Legislative Memos

Memorandum in Strong Opposition - A.4503 (Thiele) / S.2042 (Gaughran)

A.4503 (Thiele) / S.2042 (Gaughran) - AN ACT to amend the public authorities law, in relation to the applicability of the freedom of information law to the Long Island Power Authority and the disclosure of third party power purchase agreements

The Independent Power Producers of New York, Inc. (IPPNY) is a trade association representing companies involved in the competitive power supply industry in New York State and in the development of electric generating facilities, the generation, sale, and marketing of electric power, and the development of natural gas transmission facilities. IPPNY Member companies produce the majority of New York's electricity, utilizing hydro, nuclear, wind, natural gas, solar, energy storage, biomass, oil, and waste-to-energy.

IPPNY strongly opposes A.4503 (Thiele) / S.2042 (Gaughran). This bill would cause serious harm to companies in competition with each other to provide electricity to meet the needs of consumers.

This legislation states that the Long Island Power Authority’s (LIPA) power purchase agreements with third parties shall be subject to full disclosure under the Freedom of Information Law. The bill would require LIPA to make such contracts available for public inspection and copying. The legislation explicitly specifies that LIPA shall not determine that such agreements are exempt from full disclosure because they contain trade secrets, which, if disclosed, would cause substantial injury to the competitive position of the subject commercial enterprise.

Some IPPNY Member company electric generating facilities provide electricity to LIPA’s customers under contracts with LIPA for capacity, energy and other energy-related services. Existing law and practice allow for the protection of confidential business information contained within those contracts, including trade secrets. For example, power plant owners are allowed to indicate which information is confidential and should not be disclosed, when they submit annual reports to the New York State Public Service Commission (PSC) and to the New York State Office of Real Property Tax Services.

Protecting the confidentiality of an electric generating facility owner’s financial data is essential because such information is a trade secret, the public disclosure of which would cause substantial competitive injury to the owner. The PSC has determined that such generation owner financial information must be protected from disclosure under the State’s Freedom of Information Law. The owner’s revenue and expense information currently are not known by anyone outside of the owner and its affiliates. The information is valuable to the owner because it allows the company to project future costs and expenses and, therefore, effectively plan and operate its business. Conversely, the information is extremely valuable to the owner’s contractual counterparties and competitors. Knowledge of the generation owner’s financial information can permit a competitor to derive the owner’s marginal costs by estimating its costs of producing electricity. Releasing this data publicly would disadvantage the generation owner because it would allow a competitor to underbid it, thereby driving it out of the market. Alternatively, making such data public can also place the generation owner at a negotiating disadvantage with customers in future bilateral arrangements. Most importantly, consumers could be harmed because disclosure of this information would likely result in higher costs and a less efficient market outcome than would have been possible had the information not been disclosed.

For the reasons stated above, IPPNY opposes A.4503 (Thiele) / S.2042 (Gaughran).