Authorizes the power authority of the state of New York and the Long Island power authority to enter into public-private partnerships for the improvement of the state's electric transmission grid

Summary of provisions

Section 1 of the bill would provide legislative findings.

Section 2 would amend the "declaration of policy" in NYPA's enabling statute.

Section 3 would amend PAL § 1005 to, among other things, provide definitions of key terms, authorize NYPA to form a subsidiary company for purposes of participating in the Transco company, and to provide commensurate financial powers. This section would exempt projects from article eight of the environmental conservation law since these projects are subject to other regulatory review, which includes an environmental review. Further, this section specifies that any transmission company that may be created, may not engage in the construction of electric generating facilities and further clarifies that such company shall engage in projects directly related to transmission reinforcement and construction.

Section 4 of the bill would amend the legislative findings in LIPA's enabling statute PAL § 1020-a.

Section 5 would amend subdivision 2 of PAL § 1020-c(2) to provide LIPA or subsidiary company an interest in transmission assets that are located in whole or in part outside the LIPA service area.

Section 6 would amend PAL § 1020-f to provide authority consistent with the authority to be provided in section 3 of the bill.

Section 7 of the bill would provide a severability clause.

Section 8 of the bill would make the bill effective immediately.

Existing law

PAL § 1005 provides NYPA's existing authority, and PAL 1020-f provides LIPA's existing statutory authority.

Justification

The State's electric transmission system is facing two major challenges: 1) Aging infrastructure that requires significant reinvestment; and 2) System constraints that cause transmission

congestion, creating higher electric customer costs. Over 40 percent of the State's electric transmission system will require replacement within the next 30 years, at an estimated cost of $25 billion. Replacement is required to assure longterm reliability of the electric system. The State's electric transmission system is also congested at critical points on the pathways linking upstate and downstate New York. Together, New York City, Long Island, and Westchester County account for more than half of the demand for electricity in the State and this demand is increasing. However, in times of peak demand and high prices, lower-cost and/or cleaner power available from upstate cannot reach these densely populated areas because of the transmission bottlenecks Congestion can have adverse environmental and economic consequences. Older, less energy-efficient and cost-effective plants in urban areas run more frequently than they otherwise would if power from other sources of energy could reach these areas.

Under the approach provided for in this bill, NYPA and LIPA would each be authorized to form a subsidiary company to participate as a member of a Transco company. These public and private partners would enter into an agreement providing for the formation of the Transco company, the projects that could be undertaken by the Transco, and the rights and obligations of the Transco members. It is expected that the Transco agreement would authorize Transco members to enter into ancillary agreements that would provide for the administration of the Transco and individual Transco projects.

This unique approach to addressing the State's aging infrastructure empowers the State's transmission owners to create a unified plan for statewide electric power benefits. Such a partnership would facilitate state-wide transmission planning, facilitate lower financing costs for grid infrastructure projects and improvements, and promote sorely needed and sensible investment in the State's power grid.

Transco projects will provide numerous short and long term benefits to New York residents, such as reducing transmission constraints between the upstate and downstate regions, creating a stronger and more resilient transmission system with improved reliability, creating jobs and stimulating statewide economic growth, increasing local property tax revenues, reducing pollution emissions by dispatching more energy efficient generation resources; and facilitating the integration of renewable resources, including wind generation resources, located in upstate and elsewhere in New York.

Legislative history

This is a new bill.

Budget implications

There are no budget implications.

Effective date

This bill would take effect immediately upon enactment into law.