Energy Committee Update
January 5, 2012

Staff Contact: Darren Suarez

State of the State

Governor Andrew M. Cuomo, in Albany outlined his priorities for this year in his State of the State (SOS) address on Wednesday, January 4, 2012. The full address can be found on the governor’s office’s website.

The Governor began the speech with an overview of the accomplishments from last year’s legislative session including Recharge New York, Article Ten, and on-bill financing.

Strengthen Our Energy Infrastructure with an “Energy Highway” System to Power New York’s Economic Growth

The Governor spoke about the need to develop an “Energy Highway” to get excess of generation capacity and tremendous wind power potential in Upstate and Western New York and north of the border in Quebec to meet the tremendous energy needs Downstate.

The administration will be issuing a request for proposals to implement a master plan to power our needs for the next half-century. We believe private companies will finance and build $2 billion in infrastructure to complete the system and build the capacity to supply New Yorkers.

The Governor included the material below in his written comments but were not in his public address.

Invest in Solar While Protecting Ratepayers

The written comments expressed the need to focus more attention on exploiting our solar potential, but to do it with “an eye firmly on cost.”  The SOS explicitly states, “certain approaches that have been proposed do not meet both goals of expanding production of solar energy and protecting the ratepayer.”

The Governor is proposing to increase competitive procurement of large, commercial sized solar projects and expand rebate programs for residential and commercial small-to-medium systems.

The NY-Sun Initiative will be capable of doubling the customer-sited photovoltaic capacity that was installed in 2011 and by 2013, will quadruple the 2011 capacity.

Master Plan for Energy Efficiency in State Facilities

The SOS proposes developing a master plan for accelerating energy-saving improvements in state facilities. The plan will call for substantial investment in cost-effective energy efficiency measures in state buildings over the next four years.

DEC Proposes Regulations to Meet the Power NY Act of 2011 Requirements

The Department of Environmental Conservation (DEC) is proposing to adopt a new 6 NYCRR Part 251, CO2 Performance Standards for Major Electric Generating Facilities, and revisions to 6 NYCRR Part 200, General Provisions. The proposed Part 251 will establish carbon dioxide (CO2) emission standards for new major electric generating facilities (defined as facilities that have a generating capacity of at least 25 megawatts (MW)), and for increases in capacity of at least 25 MW at existing electric generating facilities. The revisions to Part 200 incorporate references to federal rules.

The DEC also proposes to adopt a new Part 487, Analyzing Environmental Justice Issues in Siting of Major Electric Generating Facilities Pursuant to Public Service Law Article 10. The proposed Part 487 will establish the regulatory framework for undertaking an analysis of environmental justice issues associated with the siting of a major electric generating facility, including the evaluation of significant and adverse disproportionate environmental impacts, if any, which may result from the facility’s construction or operation.

Hearings for the proposed regulations described above will be held as follows and are scheduled in places that are reasonably accessible to persons with impaired mobility:

Date: Monday, March 5, 2012
Time: 3:00 p.m.
Location: NYSDEC, 625 Broadway, Public Assembly Room 129, Albany, NY  12233
Date: Tuesday, March 6, 2012
Time: 3:00 p.m.
Location: NYSDPS, 90 Church Street, 4th Floor, New York, NY  10007
Date: Thursday, March 8, 2012
Time: 3:00 p.m.
Location: NYSDEC Region 9 Hearing Room, 270 Michigan Avenue, Buffalo, NY 14203


DEC will conduct a public information session regarding Part 487 for one hour prior to each of the public hearings listed in this Notice. During these sessions, DEC staff will entertain questions from the public concerning Part 487 only. Each public information session will commence at 2:00 p.m. and end at 3:00 p.m. These sessions are intended to be informal and will not be part of the official hearing record. Any comments that the public wishes to be included in the record should be submitted during the official public hearing, or by mail or email at the address listed below.

Requests for information and comments related to Part 251 may be obtained from Michael Jennings, NYSDEC Division of Air Resources, 625 Broadway, Albany, NY 12233-3254, telephone: (518) 402-8403, or email: 251GHG@gw.dec.state.ny.us. Written statements may be submitted to the Department at the above address, until 5:00 p.m., Thursday, March 15, 2012.

Requests for information and comments related to Part 487 may be obtained from Melvin Norris, NYSDEC Office of Environmental Justice, 625 Broadway, Albany, NY 12233-1500, telephone: (518) 402-8556, or email:EJcomments@gw.dec.state.ny.us. Written statements may be submitted to the Department at the above address, until 5:00 p.m., Thursday, March 15, 2012.

EPA's Final Utility MACT Rule

On December 21, the United States Environmental Protection Agency (EPA) issued the Mercury and Air Toxics Standards, intended to reduce power plant emissions of mercury, arsenic, acid gas, nickel, selenium, and cyanide. The standards will reduce emissions of these pollutants by relying on widely available, proven pollution controls that are already in use at more than half of the nation’s coal-fired power plants.

By EPA’s own estimate, this rule is the most expensive in its history and it has the potential to have significant impacts on energy consumers.

The EPA claims that for every dollar spent to reduce pollution from power plants, the American public will see up to $9 in health benefits. The total health and economic benefits of this standard are estimated to be as much as $90 billion annually. Additionally, the EPA and advocates for the legislation Anne E. Smith, of NERA Economic Consulting contends thatEPA’s argument that there is a strong cost-benefit justification for the Proposed Rule is inappropriate because it is based solely on a preponderance of co-benefits from a pollutant that is already regulated, and not an air toxic. Moreover, the estimate is almost entirely derived from changes in very low concentrations that EPA has deemed adequately protect the public health.”

David Kreutzer of the Heritage Foundation provides a very apt illustration of the failures of EPA’s analysis of the Utility MACT rule using a linear-dose response, because existing mercury and particulate levels are more analogous to stepping off a six-inch curb than a 50-foot cliff.

Suppose a study examined accidents in which four people each fell a distance of 50 feet. If two of the four died, the prediction of what is called a linear-dose response is that for every 200 feet that a population falls, two people will die. This would be averaged out among the population and the distance of falling. For instance, this linear-dose response would predict that for every 400 people who step off a six-inch curb, two will die from the impact. A cost-benefit calculation using this assumption would show that even a small city would save thousands of lives per day by cutting down all curbs. Though stepping out into street may be dangerous for other reasons, dropping down six inches is not the cause of any fatalities. Nor would eliminating curbs reduce any of the other dangers of stepping into the street.

EPA's final Utility MACT rule will not affect New York State in a similar manner to other States for a number of reasons including New York’s power generation mix and the State’s previous efforts to curb power generation emissions.

Water Withdrawal

The DEC will be accepting comments on the changes to water withdrawal regulations found in 6 NYCRR Parts 601 and 621 until January 22, 2012. The Business Council will be developing comments based upon membership input.

The proposed water withdrawal regulations will repeal the existing 6 NYCRR Part 601 entirely and adopt a new Part 601. These regulations seek to harmonize elements of the existing Part 601 with the water withdrawal bill (A.5318-A/ S.3798) signed into law by Governor Cuomo on August 15, 2011.

The purpose of Part 601 is to regulate the use of New York's water resources pursuant to the ECL by implementing a permitting, registration and reporting program for water withdrawals equaling or exceeding a threshold volume of 100,000 gallons per day. This Part also implements New York's commitment under the Great Lakes-St. Lawrence River Basin Water Resources Compact to create a regulatory program for water withdrawals in the Great Lakes Basin.

There are several statutory exemptions to the permit requirement. The proposed regulations add more exemptions.

For existing water withdrawal systems that are not exempt and that are above the size threshold as of February 15, 2012, an "initial permit" process is provided, which is somewhat less costly and time-consuming than the standard permit process and provides additional time to comply depending on the capacity of the water withdrawal system. To take advantage of the initial permit process, existing withdrawals must be properly reported by February 15, 2012.