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July 9, 2004

Two Upstate editorial pages join opposition to forced-purchase energy mandate

Two key upstate New York newspapers have editorialized against a proposed state-government mandate that would require individuals and businesses to buy electricity from costly renewable sources.

"New York's Public Service Commission should dismiss New York administrative law Judge Eleanor Stein's recommendation that by the year 2013, fully 25 percent of retail electricity sales come from renewable sources," the Ithaca Journal wrote in "Cautious approach: Good intentions, unrealistic solution," a July 7 editorial.

On the same day, the Buffalo News voiced strong doubts about the proposal. "Count us among the skeptics," it editorialized in "Unintended consequences: Having once made a disastrous mistake Albany plans to again manipulate energy."

The "recommended decision" issued by the administrative law judge in early June urged the PSC to mandate that 25 percent of the electricity bought by consumers and businesses come from renewable sources-power that is generally more costly than electricity generated by conventional energy sources. The 25 percent renewable-energy standard was first proposed by Governor Pataki in January 2003.

The Business Council supports renewable power, but staunchly opposes any forced-purchase mandate because it would inflate electricity costs that are already above average-by 45 percent for commercial ratepayers and 70 percent for residential ratepayers, according to the latest federal data.

"Is the 25 percent goal attainable? Perhaps," the Journal's editorial continued. "But it would be irresponsible to gamble the well-being of New York residents and the health of the state's economy before it is clearly proven that such additional renewable energy sources can reliably meet an additional 8 percent of the electricity demand at a reasonable market rate."

The Journal said there are good reasons to develop renewable energy, and that tax breaks for utilities that embraced these technologies "could serve as a strong incentive to accelerate energy production from renewable sources."

But it added: "For the immediate future, dependence on coal and other non-renewable sources must continue until renewable sources are developed to the point where they are economical, reliable and bountiful enough to supply residential and commercial needs."

"Mandating that a quarter of the state's power come from as yet unproven sources is not only unrealistic, it could inflict significant damage on the state's economy and the ability of everyday residents to afford living here," it concluded. "Albany should understand by now that unfunded mandates represent a foolish, destructive approach to government."

The News said potential benefits from renewable power to not justify a mandate to buy it, and agreed with the Journal that incentives to use renewable power are preferable to mandates.

"New York exists in the real world, one in which it habitually places itself at a competitive disadvantage," the News' editorial said. "The mandate to increase New York's consumption of renewable energy to 25 percent in the next 10 years is a gamble that could easily backfire."

The editorial warned that the recommended decision's estimate of likely cost increases may be law, citing the state's "disastrous '6-cent law,'" in which an inaccurate prediction of cost trends by state lawmakers eventually forced ratepayers to bear substantially higher energy costs than market forces would have created. "So much for government's ability to manage markets," the News wrote.

"Skeptics worry that government has no track record at creating demand, and that the mandate is more likely to create adverse unintended consequences - as in the 6-cent law - than it is to produce the intended result," the editorial said. "New York's track record in this regard inspires no confidence. What is more, the costs of living and doing business in this state are so far above the national average that any plan to raise those costs, whatever their benefits, need to be considered carefully - far more carefully than this proposal has."

The Binghamton Press & Sun Bulletin expressed reservations about the proposal in a June 11 editorial, citing arguments from The Business Council about the shortsightedness of increasing energy costs at a time when New York has long been hemorrhaging jobs.

That editorial, “Energy Alternatives,” saw value in a strong commitment to renewable power and in New York being a leader in that quest, but added: “As New York hobbles along in the valley of debt, perhaps it should yield that progressive thinking title to the federal government.”