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Government Affairs Albany Update

March 23, 2001

Assembly Passes $6.75 Minimum Wage

On Monday, March 19, 2001, the Assembly passed A. 5132 (Nolan) by a vote of 126 to 20. The bill would increase the state's minimum wage from $5.15 to $6.75 per hour on January 1, 2002 and automatically increase it each year in conjunction with the CPI for New York and Northern New Jersey. A similar bill passed the Assembly last June.

Legislative Proposals on Superfund

Both houses addressed the Governor's superfund proposal in their one-house budget resolutions released this week. Their key recommendations included the following:

The Senate supported a use-based approach to site remediation, as well as a more formal program for voluntary cleanups, while not endorsing the specific language in the Executive Budget. The Senate also endorsed expansion of the superfund program to include hazardous substance sites. The Senate rejected several provisions of the Executive Budget proposal, including new hazardous waste program fee surcharges, increased petroleum tank registration fees and fees imposed for the state's oversight of voluntary cleanup projects. The Senate also rejected the Governor's proposal for new enforcement provisions including "treble damages" and state-level natural resource damage claims. Instead of new fees, the Senate proposed to dedicate existing corporate franchise tax revenues to support the superfund program, and proposed to reduce the Governor's proposed $90 million superfund program by $14 million.

The Assembly rejected the proposed merger of superfund and oil spill accounts; rejected the Governor's proposal for use-based soil cleanup standards; and rejected the proposed increases in oil storage tank registration fees. On the other hand, the Assembly supports the Governor's proposed hazardous waste program fee surcharges.

The Assembly proposes a $62 million superfund account that would be comprised of: $18.4 million in new hazardous waste surcharges, and the redirection of $13 million in existing hazardous waste fees (both actions are part of the Executive Budget proposal), with these revenues to be matched with $31.4 million from the General Fund. The Assembly also proposes another $37.6 million in dedicated general fund revenues that would be placed in a Trust Account, and matched on a one-to-one basis with additional, unspecified, fee income.

The Assembly did not comment directly on the Governor's proposed voluntary cleanup program, but it recommended municipally designated "environmental opportunity zones," which suggests that they would substitute the Governor's voluntary cleanup proposal with the Assembly EOZ bill. The Assembly also endorsed $30 million in unspecified tax relief to support the cleanup and redevelopment of privately-owned brownfield sites.

NYPA New York City Generators

On Thursday, March 22, the Assembly committees on Environmental Conservation; Energy; and Corporations, Authorities and Commissions held a joint hearing on the eleven (11) NYPA generators being installed in New York City and Long Island. Testifying at the Assembly hearing were Eugene Zeltman, President of the NY Power Authority, Maureen O. Helmer, chairman of the state Public Service Commission, and Glen Bruening, executive deputy commissioner of the state Department of Environmental Conservation.

NYPA plans to install 10 of the generators at six sites in New York City and an eleventh on Long Island. NYPA's Eugene Zeltman stated that the plants are needed to help avoid possible electricity shortages in New York City and Long Island this summer. The gas-turbine generators will be the cleanest sources in the city according to NYPA. Additionally, NYPA will invest an additional $50 million for "the express purpose of providing the most advanced available equipment to control air emissions and noise."

Public Service Commission chair Maureen Helmer, testified on the issue as well. She stated that the current conditions in New York necessitate the addition of the approximately 400 megawatts that the turbines will provide. The plants were granted three year permits by the state's Department of Environmental Conservation.

The Assembly hearing centered on the environmental impact of the plants, their locations, and the belief by some members of the Assembly that there is not the dire need for the plants. Also, some Assembly committee members raised concerns over the possibility of having the plants for longer than three years or having them sold.

NYPA maintains that these plants are a stop gap measure to maintain electrical reliability over the next few years. In addition, the plants will emit 400 times less nitrogen oxides, 140 times less particulates and 30 times less sulfur dioxide than many existing facilities with similar generating capacity. The equipment to be installed by NYPA will also reduce carbon monoxide emissions by 75 percent. In addition to installing the new generators, NYPA will continue to expand its energy efficiency programs in New York City.

The Business Council has been in support of the addition of the power plants in order to maintain electricity reliability in New York City and Long Island. NYPA has also been the subject of a lawsuit over some of the locations of the generators. The generators are hoped to be in operation by June 1st. The initial cost was $510 million.

NYISO's Emergency Demand Response Program (EDRP)

The New York Independent System Operator has recently unveiled its Emergency Demand Response Program (EDRP) designed to help participating customers reduce grid demand when electric-capacity constraints could threaten electric service in the state. The EDRP is a voluntary program. It offers financial incentives to participants who lower electricity usage during targeted times of electric-capacity constraints. The EDRP begins May 1, 2001 and runs through October 31, 2001. The program was highlighted at the ISO's conference "Price-Responsive Load Management: A New Opportunity in New York State" in Albany on March 22-23.

The EDRP program, as well as a Zonal Price Capped Load programs and Incentivized Day-Ahead programs are designed to create a portfolio for demand response and demand reductions for the summer of 2001. They were created in response to New York's tightening electricity market and are designed to have end use customers paid for energy they don't consume from the grid.

The Public Service Commission has also been studying this issue under Case 00-E- 2054. They have been working in conjunction with the ISO and the Utilities to match their efforts with the NYISO programs.

In addition to the implementation of this new program, the ISO is working in conjunction with the New York State Energy Research and Development Authority (NYSERDA) through its Peak Load Reduction Program (PON 577-00). Information for this NYSERDA program and a similar one for Distributed Generation Technologies and Combines Heat and Power (PON 536-01) could be of interest to Business Council members, especially large commercials and manufacturers, who are researching various types of generation and electricity consumption solutions/alternatives.

Morelle and Seward Introduce Health Insurance Bill

In a move designed to help alleviate the growing gaps in health insurance coverage in New York State, Assemblyman Joseph Morelle (D-Monroe) and Senator James Seward (R-Otsego), are poised to introduce legislation to help address the affordability and availability of insurance for small businesses.

The bill was proposed by the Chamber Alliance of New York State, and supported by The Business Council, The Retail Council and the Association of Counties. It is designed to reverse the current trend by health insurance providers to eliminate sole proprietors' longstanding access to group-rated insurance coverage. Because most sole proprietorships in New York State purchase their health insurance through local chambers of commerce, they are adversely affected when a health insurance provider decides no longer to offer a group-rated product to the chambers in their service area. Therefore, the state's chambers of commerce have been meeting with the Insurance Department, as well as representatives from the health plans, to devise a solution to the diminishing market for sole proprietors. The Morelle/Seward bill has three components to address the concerns of the chambers of commerce, sole proprietors and health plans with regard those who purchase insurance as a "group-of-one." The bill: Defines chamber of commerce for the purpose of selling health insurance in New York State. Requires regular chamber certification of all businesses that purchase insurance through a chamber of commerce. And amends the Insurance Law to change the definition of "small group" from the current 2-50 employees, to 1-50 employees. For more information about the chamber health insurance legislation, contact your local chamber of commerce.