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Government Affairs Albany Update

May 10, 2002

Millennium Pipeline Route Finalized and then Challenged

The Millennium pipeline, a 425-mile natural gas mainline proposed by Columbia Gas Transmission, recede approval for an alternative route from the Mount Vernon City Council on May 6th. The pipeline, which was announced in 1997, was formally approved by the Federal Energy Regulatory Commission (FERC) in December 2001. The pipeline will enter New York State at Lake Erie, traverse the southern tier of New York, and terminate at the Bronx-Westchester border where it will interconnect with the Consolidated Edison system. The plan has been held up for the last 5 months due conditions in the FERC approval that called for a compromise route between the company and local officials in the siting of the last two miles of the pipeline. The company worked with local officials and the city of Mount Vernon to arrive at an alternative route through the city. The last portion of the pipeline will now run under industrial areas of Mount Vernon rather than through residential areas. Columbia hopes to start the construction of the $683 million pipeline next spring.

After receiving approval from the City of Mount Vernon, the pipeline was dealt a set back when New York Secretary of State Randy Daniels announced that he would not permit the high-pressure natural gas line to be built across the Hudson River at Haverstraw Bay as planned. Daniels' approval is required for the project because the state Department of State administers New York's federally required Coastal Management Program. Daniels said dredging the 2.1-mile crossing would disrupt fish and other wildlife in the bay, endanger New York City's drinking water and impair Croton-on-Hudson's plans to revitalize its waterfront.

Columbia Gas Transmission appealed the decision to Secretary of Commerce Don Evans. The Commerce Department approves the state's Coastal Management Program under the Federal Coastal Zone Management Act. Columbia said other possibilities were ruled out when the FERC determined that the Millennium's proposed route had the least environmental impact.

Council Advocates Support for Indian Point

Business Council President Daniel B. Walsh, in a May 1st letter to Mayor Michael Bloomberg, City Council Speaker Gifford Miller, and other City Council members, stated that New York City depends on electricity generated at the Indian Point Energy Center. Closing it without simultaneously increasing New York's generating capacity elsewhere would do irreversible harm to efforts to restore the city's economy. Indian Point currently supplies 2,000 megawatts to the grid, or 20 percent of the electricity used in the New York City area. The letter was written prior to a May 7th hearing by the New York City Council on the status of the Indian Point Energy Center.

New York faces increases in consumption and a decrease in reserve margins, particularly in the load pockets of New York City and Long Island. The state has not seen the addition of a major electric generating facility since the 1980s. The Public Policy Institute, The Business Council's research affiliate has concluded, in a February 2002 report, The Power To Grow, that New York must add at least a dozen new power plants with at least 9,200 megawatts of capacity in the next five years. Other expert organizations, including the New York Independent System Operator (ISO), have reached similar conclusions about New York's capacity shortfall. The ISO has stated that New York City alone needs as much as 3,000 megawatts of new generating capacity by 2005. Currently there is only one project in the construction phase - PG & E's Athens plant.

Heritage Station Power Plant Project Cancelled

On May 9th GE Power Systems and Sithe Energies, Inc. announced that due to difficult market conditions and changes in the energy markets, the development of the Heritage Station power plant near Oswego has been cancelled. The Heritage project, which had all major regulatory approvals, was delayed in December 2001 with the goal of resuming in the spring of 2002. Originally announced in September 1999, Heritage was projected to come on line in 2005 with the capacity to produce 800 megawatts. According to the joint press release from GE and Sithe; "Dramatic changes in the energy markets - linked to the national economic condition - make the project not economically viable at this time". Sithe Energies had also withdrawn its application for its Sentry Station (Torne Valley) power plant project in Ramapo in December 2001. The cancellations, withdrawals, and inactive projects in the Article X siting process now stands at six (6); Caithness, Grassy Point, Oak Point, Twin Tier, Torne Valley and Heritage. There are 18 active projects in various stages. Only one is currently under construction; Athens in Greene County.

Minimum Wage Activity

The Senate minimum wage bill, S.4749 (Spano), is on the Senate Labor Committee agenda for Tuesday, May 14, 2002.
It is expected to be reported. A very similar but not identical bill, A.5132 (Nolan), was passed by the Assembly on April 10, 2002.