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Government Affairs Albany Update - January 3, 2003

New York Gas Group - New England Gas Association to Merge

The New York Gas Group (NYGAS) and the New England Gas Association (NEGA) have announced a merger. The combined association will form the Northeast Gas Association (NGA). NYGAS, formed in 1973, is the New York State gas utility trade association. Its constitutes the ten largest gas utilities in New York State with approximately 4.4 million customers and $5.2 billion in annual natural gas revenues. NEGA, formed in 1926, is a similar organization representing the gas utilities in the six state region of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. The merger is the culmination of an alliance formed in 2001. The first chairman
of the new entity will be Ralph Tedesco, President and COO of the New York State Electric and Gas Corporation (NYSEG). The new president of the NGA will be Thomas Kiley, who, since 2001, has been acting executive director of NYGAS. The new entity will continue to offer its profession services for its members in the areas of; technology research, development and deployment, gas supply planning, education and training, outreach and marketing, and financial and administrative matters. The association will continue to maintain offices in New York City and Needham, Massachusetts.

Energy Update

Legislative Summation
The Governor has acted on a variety of bills that have an impact on the Energy industry. Below is a short list of bills that have been acted on already - or will be over the next 30 days.

Also included is a summation of Senator James Wright's bill to extend Article X of the Public Service Law. That bill passed only the Senate in December.

Petroleum Retail Divorcement
Senate reprint 21000, originally S.5618-A (LaValle)/A.6942-D. Places geographic limitations on the operation of retail service stations of a franchiser of certain refiners or producers without prior consent of such franchised dealers. Also known as retail divorcement. Three year sunset. Passed the Senate on June 20, amended on third reading to concur with Senate amendments and re-passed Assembly on June 25. The Business Council had issued a memo in opposition. The Business Council urged a gubernatorial veto. The bill was vetoed on December 20, 2002. It was veto #32.

"The Energy Consumer Protection Act of 2002"
S.6778-B (Wright)/A.9878-B (Tonko). Places ESCOs under HEFPA. Allows energy service companies (ESCOs) to tell electric and gas transmission utilities to terminate services under certain conditions for certain customers. Signed by the Governor on December 20, 2002 as Chapter 686 of the Laws of 2002.

"Motor Fuel Marketing Practices Act"
Also known as below cost sales. S.4522-B (Nozzolio)/
A.1626-C (Tonko). Establishes a retail sales system under which the sale of petroleum fuels are regulated along with a correlating penalty system. Three year sunset. Passed Senate on June 20; passed Assembly on June 25. The Business Council opposes this legislation. It was delivered to the Governor on December 30, 2002.

"The New York State Rail Infrastructure Investment Act of 2002"
S.7602 (Stafford)/A.11680 (Tokasz). The package was a top priority of The Business Council, the state's railroad and the manufacturing/industrial/energy sectors that depend on rail for service, commodity delivery (such as coal) and transportation. It was passed in the Senate on June 20 and the Assembly on June 25. It was sent to the Governor on December 30, 2002.

Article X
Article X Extension. S. 7597 (Wright). Senate Article X extender; no Assembly companion. A clear extender of Article X for 5 years. Extends from January 1, 2003 until July 1, 2011, the expiration of article 6 of the energy law providing for state energy planning; extends from January 1, 2003 until July 1, 2007, the expiration of article 10 of the public service law providing for the siting of major electric generating facilities and related provisions of law. Passed Senate on December 17, 2002; Referred to Assembly Energy. Without passage by of an agreed upon bill by both House or the passage of extension legislation by Assembly (S.7597), the State's "Siting Law" effectively ended December 31, 2002 at midnight. However, all of the projects already in the application phase will be governed by the Article X law.

The Latest New York Article X Case
TransGas Energy Systems, LLC filed its application for an 1100 Megawatt, natural gas-fired, combined cycle plant in Greenpoint, Williamsburg, Brooklyn on December 24, 2002. This project will be governed by the Article X process since it was filed prior to the expiration of the law.

Sexual Orientation Measure Approved

On December 17, 2002, Governor Pataki signed into law the Sexual Orientation Non-Discrimination Act. This law amends the executive law, the civil rights law and the education law, prohibiting discrimination in employment, housing, public accommodation, education and credit based on sexual orientation, whether actual or perceived. The bill, A. 1971/S. 720, passed the Assembly on February 12, 2002 and the Senate on December 17, 2002. It is effective on January 16, 2003. The Business Council did not take a position on this bill..