American Lung Association of
New York State
Natural
Resources Defense Council
Pace Law
School Energy Project
Public Utility
Law Project
American Wind
Energy Association
Tim Nichols (ALANYS): 518-453-0172
Anne Reynolds (EA):
518-462-5526 ext. 238
Ashok Gupta (NRDC): 212-727-4462
Fred Zalcman (Pace):
914-422-4082
David Wooley (AWEA): 518-438-9907 ext 238
Clean
Energy Advocates Call for Increased State
Investment
in Energy Efficiency, Renewable Energy and Affordability
Public
Service Commission Urged to Extend the Systems Benefit Charge
A
coalition of leading state environmental, public health, and public interest
organizations today called for increased investment in electric efficiency and renewable
energy programs. New York can make this investment by extending the
Systems Benefit Charge, a decision to be made by the Public Service Commission
(PSC) at its December 13th session.
The groups cite New York’s severe need for public investment in
efficiency and conservation, renewable energy, and energy affordability
programs.
A
coalition of eighteen organizations[1]
urged, in a November 20th letter to the PSC, an investment of $200
million per year, higher than the PSC staff recommendation of $138.1 million.
Advocates believe that the Systems Benefit Charge (SBC) should be fixed at a
modest 2 tenths of a cent per kilowatt-hour, so that the collection of funds is
firmly linked to electricity consumption levels.
“The need
is obvious — New York faces price increases, concerns about reliability,
persistent air quality problems, and more than twenty controversial new power
plant proposals,” said Anne Reynolds, director of the air and energy program at
Environmental Advocates. “Smart public policy dictates that clean and efficient
energy technologies should be the first solution to New York’s energy problems,
not new power plants or encouraging the use of dirty back-up diesel generators,”
stated Reynolds.
The
restructuring of New York’s electric industry has left a gaping hole in funding
for public benefits programs. Spending on energy efficiency peaked in 1992 at
$286 million. Funding in 2000 is $110 million, less than half its former level.
Massachusetts, New Jersey, and Connecticut all spend more than three times New
York’s investment in these programs on a per capita basis. Maine and Rhode
Island spend twice New York’s amount. “New York needs to play catch-up in its
funding of energy programs,” said Jason Babbie, environmental policy analyst
for the New York Public Interest Research Group. “These programs save money,
improve air quality and ensure system reliability, all of which are needed in
New York.”
“Increasing the SBC to two
tenths of a cent per kilowatt-hour will provide lower energy bills and rates,
cleaner air, improved public health, more jobs, greater reliability, and less
pressure to build new power plants,” says Ashok Gupta, Senior Energy Economist
at the Natural Resources Defense Council.
He continues, “New York State’s large and well-documented reserves of
economically viable energy efficiency investments remain largely untapped.”
An investment of $200
million per year will bring great returns to New York. Based on the PSC’s own
estimates, this investment will generate $1.5 billion in savings to New Yorkers
on energy costs over the ten-year life of the efficiency measures installed.
Nearly 28,000 job-years will be created.
The environmental returns
will be impressive as well. The resulting efficiency projects will prevent
emissions of 13,000 tons of nitrogen oxides, 22,000 tons of sulfur dioxide, and
over 9 million tons of carbon dioxide. “Power
plants are a significant source of air pollution that leads to premature death,
asthma attacks and respiratory related hospitalizations,” said Tim Nichols,
director of government affairs with the American Lung Association of New York
State. “The State needs to do all it
can to ensure that funding for energy efficiency and clean energy technologies
is available. Doing so will minimize
the impact that air emissions from power plants have on the health of the more
than one million New Yorkers with asthma and will improve the quality of life
for millions of others.”
These programs will lessen the energy burden of low-income households, where energy costs can reach 35% of income. This investment is extremely cost-effective because it not only saves large amounts of energy, it makes it possible for low-income consumers to pay their bills, saving utilities the costs of late payments and disconnection. Gerald Norlander, executive director of the Public Utility Law Project, an organization representing the interests of low income energy consumers, stated: “Low income consumers have the greatest energy burdens, suffer the most from increasing energy costs, and yet lack the means to invest in cost effective measures that will reduce their energy bills. In recent years, utility energy efficiency programs were reduced, even as electricity consumption increases, energy supply shortages loom, prices soar, and the environment is threatened. Proven, cost effective programs and measures exist to eliminate barriers to energy efficiency for low-income households. All New Yorkers benefit when low income households become more energy efficient, and an increase in the systems benefit charge is needed to accomplish this goal."
Reducing Electricity Prices
for All New Yorkers
Energy efficiency is seen by environmentalists as a
powerful strategy to combat price spikes, like the one that drove prices up for
customers of Con Ed by more than 40% this past summer. "Its Economics 101", explained Fred
Zalcman, senior attorney with the Pace Law School Energy Project. "In
today's market for electricity, the price everyone pays is based on the most
expensive power plant's bid. By
lowering demand for electricity during the times it costs most, everyone wins.”
This affect alone could more than pay for the cost of the SBC in the
first year.
Development of wind, solar and biomass energy
resources can also reduce long term electric prices. David Wooley of the American Wind Energy
Association stated, “New York has abundant, indigenous, renewable
energy supplies. The costs of producing
electric power from wind, solar and biomass energy are coming down fast and
will continue to decline. By contrast we are
bound to see price spikes and shortages of electric power due to our byrapidly increasing dependence
on imported natural gas supplies.
Renewables will also help wean New York from its reliance on highly
polluting coal fired power plants.”
Advocates recommend that 21%
of SBC funds be allocated for low income energy efficiency programs, 45.5% for
other energy efficiency programs, 28.5% for development of renewable energy
industries, and 5% for R&D and environmental monitoring. While advocates
support redirection of funds for long-term reduction of peak demand, groups strenuously object to the Department's
proposal to use SBC money to encourage the use of emergency diesel generators
during periods of high demand. "The idea that funds earmarked for clean
and energy efficient technologies could actually support the operation of
highly-polluting diesel generators in New York City on ozone alert days is hard
to justify," said Zalcman. Groups
note that these units emit asthma-causing nitrogen oxides (NOx) and small
particulates at a rate 100 times that of a modern power plant. "The concern for reliability is understandable,
but energy efficiency is clearly another way we can keep the lights on without
exposing people to new sources of lung-level pollution," Zalcman
concluded.
Advocates
strongly oppose the PSC staff proposal to sunset the program in five years,
which is based only on hope and predictions that the energy service marketplace
will have assumed provision of public benefit programs. The SBC should be
extended until New York has a flourishing competitive electric market and
barriers to the delivery of energy efficient and renewable technologies are
eliminated.
More than
any other single source, fossil-fuel power plants cause serious air pollution
problems. Nationwide, power plants are responsible for 66% of the sulfur
dioxide pollution that causes acid rain and soot pollution; 30% of the nitrogen
oxides that contribute to smog and acid rain; 21% of all mercury emissions; and
35% of the carbon dioxide that contributes to global climate change. In 1997 alone, NY’s 21 dirtiest power plants
emitted 250,000 tons of sulfur dioxide, 70,000 tons of nitrogen oxides, nearly
48 million tons of carbon dioxide, and over 700 tons of mercury into the air.
This pollution devastates New York’s air quality. During the summer of 1999,
there were 211 violations of federal ozone smog standards in the state. Over
half the people in New York State live within areas that fail to meet the
federal air quality standards for summer smog.
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- 30 -
[1] This coalition included Alternative
Power, Inc., American Lung Association of New York State, American Wind Energy
Association, Association for Energy Affordability, Building Code Assistance
Project, Citizens Advisory Panel of Long Island, Environmental Advocates,
Environmental Defense, Erie County Environmental Management Council, Healthy Schools
Network, Natural Resources Defense Council, New York League of Conservation
Voters, New York Public Interest Research Group, Pace Energy Project, Public
Utility Law Project, Sun Wize Technologies, West Harlem Environmental Action,
and Western New York Sustainable Energy Association.
