Directs the New York state power authority to issue RFPs on certain gas turbine generators installed in and around the New York metropolitan area

Directs the authority to report on the range of solicited bids to the governor, the temporary president of the senate, and the speaker of assembly. NYPA is also authorized to make contributions to the State treasury to the credit of the general fund in the amount of the revenue collected by the authority from the sale of facilities pursuant to this section on or before March 31, 2011.

Section 2: States this act shall take effect immediately.

Justification

As New York State continues to face increasing budget shortfalls, it is in the interest of all New Yorkers for its government to see new, yet responsible, means of obtaining additional revenue. Such opportunities include the transferring of publicly owned and operated entities assists the state financially not only through an up-front infusion of revenue and future tax earnings but by reallocating future risks and costs (both known and unforeseen) from the public sector to the private sector.

An ideal candidate for such an endeavor is the New York Power Authority (NYPA). NYPA should issue a Request for Proposals (RFP) to sell its small, natural gas-powered facilities in an around New York City, thereby providing independent power producers with the opportunity to help trim the budget shortfall while, as the same time, applying their expertise to the operation of those facilities. If an RFP for those generating facilities was issued, it is possible for New York State to bring in significant revenue to help during these tough economic times, while also securing future tax revenues to benefit the state for years to come. Furthermore, operating costs associated with these facilities no longer will be a burden on NYPA, as all costs and risks associated with owning and operating the facilities would be on the shoulders of private companies.

In the Summer of 2001, NYPA began operating ten natural gas-powered generating facilities at six sites in New York City and one on Long Island, thereby adding approximately 450 megawatts of energy to NPA's portfolio. These facilities were intended to be used as "peaker" plants, needed only in times of extremely high demand or in case of emergency. Since that time, additional resources have emerged as providers of energy to New York City. Also, the New York Independent System Operator (NYISO) has recently predicted very low increases in energy demand for the near future. These factors have led the NYISO to determine that New York City has no additional reliability needs for approximately the next decade. Combined, these facts should allay any of the concerns that prompted NYPA to build these unites in the first place and open the door for their transition to the private sector.

It would not be the first time that NYPA sold some of its assets to the private sector. As it is likely that the private sector would be interested in NYPA's small generation facilities as well. While it is impossible to predict potential offers, it should be noted that, in 2008, TransCanada Corporation purchased the Ravenswood Generating Facility in Queens from National Grid for $2.8 billion---a price that exceeded expectations and demonstrates the level of interest that the private sector takes in worthwhile assets.

Prior legislative history

New Bill.

Fiscal implications

To be determined. The RFP will provides with an accurate value, but estimates are that these facilities are worth hundreds of millions of dollars.

Effective date

This act shall take effect immediately.