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March 28, 2002

An authority on energy reaffirms that New York needs more generating capacity

Reaffirming its conclusion in a similar report a year ago, New York's Independent System Operator (ISO) today said New York must immediately increase its electricity generating capacity to avoid serious shortages, improve air quality, facilitate growth, and avoid cost increases.

In its updated Power Alert, the ISO said New York should add 7,100 megawatts of capacity by 2005. In addition, the report said that New York should immediately approve 3,000 megawatts of new capacity, and that Long Island alone needs between 750 and 1,000 megawatts to reduce "severe reliability risks and high prices."

"New York remains headed toward a very serious power shortage unless it acts immediately to get new supply sited and actually built within its borders," said William J. Museler, president and CEO of the ISO. "We are far from out of the woods with respect to our electric supply situation."

The ISO's conclusions echo those reached by The Business Council's research affiliate, The Public Policy Institute, in a February 2002 report entitled The Power to Grow.

That report concluded that New York must add at least a dozen new power plants with at least 9,200 megawatts of additional electricity-generating capacity by 2007 to avoid the risk of serious economic damage.

Adding this capacity will make possible a number of powerful benefits, including increased growth and a more robust competition that, in the long-term, would help reduce New York's above-average electricity costs.

The Power to Grow can be found at www.ppinys.org/reports/2002/powertogrow.pdf.

Both The Power to Grow and today's ISO report debunk claims by some advocates and news media that the decrease in demand created by the destruction of the WTC effectively ended New York's energy crisis.

"The loss of the World Trade Center had a more marginal impact on reducing overall power demand than is widely perceived," the ISO said in a release. It estimated that the WTC represented a net diminution of only 90 megawatts in demand.

The ISO today also recommended the renewal of the state's Article X law, which governs the process by which proposed power plants are considered and approved. That law is due to expire at the end of this year.

The ISO is an independent not-for-profit entity charged with overseeing New York's electricity grid and its electricity markets.

The ISO report can be accessed from www.nyiso.org/topics/articles/index.html. The Power to Grow can be found at www.ppinys.org/reports/2002/powertogrow.pdf.