Creates the power solutions program

Summary of provisions

Section 1 of this bill would establish the New York State Economic Development Power Allocation board. The board would consist of four members: one member shall be the president of the urban development corporation; one member shall be appointed by the governor; one member that would be appointed by the Assembly; and one member that would be appointed by the Senate.

Section 2 - 5 of this bill would phase out of the Power For Jobs, and Economic Cost Savings Benefit programs on December 31, 2010 and estab- lishes procedures for applying for extensions.

Section 11 of this bill would establish the Power Solutions Program. Subsection 1 of this bill would establish the definitions for "applica- ble criteria," "authority," "economic development power award," "eligi- ble applicant," "eligible business," "eligible small business," "local distributor of electric service," and "eligible not-for-profit corpo- ration."

Subsections 2 - 3 of Section 11 would establish the application proce- dures and criteria for an award under this program. Criteria would include: 1) significance of the cost of electricity to applicant; 2) capital investments made or to be made by applicant; 3) size of payroll; 4) jobs created or retained; 5) risk of facility closure or relocation;

6) local and regional economic impact; 7) energy efficiency; 8) compli- ance with the state energy plan; 9) performance under previous programs; 10) not-for profits; 11) consistency of an award with state, regional and local economic development strategies; 12) the extent to which an allocation may result in inequity; and 13) impact of current economic conditions on the applicant. Subsection 3 would also permit current recipients of benefits under PFJ or ECSB to be phased out over two to three years. Recipients would automatically receive 66% of their current benefits in year one, 33% of their benefits in year two, and have the option for applying for a third year with 100% benefits.

Section 12 of this bill would require PASNY, in conjunction with any investor owned utility that purchases hydroelectric power from PASNY's Niagara and St. Lawrence Power Projects for rural and domestic uses to install, implement or provide energy efficiency measures or improvements to such rural and domestic customers. This would result in equal bill savings. On January 1, 2014, this power would be transferred to the Power Solutions Program.

Section 13 of this bill would authorize PASNY to make annual payments of $120 million for up to 950 megawatts of electricity to be allocated to the Power Solutions Program. PASNY would also be authorized to make annual payments of $120 million for up to 1,100 megawatts of electricity for the program. Section 14 of this bill would authorize PASNY to conduct energy audits as a condition for an award.

Justification

This legislation creates the "Power Solutions Program", an economic development initiative designed to help businesses and not- for-profits meet their energy needs. The new program will provide up to 1,100 megawatts of electricity benefits statewide.

The cost of electricity has a significant effect on economic develop- ment, employment levels and decisions to locate or expand businesses. The New York Power Authority administers several economic development programs designed to allay energy costs for businesses, not-for-profits and manufacturers. With New Yorkers currently paying among the highest prices in the nation the Power Authority's programs have been instru- mental in protecting and helping to create hundreds of thousands of jobs throughout the state. New York's ability to retain and attract new busi- nesses would be severely diminished without these important tools for making energy more affordable to power intensive businesses.

The Power for Jobs and Energy Cost Savings Benefit (ECSB) Programs are set to expire on May 15, 2010. Currently, 560 entities, representing over 300,000 employees, are being served by these programs. Partic- ipants have repeatedly warned that the absence of low cost power assist- ance would have serious ramifications for the health of New York's econ- omy. The loss of these important benefits would not only be detrimental to the direct beneficiaries, but also to the communities that depend on their continued success and contribution to the local tax base to support local businesses and the provision of essential services.

Repeated short-term extensions of the Power for Jobs and Energy Cost Savings Benefit Programs, while maintaining benefits for current partic- ipants, have stunted their ability to serve as effective economic devel- opment tools. The uncertainty of year-to-year extensions provides little incentive for businesses to invest in their New York operations and hampers the ability of the Power Authority to plan ahead and better utilize their resources to administer the programs more effectively.

The Power Solutions Program provides significant, stable, technical and financial assistance to help meet the current and future energy needs of businesses and not-for-profits. The program will make available long- term contracts, tailored to meet applicants energy needs, in return for commitments of job creation and retention, capital investment and energy efficient operations.

Applicants will be measured by total payroll, capital investment, impact on the regional economy and coordination with the state and local economic development efforts. Participants will be required to undergo energy audits to identify improvements and then work to make to achieve those efficiencies where cost effective. Beneficiaries will have to comply with thorough performance review provisions included in the contracts. Participation in programs will be overseen by NYPA and ESDC, assuring better coordination with the full range of New York's economic development tools. The current low cost power set aside for "Rural and Domestic" customers will be transformed into an energy efficiency program, assuring those residential participants of savings at least equal to what they are receiving now. Unlike the current program, the savings will grow year after year.

Legislative history

New bill

Fiscal implications

Authorizes PASNY to make annual payments of $120 million to the State.

Effective date

Immediate.