Business group favors new
N.Y. power plants

By WILLIAM F. HAMMOND Jr.                Gazette Reporter             June 19, 2001

ALBANY - To avoid a California-like energy crisis, the state should aim to expand its electric generating capacity by one-third or more over the next five years, the Business Council of New York State said Monday.  In formal recommendations to the Energy Planning Board, which is preparing an update  of the state's energy plan, the Business Council called for adding between 10,000 and 15,000 megawatts to the state's existing capacity of 36,000 megawatts."Economic growth is powered by power," said Matthew Maguire, a spokesman for the council.It was the most aggressive proposal thus far. The New York Independent System Operator, the nonprofit group that manages the state's power grid, had previously recommended adding 8,600 megawatts by 2005.

Mirroring the national debate on President Bush's energy plan, environmental groups immediately objected that the Business Council was putting too much emphasis on building new power plants and not enough on conserving energy."They're continuing to beat the drum . . . that unless you approve these plants, we're in big trouble," said Anne Reynolds of Environmental Advocates. "They're creating an atmosphere of, `We need to build, build, build, build. Don't get in our way, or you're harming New York.' "Reynolds said her group will call for the Energy Plan to include a goal of reducing electricity consumption by 10 percent over the next five years."California reduced its demand by 11 percent just this year, so it's eminently reasonable," she said.

Maguire responded that conservation and efficiency are not enough."They're good citizenship and they're good business," he said. "But they are not sources of power. . . ."To cite California's experience . . . is less than persuasive, given California's current problems," he added.California has been suffering rolling blackouts since last summer, largely because of an energy deregulation plan that went awry. Business Council President Daniel Walsh said New York's deregulation plan avoided the worst mistakes of California. But he noted that New York, like California, has experienced a steady increase in demand for electricity without a matching increase in generating capacity.From 1995 to 2000, Walsh said, New York's demand grew by 2,700 megawatts, but its capacity increased by only 293 megawatts."Left unchanged, the situation is a disaster waiting  to happen," Walsh wrote in a letter to the Energy Planning Board on Monday, which was the deadline for public comment in advance of the drafting process.The Business Council estimated that the state's peak demand for electricity, which was 30,200 megawatts during the year 2000, would rise about 10 percent over the next five years. The council added an 18 percent margin to assure reliability (a standard figure in the industry) and another 15 percent to foment competition by assuring excess capacity.That adds up to a capacity of 45,000 megawatts, or about 9,000 more than the existing capacity. To "err on the safe side," the council recommended setting a goal of 15,000 additional megawatts.

Gavin Donohue, executive director of the Independent Power Producers of New York, said setting a goal of adding  10,000 megawatts in the Energy Plan would send the right signal to the state agencies that make up the power plant siting board."If the state agencies put more emphasis on getting those permits out the door, we could achieve  that goal," said Donohue, formerly a top executive in the Department of Environmental Conservation. "It's ambitious, but I think it's doable."

The Business Council noted that various developers have proposed new or expanded power plants that - if they were all constructed - would produce 27,000 megawatts, well beyond the target amount. But few of these projects are likely to go on line within the next five years because the state's permitting process is so slow, Walsh said.The council called for  streamlining this siting process, and recommended several other changes: Upgrading electric transmission systems to eliminate bottlenecks that prevent additional power from flowing into New York City and other key  locations. Upgrading natural gas pipelines, in anticipation of growing  demand. Making sure the state does not become overdependent on any one type of fuel. The council noted that all of the proposals for new power  plants would burn natural gas. Continue the state's existing  programs to promote conservation and efficiency.

Assembly Energy Chairman Paul Tonko, D-Amsterdam, said he was perplexed by the council's comments. He said the Assembly has repeatedly passed legislation to address each of the  Business Council's concerns, yet the council consistently opposes those  bills."They issued a statement against our package, but they've embraced all our concepts," Tonko said Monday. "Why did you say no to our plan, when in  fact you've mimicked it?" He pointed in particular to an Assembly proposal that would expedite the permitting process for new power plants that are to  be built on the site of existing plants.But Maguire, the Business Council spokesman, said this would do little to address the pending shortfall of capacity."Our reservations about the Assembly plan have to do with its call for reregulating [the electric power industry], and in particular controlling prices," Maguire said. "That didn't do any good in California, and we don't think it would do any good in New York." 

Gazette reporter Joel Mandelman contributed to this story.Return to Index
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