June 22, 2005
Council urges lawmakers to enact comprehensive energy legislation
The Business Council is strongly supporting legislation to extend and modify several New York Power Authority (NYPA) programs that provide reduced-rate power to eligible employers across the state.
"Electric power costs continue to be a significant competitiveness issue for New York State businesses, and especially for manufacturers," the Council said in a legislative memo supporting the bill. "Industrial facilities often face in-state power rates that are significantly higher than those paid by out-of-state competitors."
Proposed legislation (S.5866/Wright-A.8960/Tonko) takes several steps to address New York's problems with high power costs, the memo said.
The bill would:
- Permanently extend the state's "replacement power"
program. This program allocates 445 MW of Niagara hydropower to
industrial customers within 30 miles of NYPA's Niagara plant.
- "Replacement power" is relatively inexpensive power
was allotted by the federal government to replace power that had
been generated in western New York by a power plant that was destroyed
in a rockslide in 1956.
- Permit the extension of price and allocation contracts that
expire before the end of 2006. This would affect energy contracts
under the state's economic-development power program, "high-load
factor" contracts, and municipal development agency contracts.
The bill would achieve this by adopting a new "energy cost savings benefit" program, which would use some unallocated industrial hydropower and other NYPA resources to permit the contract extensions for businesses that had power contracts based on the Fitzpatrick nuclear plant that formerly was owned by NYPA.
- Restore flexibility to the Power for Jobs program by allowing
NYPA to consider not only job-retention statistics but also other
"reasonable factors" when considering extension or reinstatement
of an allocation of reduced-rate power under the Power for Jobs
This would restore the program to its pre-2004 format. Language restricting NYPA's discretion was inserted into the law as part of program extension legislation approved last session.
- Adopt a new "Preservation Power" program. Currently,
490 megawatts of power from the NYPA St. Lawrence hydro plant
is sold to business customers. Under the new program, any of this
power that is relinquished by current customers would be made
available for economic-development purposes in St. Lawrence, Jefferson
and Franklin counties.
- Broaden the criteria on which extension of replacement power contracts can be based to include investments by the business, and extend broad "expansion power" program criteria—which includes capital investments and the effect a power allocation will have on a business' productivity—to new allocations of replacement and preservation power
"As manufacturers in New York and worldwide continue to innovate in the race to become more efficient, looking at employment levels only is an inadequate measurement of a business' long-term commitment to staying in New York State," the legislative memo said. "This legislation allows NYPA to consider factors such as capital investments that are indicative of a business' overall health and commitment to New York, in making contract decisions."
This legislation will be included as one of the scoring measurements of The Business Council's "Vote for Jobs Index 2005". This is The Business Council's annual assessment of legislator's action on key issues of concern to the state's business community.