S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4309
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 2, 2017
                                ___________
 
 Introduced by M. of A. QUART -- Multi-Sponsored by -- M. of A. MOSLEY --
   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:
   § 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.
                                                            LBD08923-01-7
              

 A. 4309                             2
 
   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.
   § 2. The public service law is amended by adding a new section 77-b to
 read as follows:
   § 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 TWENTY.
   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. 4309                             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.
   § 3. This act shall take effect immediately.