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Testimony of
New York State Senator Liz Krueger Before the
Department of Public Service Regarding a
Renewable Portfolio Standard June 14th,
2004 Good
morning. My name is Liz Krueger and I
am the State Senator for New York’s twenty-sixth senatorial district, one
primarily comprising parts of Manhattan’s Midtown and East Side. I appreciate the opportunity to testify at
this public forum on renewable energy standards. New
York State is compelled to be ever more vigilant in protecting both our
natural resources and the reliability of our electricity system. Current national trends have increased the
environmental and transmission threats we must address, as both the federal
government and other states have relaxed pollution and reliability standards. Unfortunately, geography and the physical
laws of alternating current have left New York too dependent on the actions
of government’s outside our borders.
Even though New York has energetically sought to combat the ill
effects created by others—while simultaneously implementing some of the
nation’s most stringent environmental and energy standards—the results of
external weakening of protections are evident and worrisome: our lakes are
acidic; our air is contaminated; our energy supply is tenuous; our
transmission system is fragile. One
reason that New York is now confronted by large-scale problems that have
accumulated in number and increased in severity over time is that state
policies, though forceful and innovative, have often been reactive, not
proactive. Fortunately, the proposed
adoption of a Renewable Portfolio Standard presents the state with an
opportunity to address alarming environmental deterioration and dangerous
energy uncertainty. A Renewable
Portfolio Standard also affords New York the opportunity to abandon the reactive,
myopic operational modality of policy implementation that has left us on the
precipice of an uncertain future and to instead embrace a proactive, cohesive
planning process that will enable the state to avoid such an ominous plunge. The
proposed Renewable Portfolio Standard (RPS), currently under consideration
and recently ruled upon by Administrative Law Judge Eleanor Stein, would
mandate that New York State increase its active retail supply of electricity
generated from renewable sources to twenty-five percent by 2013. This is an important ruling. Meeting this target will be a win/win for
the people of our State. While
New York is already among the United States’ leaders in renewable energy
usage, it still relies heavily upon fossil fuels that are known to pollute
the environment and demonstrably impair public health. Fossil fuels, even the cleaner-burning
natural gas, release global-warming contributing carbon dioxide, acid-rain
producing sulfur dioxide, and smog-causing nitrogen oxides, all of which have
significantly harmed New York’s natural resources. These fuel sources, by definition, are also finite in supply
and, subsequently, volatile in price and availability. For too long, New York—and in a larger
sense, the United States—has depended upon these dirty and harmful energy
sources to an embarrassing and detrimental extent. In
fact, recent proposals—misguided decisions owing to willful neglect in the
past of the looming energy crisis—to drill for fossil fuels in Alaska and
construct expensive and vulnerable gas pipelines across great distances seem
desperate when one considers the benefits that renewable energy sources will
offer our environment’s health and our energy system’s reliability and
markets, to say nothing of the greater social, health, and economic impacts. New
York State studies have estimated that implementing the RPS will reduce
natural-gas and oil-powered generation by nine percent and lead to a
5.22-percent reduction in nitrogen oxides emissions, a 6.04-percent reduction
in sulfur dioxide emissions, and a 7.43-percent reduction in carbon dioxide
emissions. These decreases in air
pollution will preserve the health of New York’s environment and diminish
exposure to the unhealthy air that has recently contributed to a higher
preponderance of respiratory ailments among New York’s population. Adopting
an RPS will also begin to ameliorate outstanding energy-market volatility
that has arisen, partially, because though renewables are capable of
replenishment and abundant within our own borders, the fossil fuels on which
New York currently depends are limited in quantity, foreign in origin, and
erratic in availability. As this
state continues to grapple with the often difficult process of energy
industry deregulation, legislators and policy makers must employ all the
tools at our disposal—like a Renewable Portfolio Standard—to protect the
wholesale and retail markets, making them competitive for participants and
encouraging for investors. Economic
benefits reaped from adopting an RPS will reverberate in more places than
just the market. Contrary to fears that a mandatory introduction of new, and
accordingly expensive, power-producing technologies will inflate the
procurement costs for utilities and subsequent end-user costs for residential
electricity customers, the state forecasts that some electricity customers
will see a 1.74-percent reduction in their monthly bills. Meanwhile, those customers who do
experience an increase in electricity prices will pay an average of 1.58 percent
more each month. In more tangible
terms, were this latter group of customers already paying monthly $50 utility
bills, they would each owe roughly 75 cents more per month. When considered so starkly, the question
of whether implementing an RPS is worth the cost seems almost rhetorical
given what should be an apparent answer.
And were these economic details not persuasive enough, skeptics should
consider that markets and human ingenuity have repeatedly taught us that the
best way to drive down the costs of new technology is to deploy it sooner
rather than later. Renewable energy
prices will fall over time as new electricity generation methods proliferate. As
I stated earlier, New York is in dire need of a cohesive and comprehensive
energy system schematic. The blackout
that paralyzed New York and much of the Northeast last August was a harrowing
reminder that our current energy transmission system is fragile and in need
of fortification. The New York
Independent System Operator has performed admirably, consistently advocating
that reliability remain the paramount consideration when developing and
implementing energy policies. I would
like to reiterate this point, because it cannot be overstated: the reliability of our electric supply is
of the utmost importance. I
hope that the discussion and adoption of the RPS will make salient New York’s
need for a comprehensive energy plan that allows for growth and market
functionality while prioritizing reliability. The long-term planning process should be an inclusive and
exhaustive effort that examines all means of improvement—perhaps, for
instance, partially insulating New York from the lax reliability standards in
connected states by installing direct-current ties at key grid access points. A large-scale electricity plan should
galvanize all those who participate in the generation and transmission
system, defining a New York electricity environment in which cleaner fuels,
newer technologies, better markets, and greater reliability allow for growth
and competition. Adopting
the proposed Renewable Portfolio Standard is one preliminary measure that
will help initiate this planning and strengthen reliability. Earlier, I noted the detrimental impact
fossil-fuel reliance has made on wholesale energy markets. Depending on these fuel supplies also
imperils New York’s electricity reliability, subjecting our power supply to
their unpredictable availability and startling price inflation. Continued fossil-fuel reliance portends of
many problems in the future. However,
the RPS can allay many of these concerns, contributing to the fortification
of our energy supply and transmission system by diversifying the state’s
energy portfolio and mitigating the impacts of dirty-fuel volatility. Fossil fuels also carry with them higher
security costs given their potential chemical instability, a point well
documented by the National Conference of State Legislatures. As renewables become a larger portion of
the state’s energy portfolio, New York and its energy industry will enjoy
fewer fuel-supply security costs and increased assurance that the electricity
required by every node in the system will be available. New
York must adopt an RPS as soon as it can so that our state can become
cleaner, healthier, safer, and stronger.
A Renewable Portfolio Standard will protect the environment, promote
better health, and make our electricity transmission system more
reliable. These changes will require
immediate, significant capital investment.
However, New York cannot afford to wait for the energy industry to
decide when it wants to begin the twenty-first century. The up-front costs might be high, but the
back-end savings will be greater: energy prices will come down; secondary and
tertiary costs of irresponsible electricity generation—like pollution and the
healthcare needed for respiratory afflictions—will decline; and our
transmission system will become safer and more reliable. Thank you very much for the opportunity to
speak today. |
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