September 23, 2016
New York

Long Islanders riled by state’s clean energy tax

LIers riled by state’s clean energy tax | By Claude Solnik | Long Island Business News | September 23, 2016 | libn.com

The Long Island Power Authority’s approval of a plan to spend millions related to the purchase of special zero emissions credits from the state has riled some Long Islanders who argue this will drive up already high electric bills.

The New York State Public Service Commission on Aug. 1 issued an order creating both a Clean Energy Standard and a Zero Emission Credit requirement.

The state in this program requires utilities under the PSC’s jurisdiction to buy credits from the New York State Energy Research and Development Authority in proportion to their energy sales plus an administrative charge.

Organizations also receive funds related to nuclear power plants, which would pump some money back into Long Island ratepayers’ pockets related to LIPA’s s stake in an upstate nuclear plant.

The amount utilities pay is based on the portion of the state electricity it generates, which amounts to 13 percent of the total bill to be paid by Long Island, equal to the amount of power used here as a portion of that state-wide.

LIPA in Board documents indicates it is not subject to the Public Service Commission, but that the state expects it to participate in this new program involving the purchase of what’s known as Zero Emission Credits.

The LIPA Board is dominated by appointments of Gov. Andrew Cuomo, whose administration put the new Zero Emission Credit requirement in place.

The Association for a Better Long Island said the decision to spend millions on these credits will lift Long Island’s energy costs from “inexcusable to unbearable,” not creating a second Shoreham, but once again burdening Long Islanders with costs without services.

Long Island already has among the nation’s highest electric rates, in part due to billions of dollars in debt, at least in part related to the shutdown of the Shoreham nuclear power plant.

LIPA expects to pay $65 million for these credits in 2018 after spending $49 million for the nine months of 2017 when this program goes in effect.

The authority expects to receive about $15 million in 2017 and $20 million 2018 as well from the sale of those credits related to its 18 percent ownership of the Nine Mile Nuclear Power Plant upstate.

That would leave a cost of $34 million in 2017 and $45 million in 2018, after deducting what LIPA receives from what it pays, raising Long Islanders’ energy costs in order to comply with the state’s plans.

The amount LIPA must pay is based on the portion of the state electricity it generates, 13 percent of the state electric load.

“If LIPA was tasked with bleeding to death the economic lifeblood of Long Island, they could not have come up with a better scheme,” ABLI President Laureen Harris said. “Not a single dime has ever been offered to offset the multi-billion-dollar costs of closing Shoreham, but the state has decided that Long Island is wealthy enough and indifferent enough to pony up its disposable income to pay for two upstate nuclear power plants.”

LIPA in documents submitted to its board said as of 2018 this would lead to hiking rates about $1.95 a month, related to nuclear power plants as part of the state’s “clean energy standard” enacted by Gov. Andrew Cuomo.

“You have voted to increase the burden of energy costs on Long Island while continuing to ignore the five obsolete, over-assessed, virtually unused power plants on the Island,” Harris added.

She noted that more than one third of each LIPA bill delivered to rate payers is “just for debt service on these facilities and the dismantled Shoreham atomic energy plant.”

Harris pointed to old power plants on Long Island, such as those in Port Jefferson, Glenwood Landing, Far Rockaway and Island Park as inefficient and also leading to higher costs.

“You are violating your fiduciary responsibility to the people of Long Island by allowing their pockets to be picked twice, once by this unconscionable subsidy and again by refusing to act on the obsolete plants on the island that serve no purpose other than to prop up local school districts,” Harris said.

She said increasing electric rates results in “an unsustainable economic environment, where our ability to compete for jobs, investment and sustainable growth is harmed beyond repair. This needs to stop.”

LIPA said numbers could go up or down in the future depending on what happens with energy markets going forward.

“Costs could increase with the projected social cost of carbon as determined by the federal government or decrease with forecast wholesale market prices,” LIPA CEO Thomas Falcone wrote in a document submitted to the LIPA Board.


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