It is critical that the legislature adopt a new, statewide economic development power program.
The Power for Jobs and the Energy Cost Savings Benefit programs have been subject to multiple one year extenders. Over time, the program’s value to both the state and to participating companies has eroded. Periodic expirations have left several hundred energy-intensive businesses facing higher costs and uncertainty regarding future power supply and prices. The lack of a permanent new program, with the opportunity for new applicants and approvals, has also resulted in an incentive program at about two-thirds its authorized size.
The Business Council strongly supports adoption of S.3164/A.5021, which is modeled on legislation that received broad, bipartisan support in 2010.
This legislation includes key provisions necessary to support high paying jobs and promote new capital and energy efficiency investments, resulting in significant economic returns to the state. These include:
- A new, permanent program to replace the Power for Jobs and Economic Development Power programs that will provide predictability and certainty for program participants.
- A 910 MW program that will give the state more economic development power resources than are available under expiring programs, that will accommodate new program participants statewide.
- Allocation-based power benefits and long-term contracts of up to seven years that will provide competitive, stable electric power prices to energy intensive businesses.
- Eligibility criteria that assure significant, long-term economic return to the state, including the number and value (wages and benefits) of jobs created and retained, investments in capital equipment and energy efficiency, the significance of energy costs to a business’ competitiveness, and the local economic significance of the facility.
While this bill redeploys current NYPA hydropower from residential to economic development uses, it includes a 3 year, $100 million per year mitigation fund to offset any adverse impact on ratepayers. The bill also guarantees, at minimum, that the same level of aggregate benefits now provided to upstate business under Power for Jobs will be provided to upstate business under the new program.
Importantly, in addition to the rate mitigation included in this bill, the state is devoting significant additional funding for residential energy efficiency programs, including $90 million through NYSERDA’s recently adopted RGGI implementation plan. The state has also received nearly $400 million in federal stimulus funding for a statewide residential weatherization program.
Overall, we believe this bill offers a reasonable balance of economic development resources and residential rate protection.
Moreover, this legislation will result in a more effective statewide economic development power program that will promote private sector investment and retain and grow high paying jobs in manufacturing and other energy intensive business.
For these reasons, we strongly support S.3164/A.5021 and support its early passage during the 2011 legislative session.