Senate Bill S7208

                                 BILL NUMBER:  S7208

 TITLE OF BILL :
An act directing the power authority of the state of New York to
release requests for proposals on certain natural gas powered
generating facilities in and around New York city


 PURPOSE OR GENERAL IDEA OF BILL :
To raise revenue for the state through the sale of numerous "peaker"
generators in and around New York City.

 SUMMARY OF SPECIFIC PROVISIONS :
Section 1. Outlines that the New York Power Authority shall issue an
RFP for 10 gas turbine electric generating facilities.

Directs the authority to report on the range of solicited bids to the
governor, the temporary president of the senate, and the speaker of
assembly. NYPA is also authorized to make contributions to the State
treasury to the credit of the general fund in the amount of the
revenue collected by the authority from the sale of facilities
pursuant to this section on or before March 31, 2011.

Section 2: States this act shall take effect immediately.

 JUSTIFICATION :
              

As New York State continues to face increasing budget shortfalls, it
is in the interest of all New Yorkers for its government to see new,
yet responsible, means of obtaining additional revenue.  Such
opportunities include the transferring of publicly owned and operated
entities assists the state financially not only through an up-front
infusion of revenue and future tax earnings but by reallocating future
risks and costs (both known and unforeseen) from the public sector to
the private sector.

An ideal candidate for such an endeavor is the New York Power
Authority (NYPA). NYPA should issue a Request for Proposals (RFP) to
sell its small, natural gas-powered facilities in an around New York
City, thereby providing independent power producers with the
opportunity to help trim the budget shortfall while, as the same time,
applying their expertise to the operation of those facilities.  If an
RFP for those generating facilities was issued, it is possible for New
York State to bring in significant revenue to help during these tough
economic times, while also securing future tax revenues to benefit the
state for years to come. Furthermore, operating costs associated with
these facilities no longer will be a burden on NYPA, as all costs and
risks associated with owning and operating the facilities would be on
the shoulders of private companies.

In the Summer of 2001, NYPA began operating ten natural gas-powered
generating facilities at six sites in New York City and one on Long
Island, thereby adding approximately 450 megawatts of energy to NPA's
portfolio. These facilities were intended to be used as "peaker"
plants, needed only in times of extremely high demand or in case of
emergency. Since that time, additional resources have emerged as
providers of energy to New York City. Also, the New York Independent
System Operator (NYISO) has recently predicted very low increases in
energy demand for the near future. These factors have led the NYISO to
determine that New York City has no additional reliability needs for
approximately the next decade. Combined, these facts should allay any
of the concerns that prompted NYPA to build these unites in the first
place and open the door for their transition to the private sector.

It would not be the first time that NYPA sold some of its assets to
the private sector. As it is likely that the private sector would be
interested in NYPA's small generation facilities as well. While it is
impossible to predict potential offers, it should be noted that, in
2008, TransCanada Corporation purchased the Ravenswood Generating
Facility in Queens from National Grid for $2.8 billion---a price that
exceeded expectations and demonstrates the level of interest that the
private sector takes in worthwhile assets.

 PRIOR LEGISLATIVE HISTORY :
New Bill.

 FISCAL IMPLICATIONS :
To be determined. The RFP will provides with an accurate value, but
estimates are that these facilities are worth hundreds of millions of
dollars.

 EFFECTIVE DATE :
This act shall take effect immediately.