A "recommended decision" issued by an administrative law judge urges the state Public Service Commission (PSC) to require consumers and businesses to buy electricity from renewable sources-power that is generally more costly than electricity generated by conventional energy sources.
The Business Council expressed strong reservations about the recommended decision, which moves the state closer to enacting a controversial "renewable portfolio standard" (RPS) mandate.
"The last thing New York's economy needs is a government mandate telling us what kind of power we must buy and driving up our costs," said Business Council President Daniel B. Walsh.
"The Business Council supports renewable power. We're proud that New York already has among the highest rates of renewable power usage in the country. But we are very concerned that a mandatory purchase quota will turn this into a seller's market that will drive our energy costs still higher."
Renewable resources now provide about 19 percent of electricity used in New York. The RPS would compel state electricity consumers to buy 25 percent of electricity from renewable resources by 2013, with timetable adjustments possible upon a review of progress in 2008.
In announcing the recommended decision, the PSC also announced that it had scheduled eight public forums at various locations around the state in June to share information, and receive public comments on the RPS.
In the recommended decision, the administrative law judge said that the RPS should consider wind, solar, tidal, fuel cells, and certain hydroelectric, biomass and biogas sources as renewable-but not municipal solid waste. The recommended decision suggested that the PSC leave itself the option of considering that possibility in the future.
All utilities and other providers of electric service would have to meet the standard, and all retail customers would share the cost. However, the state's municipal utilities and the New York Power Authority (NYPA) would be exempt, apparently in recognition of the economic-development value of lower-cost power.
"If lower-cost power has job-creation benefits for these entities, why does it not have the same benefits for the rest of the economy?" Walsh said.
The recommended decision projected cost increases of 1.8 percent for residential customers, 2 percent for commercial customers, and 2.4 percent for industrial customers. "At a time when New York State has been hemorrhaging jobs, especially in its manufacturing sector, such an increase for our industrial sector would be unconscionable," Walsh said. He also noted that The Council believes actual cost increases would be significantly higher.
Moreover, The Council's energy lobbyist, Anne Van Buren, said likely cost increases would be significantly higher because conventional facilities will still be needed when intermittent renewable resources, such as solar and wind power, are unavailable. She also said the recommended decision's cost estimates do not reflect probable new costs for transmission upgrades and additional New York Independent System Operator expenses that the new emphasis on renewable energy would require.
In issuing the recommended decision now, the administrative law judge rejected a recommendation from The Business Council and others that the recommended decision not be issued before completion of a detailed report on how the RPS would affect the reliability of New York's electricity grid. That report is being prepared by the New York Independent System Operator and is not expected to be completed until late this year.
The economic harm from the proposed forced-purchase mandate would be especially worrisome Upstate. There, according to a new analysis by The Public Policy Institute, virtually all net new jobs created since 1990 were produced not by a thriving private sector but by the nation's most heavily burdened taxpayer sector.
"New York's costs of job creationstate and local taxes, workers' compensation, health insurance, and energyare above average. A government decree that would only worsen one of those burdens is the last thing we need," Walsh said.