May 22, 2001
Assembly advances new plan to reregulate energy; Council voices concerns
The Assembly majority has proposed reregulating energy markets in New York State.
At a press conference today, Assembly Speaker Sheldon Silver discussed the New York State Transitional Energy Plan (NYSTEP), an Assembly plan which Speaker Silver said is designed to provide rate relief, consumer protection, and an energy supply that secures economic growth during New York's transition to competitive markets.
"[NYSTEP is] a broad, step-by-step approach to available, affordable, safe and clean energy," Speaker Silver said in a release.
The Business Council noted, however, that the plan would not advance the state's most urgent energy need, which is to add more generating capacity.
Proposal details: NYSTEP would, among other things:
- Mandate a 25 percent cut in the cost of the first 200 kilowatt-hours used each month by residential customers.
- Require utilities to write plans for buying power that limit customers' risks of higher costs, with the additional requirement that utilities not pass additional costs on to customers without prior approval from the state Public Service Commission (PSC).
- Enhance the state's successful Power for Jobs program, under which employers can get reduced-rate power if they promise to use it to create or retain jobs. The Assembly plan would re-direct to this program 400 megawatts of additional generating capacity expected to be created by upgrades scheduled at the Niagara and St. Lawrence hydropower projects.
- Create a new state Institute for Energy, which would help energy technology companies bring new products to market.
- Establish a five-year, $1.5 billon program to support conservation, renewable energy sources, and new energy technologies. Earlier this year, the PSC approved a new $150 million annual energy tax for this purpose.
- Require that members of the PSC be elected. Currently, commissioners are appointed by the Governor subject to Senate confirmation.
- Supplement the Home Energy Assistance Program (HEAP) to help low-income families and seniors pay rising energy costs.
The Business Council's reservations: Business Council President Daniel B. Walsh expressed concerns about the plan, saying it places too little emphasis on "the one issue that's absolutely critical right now: getting more generating capacity on line."
"We need more capacity to avoid the danger of power blackouts this summer. We need more capacity to provide the competition that is our only serious, long-term hope of bringing down costs.
"California tried a legislative 'solution' that packaged all kinds of sound bites on price caps, wind power and all the rest that did everything except add generating capacity. And now California is paying the price," Walsh added.
"New York is too smart to repeat those mistakes."
The case for increasing capacity: Many different parties have have argued that New York State must add more generating capacity and that this should be a top policy priority. These include: the PSCthe PSC); New York's Independent System Operator, a non-profit group that oversees New York's energy transmission grid and energy markets); energy utilities themselves (see, for example); Alfred E. Kahn, former PSC chairman and an internationally recognized expert in deregulation); and New York State Attorney General Eliot Spitzer).