X Marks The Spot
By: Nancy Anderson, Ph.D.
June 29, 2011
The sun will not set on Article X, part of the recently signed "Power New York Act of 2011" governing the siting of new or the modification of large-scale power plants. An earlier version of Article X included a self-limiting sunset provision that phased out the law on January 1, 2003. Since that time, power project applicants have faced a gauntlet of state and local requirements in addition to the daunting financial challenges that appeared with the Great Recession of 2008 and from 2003 to the present only two permitted repowering projects raised the necessary capital. The new law has no sunset provision.
Here's what it does have. Article X lowers the project-permitting threshold from an eighty megawatt capacity down to twenty-five megawatts while it raises the cap on project-specific "intervener" funds, which come from license applicant fees, from $400,000 to $750,000.i It consolidates, streamlines and imposes a one-year time limit on the licensing process for new power plants while it adds expansive environmental justice, cumulative impact and CO2 emissions considerations. Environmental justice advocates hail the passage of the new Article X. For them, inclusion of statutory language that requires scrutiny of local level impacts associated with the proposed project and a cumulative impact analysis of air pollution - where all nearby sources of air pollution become part of the baseline measurement - are major achievements. According to Eddie Bautista, Director of the NYC Environmental Justice Alliance, "Article X will afford the strongest protections for environmentally overburdened communities of color by mandating - for the first time - cumulative impact analyses that measure a community's total environmental load....if a community is found to be disproportionately burdened, power plants applicants will have to commit to local, verifiable offsets of any projected pollution emissions before the plant can be sited".
Other environmentalists are equally pleased with Article X. Although New York State lacks a coherent energy policy, according to energy attorney Gail Suchman, Article X contains "the seeds" of an implicit policy of favoring repowering projects -- given a shorter statutory approval time -- over new projects and thereby acts as a tacit planning tool. The Alliance for Clean Energy New York sees benefits for clean energy projects like wind farms because the law removes "unnecessary delays and uncertainty" that prevent developers from making clean power investments. Natural Resource Defense Counsel attorney Donna de Costanzo notes, "Article X will be good for wind [power]" although it does not relieve the state's obligations to meet its overall renewable energy portfolio targets. Finally, while solar projects are less direct beneficiaries of Article X, since few of them are projected to meet the twenty-five megawatt permitting threshold, neither wind nor solar projects would add to any local baseline air pollution and thereby add to cumulative air pollution numbers.
Nevertheless, since New York is a state where power plant projects are proposed and developed by competing private firms rather than by monopoly-style utilities where capacity decisions are closely coordinated with the Public Service Commission, what the near future holds for new conventional or renewably powered plants will likely be determined by their access to financing and the fate of Indian Point.
What does Indian Point have to do with the passage of a permanent Article X? Despite decades of opposition to a nuclear power plant that operates 35 miles north of mid-town Manhattan and a vow by Governor Cuomo to shut it down, the federal Nuclear Regulatory Commission (NRC) holds almost all the licensing cards and the plant provides approximately 25% of the electricity for New York City and Westchester. Although Indian Point is nearly forty years old, its owner and operator, Entergy has applied to the NRC for renewed operating permits that will allow it to run for another twenty years. NRC decisions for each of the two generators at Indian Point will come by 2015. As such, any chance to permanently pull the plug on Indian Point will require significant planning starting now. If, during the next few years, there are credible signs that New York will be getting new non-nuclear projects underway, facilitated by the path created by Article X, it is conceivable that a deal could be struck for issuing short term operating licenses instead of the customary twenty year operating permits for Indian Point.
Taking a broader look at New York's energy future, it's worth asking what else needs to be done. Another bill included in the "Power New York Act of 2011" will make it easier to pay for home and business energy efficiency upgrades by creating a loan repayment mechanism to appear on customer utility bills. As reported in the New York Times, Dave Palmer, executive director of the Center for Working Families, an advocacy group that helped devise the program said, "This is a simple and creative solution to intertwined problems of climate change, joblessness and economic stagnation."
Passage of this "On-Bill Recovery" law is certainly worthwhile, but it only goes so far. Nothing in the legislation requires consumer action or sets statewide energy reduction or retrofit targets. It relies on committed utility customers to do what they can to save energy by improving the efficiency of their home or business. At a more systemic level, the "Power New York Act of 2011" adds neither momentum to the creation of a "smart" electric power grid nor contributes to the science and technology for developing batteries or other storage devices that will help reliably integrate wind and solar power into New York's power distribution system.ii What it adds to the state's energy capacity is a road map that consolidates the rules for threading through the regulatory maze in order to build or upgrade power plants, imposes timeframes and broadens the reach of the social equity of sharing the collective burdens imposed by the infrastructure we cannot live without. Arguably, that's enough for one statute.
i For non-lawyers, Article X is also called Article 10, not the letter "X".
ii The law gives a nod to solar power by requiring the New York State Energy Research and Development Authority to conduct a study of policy and administrative options for increasing the state's photovoltaic capacity to 2,500 megawatts in 2020 and 5,000 megawatts by 2025.