NEW YORK BUILDING CONGRESS ENERGY COMMITTEE MEETING ELEVEN MADISON PARK RESTAURANT
11 Madison Avenue
Thursday, May 29, 2003
8:30 a.m.

Summary of Discussion

Attendance: John J. Gilbert and William A. Harkins, Co-Chairmen, Richard T. Anderson, Kate Ascher, Carolyn Brown, John A. Cavanagh, Joe Chan, Cathleen B. Colella, Marolyn Davenport, Thomas DeJesu, Peter L. DiCapua, Kenneth A. Durr, Mike Kansler, Joel B. Landes, Joseph Littmann Jr., Edward J. Malloy, J. Robert Mann Jr., Alton G. Marshall, Eugene R. McGrath, James E. McMahon, Ronald W. Mineo, Louise M. Morman, Patricia Noonan, Bud Perrone, Gil Quiniones, Howard Rapaport, Frances Resheske, Jack Rudin, William Rudin, Maria Rybchevsky, Rosemary Scanlon, Harvey W. Schultz, Howard Shapiro, Stuart Silbergleit, Barry Sullivan, Kenneth Theobolds.

Co-chairman Bill Harkins welcomed Committee members and guests. He expressed appreciation to Mr. Rapaport and Forest Electric Corp. for hosting the breakfast.

Approval of Minutes
Mr. Harkins asked for and received approval of the minutes of the Energy Committee meeting of March 28, 2003. He also highlighted the discussion from that meeting, which included timely presentations by Charles Fox of the Governor’s office and Peter Smith, Acting President of the New York State Energy Research and Development Authority.

Mr. Harkins also called attention to the new report of the Independent System Operator, released earlier in the week, which indicates that New York State’s electricity supply is adequate for a “normal” summer, but still requires 5,000 MW of additional capacity over the next five years. A copy of the ISO Press Release is attached to this summary. Copies of the full report can be obtained from www.nyiso.com.

Summer Outlook
Con Edison Chairman Eugene R. McGrath discussed the outlook for New York City’s electricity situation over the coming summer. The peak load last summer was 12,400 MW, and Con Edison expects 12,650 MW this summer. He said both peak use and overall demand are growing, largely due to continually increasing residential demand. He said 85% of New York City households now have at least one air-conditioner, and this is expected to grow to 95% over the next ten years. In addition, household occupancy is growing during the day and residential construction has been increasing rapidly in recent years.

Mr. McGrath said overall load growth is growing 1.8% annually. Con Edison is concerned that commercial growth may increase before new capacity is in place. The situation is “the tightest it has ever been.”

On the distribution side, the Con Edison system needs constant attention. The company has twenty diesel generators around the City already, and this number could increase, unless new sub-stations are completed in the areas like Chelsea.

Mr. McGrath was pleased to report that the 500 MW request for proposal has resulted in an agreement with SGS Energy. Their plant in Astoria is expected to be completed by 2006.

In discussion, the committee asked Mr. McGrath about the TransGas project in Williamsburg opposed by the Bloomberg Administration. Mr. McGrath said there is “a real tension between energy needs and where to put new supply in New York City.”

Bill Rudin asked about Con Edison’s plans for responding to a rebound in commercial growth. Mr. McGrath said the twin challenges of new supply and added distribution capacity require constant attention. On the distribution side, he said, the only solution may be more generators in key areas. Price stability may be difficult to achieve and conservation is an ongoing challenge. One important step is to find ways to upgrade old inefficient air-conditioners and other appliances.

New York City Energy Policy
The committee was briefed by Joe Chan, Senior Policy Advisor to Deputy Mayor Daniel L. Doctoroff, on the Bloomberg Administration’s energy efforts. He said the Mayor is expected to issue a comprehensive energy policy within the coming weeks. This will be targeted to new generation, which is compatible with surrounding areas, and to important resource-conserving steps to achieve lasting conservation. He said the Administration will suggest sitting criteria and proactive steps to achieve reliable and efficient energy in the City. He emphasized that the public needs to know what the City’s role is going to be going forward. Before the policy is released, he said it would be shared with the Committee.

The new Economic Development Corporation Executive Vice President for Infrastructure, Kate Ascher, added that the Administration’s energy policy will be directly in line with the Energy Committee’s positions. She said the Mayor has articulated comprehensive policy statements in a number of areas, and energy will be consistent with them.

Mr. Chan and Ms. Ascher were asked about the TransGas project. They said the project itself is not the problem but its location. The Administration is seeking to re-plan and re-zone the Queens East River waterfront, and the TransGas project is not considered compatible. City officials are working with TransGas to find an alternative site.

Albany Report
James E. McMahon, who represents the Building Congress in Albany, said Article X reauthorization may not be resolved before the State Legislature adjourns on June 19. He said the budget battle caused a major rift between the Governor and Senate Majority Leader Joseph Bruno, which is impacting many pieces of potential legislation.

Mr. McMahon also pointed to the recent ISO report and an update of the Assembly’s energy position by Paul Tonko.

Mr. Shapiro added that Governor Pataki is expected to submit an Article X reauthorization bill shortly. But he does not expect it to be adopted during this session.

Organization Updates
Co-Chairman John Gilbert reminded the committee that the only reason New York City has not had major energy problems in recent years is voluntary load shedding by large consumers. This is important and will be continued, but cannot be relied upon for an extended period. He said the committee and its participating organizations need to maintain a sense of urgency.

Marolyn Davenport and Patty Noonan said the Real Estate Board and Partnership for New York City are continuing their efforts to achieve a voluntary conservation and peak load shedding. The problem is sustaining this every year.

Before adjourning, Jack Rudin reminded everyone that this is a partnership among business, labor and government on an extremely important subject. He said the Mayor’s leadership at this time is critical.

Adjournment
There being no further business, the meeting was adjourned at 9:30 a.m.

Prepared by
Richard T. Anderson
President