Solutions program”

  • significance of power costs to the facility
  • extent that benefit will result in new investment; willingness of applicant to commit to new investments
  • size of applicant’s facility and statewide payroll
  • jobs created or retained, and willingness to commit to job targets
  • risk of facility closure or relocation and/or job loss
  • facility’s local economic significance
  • investments in efficiency, CH&P or DG, and willingness to commit to such investments
  • consistency with state energy plan
  • performance under prior NYPA programs
  • for NFPs, whether they provide “critical services or substantial benefits” to community
  • consistency with state and local development plans
  • support by local government
  • potential competitive disadvantage for other instate business
  • impact of economic conditions on applicant
  • willingness to hire persons under federal Workforce Investment Act

Additional Criteria for ECSB program:

  • investments in efficiency, CH&P or DG, and willingness to commit to such investments

RURAL AND DOMESTIC POWER PROGRAM

  • NYPA funded residential rate subsidy program for current R&D recipients; $100 million in year one, dropping by $14 million per year
  • permanent NYPA financed low income resident rate subsidy programs of $30 million per year after year
  • $8 million/year set aside for current agricultural recipients of R&D power
  • subsidy program funding  requires NYPA trustee approval
  • NYPA to establish energy efficiency program for current R&D customers; reductions in R&D hydro usage can help finance efficiency program and Power Solutions awards.

OTHER PROVISIONS

  • directs NYPA to work with the PSC to recommend reduced utility power delivery costs for program participants
  • extends thru 2011 current tax credit for utilities for net loss of revenues under current PfJ program
  • NYPA to provide mandated energy audits to applicants as condition of award; review efficiency, feasibility of on-site generation
  • Annual NYPA reports to the Governor and legislature on all economic development programs