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For Release — Tuesday, May 28, 2002

COUNCIL: PROPOSED EMISSION REGS WOULD HURT ENERGY SUPPLIES,
COSTS WHILE OFFERING ONLY LIMITED ENVIRONMENTAL BENEFIT

ALBANY—The Business Council has urged the state to modify its proposed acid rain control regulations, saying they would significantly affect the supply and cost of electric power while offering limited benefits to affected ecosystems.

The Council expressed these concerns in comments it submitted to the state Department of Environmental Conservation (DEC) in response to the department's proposed acid deposition reduction program (ADRP).

The proposed regulations: The ADRP would:

The DEC's proposed rule-making is currently the subject of a 90-day public review and comment period that ends on May 28.

The likely effects on energy supply and cost: "Ensuring affordable, reliable electric power has risen to the top of our concerns about New York State's economic competitiveness, and DEC has significantly underestimated the downside risks to the state's electric power network," said Ken Pokalsky, director of environmental and economic development programs.

DEC's own impact assessment suggests an average statewide increase in wholesale electric prices of 5.4 percent, The Council's testimony noted. Price hikes could be even higher in certain "load pockets," including Rochester and Long Island.

These estimates may be low, because the state's economic impact assessment assumed that significant additional generating capacity would be on line by 2005, Pokalsky added.

"With the continued slow pace of project approvals, and recent cancellations and delays of previously announced projects, we are unlikely to come close to the projected increase in capacity prior to the effective date of this proposal," Pokalsky said.

"Further, delays in acquiring and installing new pollution control equipment, and decisions to curtail operation of some plants, will reduce the availability of power, and contribute to higher-than-projected cost impacts."

The limited environmental benefits of the regulations: These negative effects on energy costs and supplies are especially worrisome because the proposed rules would have little benefit on Adirondack lakes and other ecosystems impacted by acid deposition, Pokalsky added.

A modified rule could accomplish much of the same environmental benefits, with reduced costs and reduced impact on power production, The Council said in its testimony. The testimony suggested a series of regulatory amendments, including a longer implementation period and broader emission trading provisions.

"Acid rain continues to be a significant environmental concern in large areas of the state," Pokalsky added, "and we appreciate the interest in taking state-level action in advance of new, federal programs.

"However, since less than 20 percent of emission causing acid deposition in New York comes from in-state sources, a national or regional program would be a far better approach from both an environmental and economic competitiveness perspective."

Recognizing increased attention in Washington to national emission-reduction strategies, The Council urged that the final rule contain a sunset provision that would defer to any new federal acid rain control requirements.

These new regulations were first announced by Governor Pataki in October 1999. The rules were formally proposed in February.

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