Review Out-of-State Power Advantages

A new section 77-b is added to direct the public service commission, through a comprehensive monitoring and reporting methodology, to deter- mine undue competitive advantages in the state's electricity markets that out-of-state power generators have over in-state power generators due to the state's imposition of charges, fees, assessments, environ- mental standards and/or allowance auctions of in-state generated power imported into the state. Such methodology shall be established pursuant to a stakeholder process through a proceeding established by the commis- sion. The commission is further directed to report the negative conse- quences of imported power as well as how these consequences could be minimized to the governor and the respective chairs of the senate and assembly energy committees within 9 months of establishing the methodol- ogy. The report must reflect stakeholder review and comment on the impact of imported power's impact on local employment and revenues, and adverse environmental impacts both within and outside the state. Subdi- vision 2 provides definitions for "competitive advantage", "in-state power generator", and "out-of-state power generator".

Section 2 provides that this act shall take effect 30 days after enact- ment.

Justification

Power generators outside of New York that do business in New York, should not obtain competitive advantages over in-state generators.

It is in the best interest of the state to adopt consistent policies that, to the greatest extent possible, utilize electrical power in as cost efficient and environmentally friendly means possible whether the power is produced within or outside the state of New York.

Policies that encourage unfair competitive advantages for out of state power producers, threaten jobs and local tax bases and encourage the importation of pollution intensive power into the state and are a significant threat to the health of New York residents. In their efforts to reach environmental and renewable energy goals, New York power regu- lators have increasingly opted to promote and approve transmission upgrades to the state's electrical grid that obviate the need for in-state generation of significant megawatts of power.

Instead of promoting the repowering of power plants into cleaner tech- nology or preservation of in-state generation, they have chosen in many cases to endorse policies that export New York jobs, revenue, and control of the power supply. These policies have favored transmission upgrades, and have had the consequence of encouraging major out of state power producers to produce more energy, creating more harmful emissions and negatively impacting the environment.

While these policy decisions appear to have lowered emissions to more quickly meet the state's emissions reduction goals, the irony is that in order to meet energy consumption demands of residents and businesses in the state, out of state power plants are increasing their energy production, and in many cases, are now producing more "dirty" power than would have been produced by instate generators that now are going out of business.

In addition to the detrimental effects upon communities that would occur if most of our generation is replaced by transmission, PILOT payments will be at risk and this will create a great deal of angst and uncer- tainty in the community, limited power supply in the state and importa- tion of dirty coal power from out of state will result.

Importing power primarily through transmission upgrades as a priority policy direction for the state is a detrimental direction to take. It will hurt our communities and our in-state manufacturers. Manufacturers need the ability to expand since expansion often entails a need for more power. Manufacturers are dis-incentivized from expanding their busi- nesses in New York when there are no easy means to increasing their power supply, and no base load power plants are nearby which is the result when power is imported via transmission lines rather than produced locally.

A key factor that is seemingly not considered by power regulators who endorse transmission over instate generation, is that for every megawatt of power that is imported there is an impact on emissions at other power plants. When dirtier power plants out of state have to produce more energy, those power plants increase harmful emissions which hurts the environment more and is in opposition to the spirit and intent of New York's clean energy goals.

There are upwind and downwind emissions in the air that carry pollution over New York's borders. Emissions actually are increased as a result of power plants out of state increasing their power production to meet the need of New York's bellying-up fossil fuel plants.

New York has much higher standards for clean power production than many other states. Replacing our in-state generation with transmission projects only serves to import dirty power out of bordering states. The public has a right to know what the sources of our power are and whether emissions overall are truly being reduced. This bill will provide a way for a full and accurate analysis of true sources of power and emissions, and will help state policymakers to make more informed decisions that will better help to promote policies that are more in line with the goals of promoting a clean environment while preserving New York energy independence.

Policymakers in the state should not advance policies that promote out of state generators to produce increased amounts of dirty power to meet our state's power needs with costs borne on the backs of ratepayers. Instead policies should be promoted that encourage private investment, job creation and clean technology repowering of power plants. Energy policies that preserve our communities' futures and serve our state's and the environment's best interests should be prioritized.

The analysis and reporting that this legislation requires will help to steer energy policy in a direction that helps improve the environment overall, not just in New York, will save jobs, and encourage businesses to grow.

Reliability and congestion on the state's power grid cannot be as effi- ciently managed by simply importing power from out of state generation. In the case of emergency situations such as black-outs, attacks on the grid or spikes in demand, if we rely solely on transmitted power, New York is in a weakened position to respond and solve issues, because decisions are being made by authorities outside of our jurisdiction.

In contrast, a healthy balance between base load power generation, local renewable sources and reliable short and long range transmission in the state is needed to give New York the control that we need, to help elec- tricity rates stay low, protect consumers and jobs and help assure a better environmental and economic future for our state.

Legislative history

2017,2018: S.529/A.3628 REFERRED TO ENERGY AND TELECOMMUNICATIONS 2016: S.8055/A.10717 PASSED SENATE

Fiscal implications

Undetermined

Local fiscal implications

None.

Effective date

This act shall take effect immediately.