ISSUE IN BRIEF:
Article X (Power Plant Siting)
New York business
and industry relies on an affordable and reliable supply of electricity,
and New York State needs significantly more electric generating capacity.
However, New York is not siting and building enough generation to keep
pace with the state's growing demand for power.
The Business Council
believes that re-enactment of a streamlined Article X law for siting
major power plants is an essential step toward meeting the state's long-term
energy needs.
Over the past
several years New York has had to take dramatic actions to meet its growing
power demands. The state's dire need for more electricity has led the
New York Power Authority (NYPA) to place emergency generation in New
York City. The Independent System Operator (ISO) and the New York State
Energy Research and Development Authority (NYSERDA) have instituted peak
load reduction programs to curtail load on high consumption days. While
these stop gap measures have helped avoid brownouts or blackouts, the
key to alleviating shortages of power will continue to be the addition
of base load generation capacity.
In 2001, The Business
Council published The Power To Grow, a report detailing the
adverse impact of a failure to site and build more generation in New
York State. If we fail to site more plants, New York's residential, commercial
and industrial consumers will face shortages, higher prices and risk
having demand exceed supply. We have monitored the power markets over
the last three years and have reaffirmed the need for more in-state generation.
Similar findings have been made by other leading energy and business
groups from around the state.
The ISO has published
a series of reports detailing New York's need to add additional base
load generation. Starting with Power Alert I: New York's Energy
Crossroads (2001), Power
Alert II (2002),
and Power
Alert III (2003),
the ISO has made it very clear that New York's electricity markets would
be improved if more capacity is added. In its May, 2004 report, Power Trends, the ISO specifies that
although approximately 3,000 megawatts of power have been installed in
New York since 2001, several thousand more megawatts are needed to maintain
reliability of the electric system.
Article X: The
first step in the building of new base load generation is the siting
law. The law governing the power plant siting process, Article X of
the Public Service Law, expired on 1/1/03. By allowing this law to expire,
the state sent a clear message to the generation and development community
- New York's legislative/regulatory atmosphere NOT conducive to investment
in generation. With the deregulation of the electric power marketplace,
the economic risk of building new generation no longer falls on the electric
customer. Under the old regulatory system, utilities were responsible
for building enough generation to satisfy their customers' needs, and
the costs were passed along to those customers. Under the new restructured
environment, investors assume all the risks involved, and are thus understandably
hesitant to build in an uncertain legislative/regulatory climate. Generation
companies may instead opt to build in other states that offer public
support and regulatory certainty conducive to billion of dollars in investment.
To date the Legislature has failed to reenact a successor statute.
A renewed effort
needs to be made to insure that New York State sites and builds enough
generation to support its growing electricity needs. The Business Council
supports the enactment of a power plant siting law which provides a streamlined,
one-stop shopping program, as did the expired statute. (Such as S.5536
and S.5673-A from the 2003 - 2004 session.) On the other hand, we will
oppose legislation that imposes costly regulatory and procedural burdens
that make it virtually impossible to site a power plant.
Article VII Improvements: In addition to building more generation, New York needs to provide an
expedited and streamlined process for the reconstruction of existing
transmission facilities in order to increase the transfer capacity of
such facilities.
Transmission constraints
not only result in expensive, ongoing congestion costs, but also inhibit
the ability of the system to support the operation of an efficient, economic
wholesale electricity market.
The Business Council
will work to facilitate the development of electric and natural gas transmission
infrastructure in 2005, including electric transmission and natural gas
pipelines, and liquefied natural gas (LNG) facilities.
