For Release — March 5, 2002
COUNCIL: DRAFT STATE ENERGY PLAN SHOULD EMPHASIZE NEED FOR MORE ELECTRICITY GENERATING CAPACITY
ALBANY, N.Y.New York's final State Energy Plan should include a more aggressive estimate of future demand than the current draft does, and should emphasize New York's need to site more generating plants to meet future energy needs, Johnny Evers, The Business Council's legislative analyst specializing in energy, testified today.
"While the draft plan does state that New York is in need of more sources of electricity generation, its projections for growth in electric power demand over the next three to five years seem unrealistically-indeed dangerously-low," Evers said.
Evers noted that the draft State Energy Plan projects growth in peak demand from .68 percent a year (the mid-range prediction) to 1.1 percent per year (the high-end prediction). "Yet peak demand has grown an average of 2.1 percent over the past five years," Evers said. "It's grown 1.8 percent a year on average over the last 20 years-for total growth over that period of 43.1 percent."
Evers cited a recent research report by The Business Council's research affiliate, The Public Policy Institute, which estimated that New York must increase its electricity generating capacity by at least 9,200 megawatts over the next five years.
The report, The Power to Grow, said this new capacity is needed to address three key goals: fostering continued economic growth; ensuring continued reliability of New York's electricity systems; and generating the robust competition that is needed to drive prices down in the long term.
Other energy priorities: In his testimony, Evers outlined a number of other energy-related Business Council priorities:
- The need to continue second- and third-year contracts for reduced-cost electricity provided to some employers under the state's successful Power for Jobs programs.
- The need to extend Article X of the Public Service Law (which outlines
the state's plant-siting process) with some modifications to streamline
"The siting law has at times proven to be cumbersome to developers seeking to enter the deregulated electrical generation markets," Evers said. "While some procedural changes may be considered, we believe that the basic structure of the siting law should be continued."
- The need for
"fuel diversity" in New York's electricity-generating plants. Evers noted
that all 23 plants current being considered under the state's plant-siting
process call for natural gas generation.
"The plan should stress the need for a diverse generation fuel mix which includes not just renewables but also coal and nuclear," Evers testified. In particular, he added, "the encouragement of clean coal technology and the continuation of nuclear power need to be stressed."
- The need to be patient in awaiting the benefits of competition, which will become apparent only when there is enough baseline electricity generating capacity to drive prices down. Evers said New York was wise to restructure its energy markets administratively, rather than with a legislature-directed approach like the one embraced by California.
- The need to expand New York's natural gas pipelines and upgrade its electrical transmission lines.
- The need to reject mandatory state greenhouse gas emission targets or sector-specific reduction goals. Such issues should be dealt with at the national level, Evers said. Any state-only targets would undermine the ability of New York's businesses to compete with businesses in other states.
- The need to
recognize that energy efficiency and conservation, although important, should
not be considered sources of power.
"Historically, rising energy efficiency has increased economic output-but it has not reduced total energy consumption," Evers noted. "We must not fool ourselves into believing that it can eliminate the need for existing and expanded generating capacity."