June 4, 2002


Under Current Law, Article X Will Expire on December 31, 2002

Governor George E. Pataki today proposed legislation to re-authorize Article X of the Public Service Law and to refine the review process for the siting of major electric generating facilities.

"This comprehensive legislation preserves the general framework of Article X, but it also includes several enhancements designed to make the process more efficient and more accessible to community groups and other affected parties," Governor Pataki said. "The prompt extension of Article X will provide the continued regulatory certainty that is absolutely critical if we are to attract the capital necessary to meet our state's energy needs."

Article X of the Public Service Law was enacted in 1992 and replaced Public Service Law Article VIII, which expired in 1989. Article X, which created the New York State Board on Electric Generation Siting and the Environment, was designed to implement a permitting process for the siting of major electric generating facilities with more than 80 megawatts (MWs) of capacity. Under current law, Article X will expire on December 31, 2002. L

isted below are some of the major provisions of Governor Pataki's program bill. Many of these were developed in response to concerns raised by environmental and community groups as well as other interested parties.

Build upon 2001 amendments to Article X by creating a more streamlined process applicable to the repowering of existing major electric generating facilities. The intent of this provision is to acknowledge the many benefits of repowering by attaching tangible procedural incentives to the decision to repower.

Provide for the creation of the position of public adviser within the New York State Consumer Protection Board. The public adviser is intended to be a resource for parties, giving them such information and assistance as may be necessary to allow them to participate more fully in the Article X review process.

Provide $50,000 of the available intervenor funding to municipal and other interested parties at the pre-application phase of the Article X review process. This change will enhance the ability of affected parties to participate in the Article X proceeding at a critical early stage ? when the applicant and the Department are working together to identify the issues that will require further study as part of the full Article X application.

Permit 10 percent of available intervenor funding to be used by eligible parties to defray legal expenses related to the development of an administrative record before the Siting Board. This change is intended to assist interested parties in securing counsel to appear in proceedings before the Siting Board. This will enhance the ability of such parties to contribute to the record developed by the Siting Board.

Since 2000, seven major electric generating facilities have been certified by the Siting Board for construction. One project, the proposed Heritage facility in Oswego, has since been cancelled. If the Construction of the remaining six projects go forward they will increase the capacity of the State's electric system by approximately 3,600 MWs.

However, the New York State Independent System Operator ("ISO") - the organization responsible for managing the State's transmission system and electric markets - has identified the need for a total of 7,100 MW megawatts of new capacity by 2005. Thus, under a best case scenario, at least an additional 3,500 MW needs to be added to the system.

New York City and Long Island are in especially critical need of additional capacity, as these areas have limited transmission capability and a significant portion of their generating needs must be satisfied locally. The ISO has indicated that Long Island alone requires 750 to 1,000 MW of new generation as soon as possible to ensure reliability and stabilize prices.

If approved by the Legislature, the Governor's program bill would be effective on January 2, 2003 and would expire on January 1, 2008.

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