Memorandum in Opposition - S.7006-A (May) / A.7768-A (Kelles)

S.7006-A (May) / A.7768-A (Kelles) - AN ACT to amend the public service law, in relation to certificate and permit conditions for dormant power generating facilities that are in layup or out of service

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 opposes S.7006-A (May) / A.7768-A (Kelles). This legislation is unclear and could have broader unintended consequences.

The legislation would change Article 10 of the Public Service Law, which is the State’s power plant siting law, by adding a new section to provide that an Article 10 certificate, along with air and water permits of the New York State Department of Environmental Conservation, cannot be transferred for power plants sited prior to 2012 that have provided notice of being “in lay-up or out of service.” The bill further provides that type of facility cannot use a fossil fuel without getting a new Article 10 certificate and air and water permits. The bill would take effect 180 days after enactment.

Existing Article 10 law provides that: “A certificate may be transferred, subject to the approval of the {Siting} board, to a person who agrees to comply with the terms, limitations and conditions contained therein.” Current law already provides oversight by requiring the approval of the Siting Board for transfer, and, therefore, this legislation is unnecessary. 

Additionally, the transfer of generating facilities and their permits is a well-established and necessary practice that supports the State’s interest to attract investment and keep permitted energy generation facilities available to meet the State’s energy needs as we increasingly transition to renewable energy sources. Moreover, given the global energy crisis and supply-side limitations, it is prudent and necessary to ensure existing generating sources may remain available to provide safe, reliable, and affordable energy to the people of New York State. This bill would undermine the State’s clean energy transition by prematurely restricting the availability of existing generation options today.

Further, the New York State Public Service Commission has recognized that a facility that permanently retires requires a new Article 10 certificate. However, for facilities in layup or out of service, it would be unreasonable to preclude the transfer of certificates and air and water permits. A facility may be in temporary layup due to economics but would otherwise be able to come back into service, or it may require time to design, procure and implement significant facility upgrades and major repairs.

The legislation also could apply to facilities that are in forced outage due to a catastrophic event. At the direction of the New York Independent System Operator, these types of facilities could be required to submit a repair plan, and, if the facility is not immediately repairable and returned to service, it would go into a form of mothball that might conflict with the “in layup or out of service” provision under the legislation.

Because the legislation would impose a blanket prohibition on the transfer of any air and water permits, it could negatively impact not just the sale of an existing power plant, but also could be a barrier to sites being sold for redevelopment and other non-utility purposes.  Power plants are often important employers and local taxpayers in a community, and this bill could harm host communities by creating additional barriers for a site’s current use and make it more difficult to transfer and transition such industrial sites for redevelopment and productive reuse because certain existing permits may still be necessary for the management of the site during the transition.

For the reasons stated above, IPPNY opposes S.7006-A (May) / A.7768-A (Kelles).

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