Directs the power authority to conduct an analysis of the economic viability of load producing electric generating facilities for the purpose of determining the feasibility of entering into power purchasing agreements with such facilities.
TITLE OF BILL: An act to require the power authority of the state of New York to conduct an analysis of the economic viability of certain electric generating facilities
PURPOSE: This act would require the New York power authority to conduct an analysis of the economic viability of load producing electric generating facilities.
SUMMARY OF PROVISIONS:
Section 1 provides that the New York State Power Authority (NYPA) shall conduct an analysis of the current economic viability of base load producing electric generating facilities in the state. Based on such analysis, and as deemed feasible and advisable by the NYPA board, the Board shall then recommend entering into a purchase power agreement with such facilities for at least three years.
It also provides that the eligibility for the purchase power agreements shall be for those electric generating facilities that currently meet or exceed the minimum standards established in the final rule of the proposed National Emission Standards for Hazardous Air Pollutants and stipulates that eligible plants must agree to repower such facilities and construct new or retrofit existing electric generators.
Further, it provides that the electric generating facilities would have to safely demolish or decommission their existing generators and place new generators in service no later than March 2017.
Section 3 provides that power purchased by NYPA pursuant to such agreement with these facilities shall be considered Recharge New York power and shall be utilized to augment ReCharge New York power allocations for eligible businesses.
EXISTING LAW: Chapter 60 of the laws of 2011 established the ReCharge New York power allocation program.
JUSTIFICATION: This new bill would authorize the New York power Authority (NYPA) to enter into a purchase power agreement with existing coal plants situated in the state, using the purchased energy to supplement the state's ReCharge NY program, which is designed to retain and create jobs through allocations of economic development incentives to employers.
Power plants in the state have faced enormous fiscal challenges recently due to the fact that the transmission lines in the state have not been given badly needed upgrades, plants have not been able
to stay competitive and get their energy delivered to where it is needed in other parts of the state.
Power plants in the state, particularly in Western New York, contribute significantly to the people and the economy of the region by employing hundreds of New Yorkers with high paying jobs and providing millions of dollars a year in direct benefits to the state and local economy. These facilities also pay millions of dollars in annual property taxes and payments in lieu of taxes agreements making them, in many areas, the largest taxpayer in the school districts and municipalities.
The economic benefits of annual labor payments and operational expenses of power plants, including locally-procured goods and services, are multiplied across regions. This contribution makes a huge impact. For example, in Chautauqua County, the NRG power plant located in the city of Dunkirk contributes over $20 million in wages and $10 million in PILOT payments to the school, the city and county of Chautauqua, and well over $10 million in local goods and services.
Were any of these facilities to go under, or even be reduced in capacity by any significant margin, it would decimate the financial viability of the municipalities and school districts that are already facing difficult fiscal times.
This bill provides a temporary solution by allowing for NYPA to conduct an analysis of the minimum resources necessary to maintain plant operations and to possibly enter into a purchase power agreement with New York power plants to keep them in operation in the short term, while state leaders work together on a long term solution for our ailing power plant infrastructure. It will help avoid the devastating impact of power plants shutting down and help to maintain the reliability of the power grid, while keeping jobs in New York.
It is critical that New York State maintains a variety of modes of power generation to ensure the reliability of the power grid. This legislation will help New York State to be energy self-sufficient. For example, the coal plants in Chautauqua and Niagara counties have just invested millions of dollars in the last few years in state-of-the-art clean burning technology to comply with federal Environmental Protection Agency regulations. For example, the NRG power plant in Dunkirk recently undertook $200 million in clean coal burning technology upgrades. These state-of-the-art upgrades ensure that the state's energy needs will be met in the face of unpredictable energy prices and changing demand for other modes of electricity generation.
The ReCharge NY program is a successful economic development program that retains and creates jobs by providing low-cost electricity to attract new businesses and encourage existing firms and not-for-profit organizations to stay and grow in the state. Under the ReCharge NY program, when businesses in the state make capital investments that support the regional economic development priorities in the state, they are awarded contracts based on their commitments. This legislation utilizes the success of the Recharge NY Program and further ensures the goals of regional economic development and job
retention in Western New York are realized, while helping to avoid the economic catastrophe should these power plants shut down.
PRIOR LEGISLATIVE a/STORY: 2012: S.7767 Passed Senate
EFFECTIVE DATE: Immediate.
STATE OF NEW YORK ________________________________________________________________________ 2616 2013-2014 Regular Sessions IN SENATE January 23, 2013 ___________Introduced by Sens. YOUNG, MAZIARZ, O'MARA -- read twice and ordered printed, and when printed to be committed to the Committee on Corpo- rations, Authorities and Commissions AN ACT to require the power authority of the state of New York to conduct an analysis of the economic viability of certain electric generating facilities THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. (a) Within 90 days of the effective date of this act, the power authority of the state of New York shall conduct an analysis of the current economic viability of load producing electric generating facilities, and as deemed feasible and advisable by the trustees of such authority, taking full consideration of the requirements and viability of the entire power generating system needs of the state of New York, with special consideration of the ratepayers and taxpayers of the state, shall recommend entering into a purchase power agreement with the owners and operators of such facilities, if such owners and operators meet and agree upon the conditions in subdivision (b) of this section. Such power purchase agreements shall be effective upon the conclusion of such 90 day period and be designed to maintain said facilities' power production capacities at a rate sufficient to ensure at least three years worth of no less than a level of operating income necessary to allow said facilities to remain open and functioning reliably and safely and fully staffed at at least ninety percent of current employment levels, payrolls and local community benefits. For the purposes of this subdivision, operating income shall include all expenses of eligible facilities excluding debt service costs, except for verifiable debt service payments related to capital improvements designed to substan- tially reduce the emission of toxic air pollutants emanating from gener- ators operating at said facility.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD07145-01-3 S. 2616 2
(b) The power purchase agreement permitted under subdivision (a) of this section shall only apply to power generating units that currently meet or exceed the minimum standards established in the final rule of the proposed National Emission Standards for Hazardous Air Pollutants. In addition, such owner and/or operator of a generating unit otherwise eligible for benefits under this section must agree to repower such facility and construct new or retrofit existing generators that: 1. are designed and intended to operate at an electricity production efficiency level of at least forty-eight percent; 2. will be capable of producing at least 600 megawatts of electric generating capacity running at least 7,000 hours per year; 3. will be able to achieve a 2 parts per million limit for nitrous oxide emissions using Lowest Achievable Emission Rate technologies; 4. will utilize Lowest Achievable Emission Rate technologies if feasi- ble, or, at a minimum, Best Available Control Technologies for carbon monoxide and sulfur dioxide emission levels; 5. will safely demolish or decommission the existing generators at an eligible facility; and, 6. will place in service the new electric generating facilities no later than March 31, 2017. S 2. Notwithstanding any limitations or conditions contained in para- graph 8 of subdivision (a) and paragraph 7 of subdivision (c) of section 188-a of the economic development law, any power purchased by the power authority of the state of New York pursuant to section one of this act shall be considered Recharge New York power, and shall be utilized to augment Recharge New York power allocations for eligible businesses as defined in paragraph 5 or 7 of subdivision (a) of section 188-a of the economic development law that are recommended for a Recharge New York power allocation pursuant to part CC of chapter 60 of the laws of 2011. S 3. This act shall take effect immediately.