Testimony of Richard T. Anderson, President New York Building Congress before New York City Council Committee on Environmental Protection City Hall

May 7, 2002

The New York Building Congress appreciates the opportunity to speak before the City Council Committee on Environmental Protection regarding Resolution No. 64 calling on the City of New York to support the immediate shutdown of the Indian Point Energy Center until comprehensive safety studies are completed and adequate security measures are taken. Based on thorough research and two comprehensive reports on the electricity outlook for New York City, the Building Congress has concluded that the proposed resolution is ill advised and should not be adopted.

Just last month, the Building Congress published Electricity Outlook: A Call to Action, which documents the need for 2,000-3,000 additional megawatts (MW) of electric capacity in New York City by 2006. This report was co-sponsored by the Association for a Better New York, Building & Construction Trades Council of Greater New York, Natural Resources Defense Council, New York City Partnership, and Real Estate Board of New York. Our coalition called for efforts to increase the City's electric capacity, to clean up existing power plants, to enhance energy efficiency measures, and to increase the use of clean distributed generation technologies.

In our collective judgement, the downstate area of New York has very little margin for error over the next several years. Despite the addition last year of ten emergency power generators and a decrease in office space from the destruction of the World Trade Center, overall electricity demand has remained stable in the City and certainly will increase in the next five years.

According to our report, about 600 megawatts of new capacity is needed over the next five years to ensure reliability; another 800-1,000 MW is needed to keep electricity prices from spiraling out of control as they did in summer 2000; and 700-1,800 MW is required to replace aging power plants with new facilities that offer more efficient technology and environmental benefits.

While more than a dozen new generating plants have been proposed for the City by a number of private companies, none of these facilities is currently under construction and few are expected to be in service by 2006. The long regulatory process is at least partly to blame for delays, but recent changes in financing are adding to concerns that even plants with necessary approvals may not be constructed.

We urge the City Council to assess objectively the overall energy situation facing New York City. Reliable and competitively priced electricity is critically important to New York's future.
We need an approach that balances conservation with increased generating capacity.
We cannot solve the current challenge without new generation and, perhaps most important, we cannot afford to lose any existing generating capacity serving New York City. The Indian Point Energy Center provides reliable, cost-effective energy for the downstate area. Reducing the area's energy supply by 2,000 megawatts in the near future would have a devastating impact on the region's economy and on consumer electricity rates.

The Building Congress has recommended a range of measures that would ensure clean, reliable and affordable electricity in New York City. These recommendations include:

• Create new generating facilities in New York City providing 2,000-3,000 MW by 2006.
• Emphasize and encourage ongoing energy efficiency measures.
• Institute real-time pricing.
• Create additional natural gas pipeline capacity.
• Create new transmission capacity.
• Accelerate introduction of clean distributed technologies.

We expect the energy crisis in New York City to continue for several years to come, due to continued high electricity demand and worsening conditions for power plant construction. We urge the City Council to reject Resolution No. 64 and to join the Bloomberg Administration and the State of New York in accelerating the siting of permanent new electric generating facilities, to encourage energy efficiency, and to explore the use of clean distributed energy technologies while we still have time to avert a full-scale crisis. Shutting down the Indian Point Energy Center simply is unworkable in the context of the critical electricity outlook facing the City of New York over the next several years.