Report Cites Need for More Generating Capacity in NY

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New York’s own energy policies have contributed to higher energy prices and dimmed the state’s energy generating prospects for the future, according to a report issued today by the Empire Center for Public Policy.

Entitled NY Unplugged: Building Energy Capacity and Curbing Energy Rates in the Empire State, the report was written by Max Schulz, senior fellow at the Manhattan Institute for Policy Research. Its key recommendations include reauthorization of Article X, the now-expired state law expediting construction of new power generating plants, “without further restrictions on energy sources.” The report also recommends encouragement of nuclear power—including support for re-licensing of the plant at Indian Point in Westchester County—and criticizes Governor Spitzer’s budget proposal for $40 million in tax and fee hikes on energy companies, saying such hikes should be avoided.

The report notes New York will need the equivalent of more than five new generating plants to avoid blackouts early in the next decade, “yet only one new large-scale generating plant, representing less than one-tenth of the required additional capacity, has been proposed in the state since the expiration five years ago of Article X, the landmark state law designed to speed the building of such facilities.”

“Action by Albany is urgently needed to expand energy capacity and reduce energy costs,” the report says. “Yet state laws and regulations in recent years have actually done the opposite—limiting capacity and raising costs.” Additionally, the current administration’s energy policies “threaten to make the situation worse.”

In addition to renewal of Article X, encouragement of nuclear power and avoidance of further tax hikes, the report recommends:

  • A moratorium on further increases to the System Benefits Charge used to fund energy research and development programs; it has increased by almost 200 percent since being instituted in 1998 and will have cost New Yorkers $1.85 billion by 2011.
  • A full-scale audit and cost-benefit analysis of the state’s environmental and energy regulations that take into account the collective burden of those rules.
  • Reconsideration of acid-rain regulations that add to New Yorkers’ costs while doing nothing to stop acid rain caused by emissions from out-of-state power plants.
  • Refashioning of the state’s Renewable Portfolio Standard “to allow energy companies, not state bureaucrats, to decide how to reach clean energy goals.”

The Empire Center is a non-partisan, independent think tank.