Commentary on State Agency Support of REV

Reforming the Energy Vision (REV) is Governor Cuomo’s plan to “rebuild, strengthen and modernize New York’s energy system. Three state agencies are primarily involved in REV are the New York Public Service Commission (PSC), New York State Energy Research & Development Authority (NYSERDA), and New York Power Authority (NYPA). This post presents my impression of how those agencies are dealing with REV.

Disclaimer: I am writing this series of posts on REV because I am convinced that this whole thing is going to end as an expensive boondoggle and drive electricity prices in particular and energy prices in general significantly higher. Before retirement from the electric generating industry, I was actively analyzing energy and air quality regulations that could affect company operations. The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.

First, keep in mind that REV has been invoked by executive decision without legislative involvement. Coupled with the Cuomo Administration’s unprecedented involvement in these agencies it is clear that there has been no independent review of the program. Moreover, I fear that the interests of the public have been subsumed by the Governor’s agenda.

The PSC is the public utilities commission of the New York state government that regulates and oversees the electric, gas, water, and telecommunication industries in New York as part of the Department of Public Service. Oversight of the Commission is provided by a Board of appointees which is supposed to be nominally bipartisan but Cuomo has filled it mostly with allies who rarely if ever defy his wishes on energy policy. According to an article in Politico: “It’s an agency that carries out the governor’s orders regardless of the impact on the ratepayers,” Earthjustice attorney Chris Amato said of the utility regulator. “The public process is a charade, it’s a play act.” I could not agree more.

NYSERDA is supposed to develop and implement new energy technologies for the good of New York State. Under the Cuomo administration the description of the history of the organization has changed. On October 4, 2011 the NYSERDA website said: “NYSERDA’s earliest efforts focused solely on research and development with the goal of reducing the State’s petroleum consumption.” Today the NYSERDA website’s history description states: “During the energy crisis of the 1970s, oil embargoes made the United States acutely aware that the world’s petroleum supplies were finite. NYSERDA’s earliest efforts focused solely on research and development of renewable energy technologies with the goal of reducing New York State’s petroleum consumption.” However, in New York Law for Public Authorities, Article 8, Title 9, §1854 Purposes and specific powers of the authority there is no suggestion that the focus should be solely on renewable energy:

The purposes of the authority shall be to develop and implement new energy technologies consistent with economic, social and environmental objectives, to develop and encourage energy conservation technologies, to promote, develop, encourage and assist in the acquiring, constructing, improving, maintaining, equipping and furnishing of industrial, manufacturing, warehousing, commercial, research and industrial pollution control facilities at the Saratoga Research and Development Center, and to promote, develop, encourage and assist special energy projects and thereby advance job opportunities, health, general prosperity and economic welfare of the people of the state of New York.

The New York Power Authority (NYPA) is the largest state public power organization in the United States. NYPA provides some of the lowest-cost electricity in the nation, operating 16 generating facilities and more than 1,400 circuit-miles of transmission lines. According to the website history: NYPA was originally founded by Franklin Roosevelt as a public power provider for “cheaper electricity in 1931 it was not until St Lawrence power project was developed in 1952 that the first major hydro project was developed. That was followed soon thereafter by the Niagara Power project. The website history’s timeline makes for interesting reading because it makes apparent the use of NYPA for politically convenient intervention. Not surprisingly this trend has continued under the Cuomo Administration. As one of the three main components of REV, “NYPA will also ‘lead by example’ in developing innovative and transparent solutions to reduce energy demand, for which it will hold itself accountable as a model for the rest of the State.” My impression is that this is license to do whatever the Administration wants vis-à-vis REV.

Ultimately, my impression is that New York State ratepayers are on their own with regards to the impacts of REV.

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