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February 6, 2001

Panel of energy experts emphasizes New York's need to site more power plants

To avoid the kind of energy crisis afflicting California, New York must site more power plants and do so more quickly, a range of experts on energy policy agreed in a seminar on energy issues today.

The discussion was part of a breakfast seminar series sponsored by the Government Law Center of Albany Law School. The other participants in the one-hour discussion were: Barbara S. Brenner, a lawyer specializing in energy issues and a partner in Couch White LLP; Maureen Helmer, chairman of the New York State Public Service Commission (PSC); Gerald Norlander, executive director of the Public Utility Law Project (PULP); and Howard Shapiro, president of the Energy Association of New York State.

The key issues discussed include:

Siting more power plants, faster: Most speakers emphasized that New York needs to site more power plants, and to expedite the process by which plants are approved.

Helmer said the need for more plants is the main lesson New York should take from California's current energy woes. She noted that the state Department of Environmental Conservation (DEC) and the state Public Service Commission (PSC) are both working "hard and fast to get [power plant applications] out the door." Both PSC and DEC play key roles in the plant-siting decision process spelled out in Article 10 of the state's Public Service Law.

How power powers growth: Several speakers cited the link between adding new power plants and future economic growth. We want new businesses to locate in New York, Brenner said, and New York won't be able to do that without an adequate supply of power.

"Even the perception of future power shortages is eroding California's business climate," she noted.

Brenner, Walsh, and Shapiro all noted that companies that apply for power plants in New York typically apply at the same time for plants in other states and countries. The first state or country that sites a plant for this applicant is likeliest to get it; slower government bureaucracies may lose out entirely, they said.

Increasing supply to reduce prices: Several speakers emphasized that New York needs more energy capacity to drive prices down and help competitive energy markets work.

Walsh noted that California, which has not sited a new power plant during many years of booming growth, is embroiled in a crisis rooted in an inadequate supply of power. The state has already spent $400 million to date to buy needed energy, with virtually no chance of recovering that money.

Deregulation: Several speakers said New York's energy concerns have nothing to do with its decision to deregulate or the manner in which it is deregulating. Only Norlander dissented.

"Higher rates and higher prices are a convenient excuse for people who don't want deregulation or want to change the way it's done," Brenner said.

She noted that the New York City consumers would have paid for last summer's spike in energy prices even if New York hadn't begun deregulating. She said New York's key issues are related to the spike in the price of natural gas, which fuels most electricity generating plants in New York.

The need for cooperation among interested parties: Walsh criticized environmental groups that have been vocal opposing any and all power-plant sitings. He noted, for example, that the New York Public Interest Research Group (NYPIRG) had filed suit this week to block the siting of temporary power plants in New York City that are considered essential to meeting that region's needs this summer.