BILL NUMBER:S2616

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.