STAFF CONTACT :
The Business Council of NYS, Inc. strongly supports this legislation which extends and modifies several significant low cost power programs run by the New York Power Authority (NYPA).
Electric power costs continue to be a significant competitiveness issue for New York State businesses, and especially for manufacturers. Industrial facilities often face in-state power rates two to three times higher than those paid by out-of-state competitors. Combined with other adverse cost-of-doing business factors in New York – high property taxes, high comp costs, and others – the state's industrial sector continues to struggle.
This legislation helps address the cost-of-power issue by:
- adopting a permanent extension of the “replacement power” program, which allocates 445 MW of Niagara hydropower to industrial customers within 30 miles of NYPA's Niagara plant. The bill also broadens the criteria on which extension of replacement power contracts will be based, to include a business' capital investments, the impact that a power allocation would have on a business' productivity and competitiveness, and others.
- allowing for the extension of Economic Development, High Load Factor and Municipal Development Agency power program price and allocation contracts that expire prior to the end of 2006. To do so, the bill adopts a new “energy cost savings benefit” program, which – using some unallocated industrial hydropower and other NYPA resources – will allow for contract extensions for businesses that had power contracts based on the Fitzpatrick nuclear plant that formerly was owned by NYPA.
- restoring flexibility to the Power for Jobs program. Specifically, this legislation allows the New York Power Authority (NYPA) to consider “reasonable factors” in addition to job retention in considering the extension or reinstatement of a Power for Jobs allocation. In doing so, it restores 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.
- adopting a new “Preservation Power” program, referring to 490 MW of power from the NYPA St. Lawrence hydro plant currently sold to business customers. Redistribution of any relinquished preservation power will be made available for economic development purposes within St. Lawrence, Jefferson and Franklin counties.
In addition to extending these important low cost power programs, the bill broadens the criteria that will be used in evaluating contract approvals and extensions. 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. 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.
For these reasons, The Business Council urges approval of S.5866 and A.8960.
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.