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New York Governor Rolls Out New Bill on Power Plant Siting

June 13, 2005
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New York Gov. George Pataki last Tuesday submitted new "Article X" legislation that he said will improve the review and siting process for electric generating facilities in the state and reauthorize a statewide energy planning process to ensure an adequate, reliable and affordable supply of energy to meet New York's growing energy needs.

Article X, which was enacted in 1992 and expired on Jan. 1, 2003, provided a streamlined process to review, approve and locate new power plants in New York. Pataki's new bill does not set an expiration date for Article X.

The governor's bill provides a new review procedure for nonmajor power plants and repowering projects with a net generating output of 50-80 MW, including ample opportunities for public comment, intervenor funding, a public statement hearing and evidentiary hearings.

The process would be completed within a six-month time frame. Because the bill would set a limit of six months for the review of nonmajor facilities capable of meeting peak electric demands in the short term, there are no provisions for "emergency" exceptions. Consistent with the previous provisions of Article X, all new plants and repowering projects with a net generating output greater than 80 MW would be subject to a 12-month review.

The legislation also would establish a new pre-application fee of $50,000 for major projects (80 MW or greater) to be available to intervenors, and a fee of $20,000 for nonmajor facilities or repowering projects that would increase the net generation by less than 80 MW.

If a project application is amended in a manner requiring additional substantial public review and scrutiny, the New York State Board on Electric Generation Siting and the Environment, which oversees the Article X process, would be authorized to impose additional fees to defray intervenors' costs. Additional intervenor funding would be provided at $500 per new megawatt for nonmajor and repowering projects and at $1,000 per new megawatt for major projects.

In addition, the siting board would be required to determine the environmental justice impacts of projects and conduct a detailed public health and safety review, including assessments of environmental and health impacts. The cumulative air impacts of all operating power plant facilities, along with the addition of the proposed plant, would be considered by the board, with emphasis on areas in nonattainment with federal air quality standards.

As part of the Article X reauthorization, the governor's bill would reestablish the state energy planning process by reauthorizing a State Energy Planning Board to ensure adequate supplies, energy efficiency, diversity, renewable resources and delivery capacity for New York's electric system.

The bill would reduce the energy planning horizon from 20 years to 10 years to more realistically reflect energy market changes and energy forecasting capabilities. The legislation also reinstates a portfolio management provision of the public service law, whereby utilities contemplating supply additions would consider available electric supply and energy efficiency alternatives.

To grant a certificate, the siting board must determine all of the following:

"For far too long New York's Article X Power Plant Siting Law has been expired, and investment dollars which New York needs are going elsewhere," said Gavin Donohue, CEO of the Independent Power Producers of New York (IPPNY), in responding to Pataki's proposal.

Donohue noted that it is "extremely important that New York regains a regulatory framework to construct needed electric generating capacity in an environmentally friendly manner and with public input. The legislation proposed by Governor Pataki will reenact Article X in a way that allows needed power plants to be built, that protects New York's environment, and that provides funding for public participation in the decision-making process on where facilities should be built."

Last year, IPPNY, in cooperation with a coalition of labor, local government, consumer and energy groups, proposed a similar bill to the New York legislature and the governor's office. IPPNY said Pataki's bill reflects a similar balanced approach to Article X's reenactment.

With the fierce competition for investment dollars in deregulated energy markets, it is important to send a strong message to the financial world that New York is committed to developing new, efficient sources of electric generation, the power producers' group said.

IPPNY underscored the point that New York state needs to reauthorize Article X now. The New York Independent System Operator's recent "Power Trends" report warns that the state could face a power supply shortage between 2008 and 2011 and that New York City and Long Island may need power even sooner, the group noted.

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