Legislative Memos

Memorandum in Strong Support A.10530 (Morelle) / S.7391 (Maziarz)

Memorandum in Strong Support
June 11, 2012

A.10530 (Morelle) / S.7391 (Maziarz) - AN ACT to amend the transportation corporations law, in relation to the powers of gas and electric corporations

The Independent Power Producers of New York, Inc. (IPPNY) is a trade association representing companies involved in the development of electric generating facilities, the generation, sale, and marketing of electric power, and the development of natural gas facilities in the State of New York. IPPNY Member companies produce approximately 75 percent of New York’s electric power.

IPPNY strongly supports A.10530 (Morelle) / S.7391 (Maziarz). These bills would limit the use of eminent domain only to activities that achieve a public use, benefit or purpose that maximizes benefits to New York State. Existing law on eminent domain establishes the procedure by which property is acquired by exercise of the power of eminent domain in New York State and defines “public project” to mean “any program or project for which acquisition of property may be required for a public use, benefit or purpose.” These bills reflect the focus of that definition.

A.10530 (Morelle) / S.7391 (Maziarz) would prevent certain electric corporations from having the power of eminent domain: (1) those that seek, either through themselves or through one or more affiliated interests, to build or expand transmission lines connecting a location outside the territorial limits of the United States to a location within New York State and (2) those that seek, either through themselves or through one or more affiliated interests, to build or expand an electric generating facility outside the United States and to interconnect it to a location within New York State.

This legislation is consistent with existing New York State law that already contains provisions that limit the ability of certain companies to use eminent domain; as a result, A.10530 (Morelle) / S.7391 (Maziarz), does not set a new precedent and does not limit other future projects from occurring, including the kind of projects the state should be encouraging for economic development and electric reliability reasons.  

For  example, current New York State law restricts the use of eminent domain power by any merchant transmission company whose line commences and ends in New York State, will increase electric rates in any part of the state, and did not receive an early designation as a (now defunct) National Interest Electric Transmission Corridor (Subdivision 7 of Section 11 of Article 2 of the Transportation Corporation Law (TCL) enacted as on October 3, 2006 as Chapter 741 of the Laws of 2006). New York Regional Interconnect (NYRI) filed in federal district court a lawsuit seeking to invalidate this law, but the petition was dismissed by the district court judge (New York Regional Interconnect, Inc. v. Pataki, et al., 07-CV-122, Transcript of Judge’s decision (N.D.N.Y Nov. 15, 2007).).

A.10530 (Morelle) / S.7391 (Maziarz) would ensure that eminent domain is available for the construction and development of transmission and generation facilities and infrastructure in New York State, rather than outside the country, as in-state facilities maximize energy system reliability, employment and economic development in New York State and in our nation. If developers of transmission lines from outside of the United States were able to use New York’s eminent domain powers to gain special access to New York’s waterways and rights-of way, and to pass through many New York State communities, they would not sufficiently encourage New York State economic development.  

New York State’s eminent domain powers should not be available to enable projects that would import power from another country when greater value is derived by investing in New York’s own electric system. New York State power producers employ over 10,000 workers and have invested over $10 billion worth of private energy infrastructure development in New York in the last decade; they also pay annual taxes of more that $600 million and provide more than $50 million to their communities.  However, New York State generation resources are struggling like most businesses in today’s economy. In fact, several power facilities have retired already. Others are contemplating doing so, thereby putting at substantial risk hundreds of well-paying, essential jobs for New York’s workforce and the contributions of millions of dollars of property taxes for, and other payments to, localities made by New York generators. The importation of power from outside of the United States that is made possible by the use of New York’s eminent domain privileges further would jeopardize the economic stability of New York State generation resources and the benefits they provide to local communities.  

For the reasons stated above, IPPNY strongly supports A.10530 (Morelle) / S.7391 (Maziarz).