BILL NUMBER:  S721

 TITLE OF BILL :
An act to amend the environmental conservation law, in relation to
restricting the operation of diesel powered electrical generation
systems in areas identified as not meeting certain federal air quality
standards for ozone


 PURPOSE :
To restrict the use of diesel powered electric turbines to meet summer
electricity demand in areas of the State that have severely
compromised air quality. Permits the use of diesel-generated
electricity in prescribed circumstances, including customary uses such
as emergency back-up during a power outage.

 SUMMARY OF PROVISIONS :
Prohibits the generation of electricity by diesel combustion in any
part of the State that is designated pursuant to the federal Clean Air
Act and EPA as being in severe or extreme non-attainment of the
national ambient air quality standards for ozone unless:

*the generating capacity is less than 100 kilowatts;

*the diesel combustion facility emits no more than 0.03 pounds of
particulate matter and 0.03 pounds of nitrogen oxides per megawatt
              

hour; or

*it is being used as an emergency back-up during a power outage.

 JUSTIFICATION :
Diesel generators are typically used as back-up systems during a power
outage and occasionally to generate electricity for temporary uses
such as by outdoor vendors. However, in order to mitigate anticipated
electric price spikes that may occur during a period of peak load
(typically during the summer) the NY Independent System Operator
(ISO), the Long Island Power Authority (LIPA), and the New York State
Energy Research & Development Authority (NYSERDA) have instituted
financial incentives for diesel generators to operate when prices
spike.

Both the ISO and LIPA will pay diesel generators to operate during the
summer in order to alleviate price or reliability pressures. The ISO
will pay diesel fueled installed generating capacity if the owner
commits to making it available on at least two hours advance notice
for a minimum of four hours. The ISO program is statewide but the most
lucrative payments will be made to generators in New York City.  The
ISO hopes to have 200-300 megawatts of diesel generation for summer
2001 in New York City at a cost of about $500 per megawatt hour.
NYSERDA has offered to pay more than $2.75 million of Energy Smart
funds to reduce the operating costs of those participating in the ISO
program. LIPA has enacted a "supplemental service rate" that provides
financial incentives for on-site generators to run these units eight
hours per day, five days per week, during peak summer months LIPA
expects to use at least 100 megawatts of diesel generated electricity.

During the summer of 2001, electricity prices spiked in New York City
and Long Island. These spikes were caused by instances of market abuse
and the inability of the NY ISO to contain them. They were not caused
by low supplies, but rather by too few suppliers. The answer to the
"price crisis" in New York City is not to call upon dirty sources of
air polluting electric generation. Rather, controls that prevent the
abuse of market power by suppliers (such as the ISO's proposed circuit
breaker), and policies that enhance competition with clean sources of
electric generation and that aggressively implement competition with

clean sources of electric generation and that aggressively implement
energy efficiencies would set a judicious course.

Diesel generators are so dirty that the promotion of their use to meet
the electric peak demands during summer, when air pollution is at its
worse, is very unwise public policy. For example, 100 megawatts of
diesel power is equivalent to putting an additional 140,500 cars on
Long Island's roadways. Diesel-fired combustion facilities emit
several orders of magnitude more oxides of nitrogen (NOx), sulfur
dioxide (S02), carbon dioxide (C02), and particulate matter per unit
output than natural gas combined cycle units. They emit 300 times the
emissions of that emitted by a state of the art combined cycle natural
gas power plant. NOx emissions are a key factor in the formation of
ground level ozone, or smog, which is most prevalent in the summer.
When inhaled, it can cause acute respiratory problems, aggravate
asthma, and inflame lung tissue. Both S02 and NOx contribute to the
acidification of forests and lakes and corrode buildings.  C02 is a
major greenhouse gas responsible for global climate change.
Particulate matter is known to lodge deep within the lungs where its
chemical components permanently damage lung tissues. Numerous medical
studies link particulate pollution with premature death, respiratory
related hospital admissions, asthma, and decreased lung function.

California's Air Resources Board (ARB) allows only the use of the
diesel fired generators during a rolling blackout because they are so
dirty, including: PM emissions from a typical diesel emergency
generator operated only during peak demand can cause a significant
increase in cancer risk for nearby residents (within one city block)
by 250 in a million. On average, this represents a 50% increase in the
cancer risk due to exposure to diesel exhaust.

Restricting the use of diesel generation is well founded on public
health and environmental grounds. New York State should be providing
financial incentives to use less energy, not incentives to create more
air pollution.

 LEGISLATIVE HISTORY :
2007-08: S.3172 - Referred to Environmental Conservation
2005-06: S.598 - Referred to Environmental Conservation
2003-04: S.2188A - Referred to Environmental Conservation
2001-02:  S.5247 - Referred to Environmental Conservation

 FISCAL IMPLICATIONS :
None to the state.

 EFFECTIVE DATE :
Effective immediately upon enactment.