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Government Affairs Albany Update

January 23, 2004

Summary of the Governor's Proposed 2004-2005 Budget

Our staff has compiled a detailed summary - by issue area - of Governor Pataki's proposed 2004-2005 budget. If you have any questions regarding issues in the summary.

PSC Approves Neptune Transmission Line

On January 21, the New York State Public Service Commission (PSC) voted to issue, with conditions, a Certificate of Environmental Compatibility and Public Need to Neptune Regional Transmission System, LLC (Neptune) to construct a 37-mile long, 600 MW direct current electric transmission line that will serve as a new source of electricity for Long Island. The line will deliver electricity from a substation owned by Jersey Central Power and Light in Sayreville, New Jersey, to a converter station and then to a Long Island Power Authority (LIPA) substation in Hempstead, Nassau County.

The Commission voted to approve a joint proposal governing the construction of the line that was developed by the Office of Parks, Recreation and Historic Preservation, the staffs of the Departments of Environmental Conservation and Public Service, and the applicant. No comments in opposition to the proposal were filed during the public comment period. Neptune will need to acquire other permits from the federal government, as well as from New Jersey authorities for the section in that state.

The line will serve the Long Island electricity market by providing an additional source of supply and by increasing the Island's ties with regional markets. The proposed route of the transmission line is consistent with the most recent State Energy Plan, LIPA's draft energy plan, and the Independent System Operator's (ISO) transmission planning for the NYS Bulk Power System.

The submarine portion of the route will be located in an existing transportation corridor, and is not expected to affect wildlife. It will be installed alongside navigation channels and in reviously disturbed areas.

New York City Energy Report - City Needs 2,600 MWs

New York City Mayor Michael Bloomberg announced on January 22nd the findings of an energy report he commissioned in July 2003 to study the electricity supply situation in New York City. The Energy Policy Task Force report concluded that the City will need 2,600 megawatts of new electricity resources by 2008 to ensure continued reliability, promote economic growth and address environmental issues. The recommendations by the New York City Energy Policy Task Force are outlined in the report New York City Energy Policy: An Electricity Resource Roadmap. The recommendations are split into four principal areas: energy supply, distributed resources, energy delivery, and initiatives for New York City agencies.

Just this past week New York Independent System Operator (NYISO), the entity charged with administering the wholesale bulk electricity markets and overseeing the state's transmission grid, reported an all-time record high of 25,262 MWs for winter electricity consumption. Peak electricity demand for New York City in 2003 reached 10,960 megawatts. While the mayor's report claims that New York City currently has adequate generation to satisfy current demand, more resources will be needed in the very near future. The NYISO, as recently as May 2003, has stated that New York State must add at least 5,000-7,000 MWs by 2008. Similarly, The Business Council has also called for the addition of at least 9,000 MWs over the next five years in order to insure reliability and competitive pricing in New York's electricity markets.

The Energy Policy Task Force was chaired by the New York City Economic Development Corporation (EDC) and had sixteen members consisting of leading energy experts in the private, public and nonprofit sectors, as well as representatives of community groups. The mayor reported that the working groups of the Task Force will immediately begin implementing the report's action plan of 28 specific recommendations to ensure future energy needs. The major recommendations of the report include:

Promote increased investment in energy efficiency by supporting policies that enhance overall electric system reliability, lower consumer costs and protect the environment.