S T A T E O F N E W Y O R K
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4666
2015-2016 Regular Sessions
I N A S S E M B L Y
February 5, 2015
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Introduced by M. of A. QUART -- read once and referred to the Committee
on Energy
AN ACT to amend the public service law, in relation to the regional
greenhouse gas initiative
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The public service law is amended by adding a new section
77-a to read as follows:
S 77-A. LEGISLATIVE INTENT. THE LEGISLATURE HEREBY FINDS AND DECLARES
THAT IT IS IN THE BEST PUBLIC POLICY INTERESTS OF THE STATE, ITS BUSI-
NESSES AND ITS CITIZENS TO ENSURE THAT, TO THE GREATEST EXTENT POSSIBLE,
THE LETTER AND SPIRIT OF ITS ENVIRONMENTAL REGULATIONS AIMED AT REDUCING
CARBON DIOXIDE EMISSIONS AND IMPROVING AIR QUALITY UNDER THE REGIONAL
GREENHOUSE GAS INITIATIVE (RGGI), ESTABLISHED BY REGULATION OF THE
DEPARTMENT OF ENVIRONMENTAL CONSERVATION, ARE ENFORCED FOR ANY GENERATOR
WHO DOES BUSINESS IN THE NEW YORK STATE ENERGY MARKET.
THIS POLICY CHANGE IS NECESSARY BECAUSE STATES THAT SURROUND NEW YORK
THAT DO NOT PARTICIPATE IN RGGI, BUT WHO DO EXPORT POWER TO NEW YORK
STATE, HAVE A DISTINCT COMPETITIVE ADVANTAGE OVER IN-STATE POWER GENERA-
TORS. WHILE THE GOALS OF THE RGGI PROGRAM ARE LAUDABLE, IN-STATE FOSSIL
FUEL GENERATORS ARE EXPERIENCING SIGNIFICANT INCREASES IN THEIR COSTS AS
A RESULT OF THE NEED TO BUY CARBON DIOXIDE EMISSION ALLOWANCES IN THE
RGGI AUCTION, ESTABLISHED BY REGULATION OF THE NEW YORK STATE ENERGY AND
RESEARCH DEVELOPMENT AUTHORITY. HOWEVER, OUT-OF-STATE FOSSIL FUEL GENER-
ATORS IN NON-RGGI STATES MAY USE THE SAME EXACT FUEL AND PRODUCE THE
GREATER EMISSIONS ASSOCIATED WITH THAT FUEL, BUT ARE STILL ABLE TO
EXPORT POWER TO NEW YORK AT A CHEAPER PRICE BECAUSE THEY ARE NOT SUBJECT
TO THE COSTS ASSOCIATED WITH RGGI. THIS STATE OF AFFAIRS HURTS IN-STATE
POWER GENERATORS, THREATENS JOBS AND ENCOURAGES THE IMPORTATION OF
POLLUTION INTENSIVE POWER FROM OTHER STATES.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04510-01-5
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THE LEGISLATURE FURTHER DECLARES THAT IT IS IN THE BEST ECONOMIC AND
ENVIRONMENTAL INTERESTS OF THE STATE TO ADOPT POLICIES THAT SUPPORT JOB
RETENTION AND CREATION IN THE POWER GENERATION SECTOR IN THE STATE OF
NEW YORK, AND TO SEEK TO LIMIT POLLUTION AND ENVIRONMENTAL DEGRADATION
WHETHER IT EMANATES FROM WITHIN THE STATE OR FROM ANOTHER STATE. THE
COMMISSION WORKING WITH THE NEW YORK STATE ENERGY RESEARCH AND DEVELOP-
MENT AUTHORITY AND THE FEDERALLY DESIGNATED BULK SYSTEM OPERATOR, ARE
THE STATE ENTITIES WITH THE EXPERTISE AND AUTHORITY TO RECTIFY THIS
PROBLEM THROUGH APPROPRIATE REGULATORY ACTIVITY.
THEREFORE, THIS LEGISLATION DIRECTS THE COMMISSION TO INITIATE A
STAKEHOLDER PROCESS, CONSISTENT WITH SECTION SEVENTY-SEVEN-B OF THIS
ARTICLE, WITH THE GOAL OF THE COMMISSION ISSUING AN ORDER AIMED AT ELIM-
INATING ANY UNFAIR FINANCIAL OR ENVIRONMENTAL ADVANTAGE THAT AN OUT-OF-
STATE POWER GENERATOR MAY ENJOY BECAUSE THE STATE IN WHICH IT IS LOCATED
DOES NOT PARTICIPATE IN THE RGGI PROGRAM.
S 2. The public service law is amended by adding a new section 77-b to
read as follows:
S 77-B. REGIONAL GREENHOUSE GAS INITIATIVE; EFFECT ON ELECTRICITY
MARKETS. 1. THE COMMISSION IS HEREBY AUTHORIZED AND DIRECTED TO DEVELOP
A MECHANISM FOR THE PURPOSE OF ELIMINATING, OR MINIMIZING TO THE GREAT-
EST EXTENT PRACTICABLE, THE COMPETITIVE ADVANTAGES IN THE STATE'S ELEC-
TRICITY MARKETS THAT OUT-OF-STATE POWER GENERATORS HAVE OVER IN-STATE
POWER GENERATORS DUE TO NEW YORK STATE'S PARTICIPATION IN THE REGIONAL
GREENHOUSE GAS INITIATIVE, ESTABLISHED BY REGULATION OF THE NEW YORK
STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION. SUCH MECHANISM SHALL BE
DEVELOPED PURSUANT TO A STAKEHOLDER PROCESS THROUGH A PROCEEDING TO BE
ESTABLISHED BY THE COMMISSION WITHIN ONE MONTH OF THE ENACTMENT OF THIS
SECTION. THE COMMISSION MAY, IN ITS DISCRETION, CONSULT WITH THE NEW
YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY AND THE FEDERALLY
DESIGNATED BULK SYSTEM OPERATOR SERVING NEW YORK STATE'S ELECTRIC SYSTEM
IN DEVELOPING SUCH MECHANISM. WITHIN SIX MONTHS OF THE COMMISSION
HAVING ESTABLISHED A PROCEEDING PURSUANT TO THIS SECTION, THE DEPARTMENT
SHALL ISSUE A REPORT, BASED UPON THE STAKEHOLDER PROCESS IN SUCH
PROCEEDING, THAT DESCRIBES THE MECHANISM, ITS FUNCTION, ITS POSITIVE
ATTRIBUTES, AND ANY OF ITS ANTICIPATED NEGATIVE CONSEQUENCES, AS WELL AS
HOW THOSE CONSEQUENCES COULD BE MINIMIZED OR MITIGATED. SUCH REPORT
SHALL BE PROVIDED FOR PUBLIC STAKEHOLDER REVIEW AND COMMENT DURING A
THREE MONTH PERIOD. WITHIN ONE MONTH OF COMPLETING THE PUBLIC STAKE-
HOLDER REVIEW AND COMMENT PERIOD ON SUCH REPORT, THE COMMISSION SHALL
REVISE SUCH MECHANISM, AS NEEDED AND TAKING INTO ACCOUNT SUCH PUBLIC
STAKEHOLDER COMMENTS, AS THE COMMISSION DEEMS TO BE IN THE PUBLIC INTER-
EST AND CONSISTENT WITH THE LEGISLATIVE INTENT EXPRESSED PURSUANT TO
SECTION SEVENTY-SEVEN-A OF THIS ARTICLE. WITHIN THREE MONTHS OF SUCH
MECHANISM HAVING BEEN REVISED, AS NEEDED, AND MADE AVAILABLE TO STAKE-
HOLDERS IN SUCH PROCEEDING, THE COMMISSION SHALL ISSUE AN ORDER IMPLE-
MENTING SUCH MECHANISM NO LATER THAN JULY FIRST, TWO THOUSAND EIGHTEEN.
2. FOR THE PURPOSES OF THIS SECTION AND SECTION SEVENTY-SEVEN-A OF
THIS ARTICLE, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
A. "COMPETITIVE ADVANTAGE" SHALL MEAN ANY ADVANTAGE OR BENEFIT, FINAN-
CIAL OR OTHERWISE, THAT EXISTS FOR AN OUT-OF-STATE POWER GENERATOR IN
CONNECTION WITH THE IMPOSITION OF THE REQUIREMENTS OF THE REGIONAL
GREENHOUSE GAS INITIATIVE, ESTABLISHED BY REGULATION OF THE NEW YORK
STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, ON IN-STATE POWER GENER-
ATORS. A "COMPETITIVE ADVANTAGE" MAY INCLUDE, AMONG OTHER THINGS,
AVOIDED COSTS SUCH AS INFRASTRUCTURE IMPROVEMENTS, TAXES, PENALTIES,
A. 4666 3
COSTS OF ENVIRONMENTAL COMPLIANCE, AND ADMINISTRATIVE AND REPORTING
COSTS.
B. "IN-STATE POWER GENERATOR" SHALL MEAN A POWER GENERATOR PHYSICALLY
LOCATED IN NEW YORK STATE.
C. "OUT-OF-STATE POWER GENERATOR" SHALL MEAN A POWER GENERATOR PHYS-
ICALLY LOCATED IN A STATE OR PROVINCE THAT DOES NOT PARTICIPATE IN THE
REGIONAL GREENHOUSE GAS INITIATIVE, ESTABLISHED BY REGULATION OF THE NEW
YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, THAT IS SELLING
POWER IN NEW YORK STATE.
S 3. This act shall take effect immediately.