NEWS RELEASE

SURVEY: BUSINESSES FEAR ENERGY SHORTAGES WILL HURT GROWTH;
THEY SAY MORE POWER, NOT MORE REGULATION, IS NEEDED

ALBANY— Businesses fear that uncertainty about the supply and cost of energy in New York may undermine their growth and the state's economy, a new survey by The Public Policy Institute of New York State shows.

Respondents said siting more power plants - and doing so more quickly - is the best way to ease concerns about energy costs and supplies and avoid a California-like energy shortfall. And they rejected tighter government regulation of energy supplies and markets as a way to avoid energy problems.

"Prosperity is powered by power, and New York's businesses know that too little power will devastate not only their own enterprises but also the entire state economy," said Business Council President Daniel B. Walsh. "New York's businesses are wary of repeating California's mistakes. They know that New York needs more power, not more government controls and centralized fussing over how to distribute the power we have."

The Public Policy Institute, the research affiliate of The Business Council, surveyed members of The Business Council and 19 other business associations and local and regional chambers of commerce around the state. As of July 20, there were 1531 responses. Participants were e-mailed an invitation to participate in the survey that included one link to a Web-based survey developed for The Institute by PinPoint Communications of Albany County.

Key findings of the survey include:

Plentiful energy supplies at the best possible prices are essential to New York's economy. Respondents emphatically reaffirmed the strong link between energy costs and competitiveness, both for their own companies and the state as a whole. New York's industrial and commercial energy costs were above the national average by 40.8 percent and 54 percent, respectively, in 1999, according to The Institute's recent publication, Just the Facts 2001.

More than 80 percent of respondents strongly agreed (46.7 percent) or agreed somewhat (33.4 percent) that energy costs are critical to their own competitiveness and profitability.

An even stronger majority of respondents strongly agreed (73.2 percent) or agreed somewhat (22.6 percent) that energy costs were critical to New York's competitiveness.

Virtually all respondents also strongly agreed (70.7 percent) or agreed somewhat (25.9 percent) that New York's above-average energy costs hurt its competitiveness.

Virtually all respondents strongly agreed (84.2 percent) or agreed somewhat (13.6 percent) that blackouts, power shortages, and uncertainty about future energy supplies would hurt New York's ability to attract jobs and employers.

Businesses overwhelmingly agreed that New York must site more power plants, and do so faster, to have enough energy to meet current needs and sustain growth.

More than 80 percent strongly agreed (47.1 percent) or agreed somewhat (35.6 percent) that New York must site more power plants to ensure long-term supply.

A similar majority strongly agreed (47.1 percent) or agreed somewhat (33 percent) that the state must accelerate the process by which it sites power plants.

Business believes that New York's energy policies should reflect a commitment to fuel diversity. For example, More than 60 percent of respondents strongly agreed (27.5 percent) or agreed somewhat (31.8 percent) that New York should site more plants fueled by nuclear power.

Businesses rejected a government re-regulation of energy supplies, markets, and prices, and instead indicated a preference for market-based policies.

More than 60 percent of respondents strongly agreed (29.9 percent) or agreed somewhat (32.5 percent) with the suggestion that New York address concerns about supplies and costs by relying on a free, competitive market with adequate supplies and minimal government regulations.

Most respondents strongly disagreed (27.4 percent) or disagreed somewhat (23.8 percent) with the suggestion that New York reregulate energy markets, fix prices, and control energy markets centrally.

About 60 percent of respondents also rejected government-directed conservation strategies, such as taxes on consumption (30.3 percent strongly disagreed, 28.6 percent disagreed somewhat) as a way to address concerns about supplies and costs.

Respondents also rejected the idea that increased government regulation of energy markets, supplies, and prices would make energy markets more efficient, increase supply, and lower prices (29.4 percent strongly disagreed, 29 percent disagreed somewhat).

Business believes that market-driven pricing encourages energy conservation. Businesses indicated that free-market pricing that passes true energy costs on to those that use energy will foster conservation.

Most respondents (28.4 percent strongly agreed, 36.2 percent agreed somewhat) said that New York's high energy costs have already prompted their own company to conserve energy.

A similar majority (27.8 percent strongly agreed, 35.5 percent agreed somewhat) said government-imposed price caps can undermine conservation by shielding businesses and other consumers from actual energy costs.

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