A.1570 (Brodsky)

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The Business Council opposes this legislation that would require the NYS Department of
Environmental Conservation to impose stringent limits on the emissions of nitrogen oxide, sulfur
dioxide, carbon dioxide and mercury from power plants with generating capacities of fifteen
megawatts or greater. It would also require the imposition of a permanent cap on all CO2
emissions from these power plants, based on 1990 emission levels.

There are many reasons to oppose this legislation -- its costs, its relatively small environmental
benefits, and its disregard for other state-level and regional regulatory initiatives addressing some
of the same emissions issues. For example,

• the stringent, state-specific standards established in this bill will have a significant adverse
  impact on in-state generators, and ultimately on business and residential consumers of
  electric power, further exacerbating New York's competitive disadvantage on the cost of
  electric power. Power costs in New York are already 20 percent above national averages for
  industrial consumers, and 40 and 60 percent above national averages, respectively, for
  commercial and residential consumers.
• its provisions regarding SOx and NOx emissions ignore the state's pending “acid deposition
  reduction program;” the DEC has already readopted these regulations on an emergency basis
  after they were partially struck down by the courts, and have proposed a permanent re-
  adoption as well. These regulations would apply to all major generating units in the state
  (the NOx provisions apply to all units of 25 MW or greater, the SO2 provisions to all
  generating units subject to the federal SO2 allowance program.)
• New York State is currently involved in a multi-state process to develop a regional
  greenhouse gas cap and trade program. While we would clearly prefer a national program to
  a regional one, there is no doubt that a regional cap-and-trade program would impose less
  significant adverse economic impacts than would the state-only CO2 emissions limits and
  emission caps proposed in this bill. And while these provisions will result in significant cost
  increases for New York businesses, residents and institutions, and have adverse impacts on
  the reliability of our power generating sector, they will have no material impact on global CO2
  emissions. It will have several negative consequences for New York State. Since there are
  no “end of pipe” controls for CO2 emissions, generators will have limited compliance
  alternatives – fuel switching or major upgrades to their combustion units. These compliance
  requirements will undoubtedly make continued operation of some in-state units financially
  infeasible, further accelerating our looming deficiency in peak load generating capacity. A
  CO2 reduction program will hit coal-fired units especially hard, thereby further reducing the
  fuel diversity of the state's generating capacity – already heavily dependent on natural gas.
  And even though the bill authorizes an emission credit trading program, a program limited to
  the utility sector in one state is unlikely to produce sufficient tradable credits to make a
  significant difference in system-wide compliance costs.
• The additional costs imposed on in-state generators will encourage New York-based
  businesses, especially large industrial and commercial consumers, to purchase additional
  power from out-of state generators – thereby shifting fixed costs of in-state utilities to their
  remaining customers. Further, to the extent that the bill merely shifts generation from in-
  state to out-of-state units, the impact of this bill on actual CO2 emissions will be greatly
  diminished.

The end result of this legislation will be higher costs for power generated within the state, and
marginal additional impact in addressing regional, national and even world-wide emission issues.

For the reasons detailed above, The Business Council strongly recommends against adoption of
A.1570.