Relates to the authority of the power authority of the state of New York with regards to replacement power

Title of bill

An act to amend the public authorities law, in relation to replacement power

Purpose

To return the 70 megawatts back to Western New York, that were loaned to Energy Cost Savings Benefits Program (ECSB).

Summary of provisions

Amends Section 1005 of the Public Authorities Law to provide state statutory authorization for Replacement power.

Justification

Chapter 313 of the laws of 2005 allowed for the continuation of several low cost power programs across the state, including the replacement power program in Western New York. The continuation of the replacement power program ensured that 445-megawatts of hydropower remains in Western New York. It also authorized the allocation of this power to businesses within a 30-mile radius of the Niagara power project for a period of five years upon meeting the terms and conditions of the program.

The need for Chapter 313 of 2005 stemmed from the Niagara Redevelopment Act, which was enacted by Congress in 1957. That statute required the sale of 445 megawatts of Niagara Project power to industries that formerly relied on low-cost power from the Schoellkopf hydroelectric plant, which was destroyed by a rock slide in 1956. This federal statute expired on December 31, 2005 and without enactment of this legislation there would have been no authorization for the allocation of replacement power to the businesses that were currently contracted to receive it.

However, Chapter 313 of 2005 also designated that 70-megawatts of the total replacement power allocation be made available for the newly created Energy Cost Savings Benefits program. This benefits program is funded in part by revenues raised from the sale of these 70-megawatts and other unallocated low-cost hydroelectric power in the marketplace. The 70-megawatts of "loose juice" from the replacement power program is on loan to the Energy Cost Savings Benefits program from November 1, 2005 until December 31, 2006. After this period of time, the 70 megawatts is scheduled to be offered to qualifying replacement power program companies in Western New York. However, if Western New York companies cannot use any or all of the 70 megawatts, it is once again to be loaned to the Energy Cost Savings Benefits program for another six month period before being offered again to potential replacement power companies in Western New York.

This new legislation would provide that the 70-megawatts be returned permanently to the replacement power program on December 31, 2006 and not be required to be loaned back to the Energy Cost Savings Benefits program. Passage of this legislation would maintain that the Western New York region continue to receive the full amount of replacement power, as originally intended by Congress and enacted into federal statute in 1957.

The full amount of replacement power is necessary for the Western New York economy, which continues to lag behind the rest of the state and country. The 70-megawatts will provide an important economic development tool for Western New York to attract and retain businesses. Many companies may not make decisions to invest in plants in Western New York now because of the uncertain future of the replacement power that may be available.

Bill history

S.7185/A.10092A; Referred to Senate Energy and Telecommunications Committee

Fiscal implications

None.

Effective date

This bill shall take effect January 1, 2010.