Legislative Memos

Memorandum in Support S.7789 (Maziarz)

Memorandum in Support

June 21, 2012

S.7789 (Maziarz) - AN ACT directing the power authority of the state of New York to release requests for proposals on certain natural gas powered generating facilities in and around New York city

The Independent Power Producers of New York, Inc. (IPPNY) is a trade association representing companies involved in the development of electric generating facilities, the generation, sale, and marketing of electric power, and the development of natural gas facilities in the State of New York. IPPNY Member companies produce approximately 75 percent of New York’s electric power.

IPPNY supports S.7789 (Maziarz).  This bill would direct the New York Power Authority (NYPA) to issue a Request for Proposals (RFP) for the sale of its ten gas turbine electric generating facilities smaller than 80 megawatts in size and located in and around New York City.  NYPA would report the range of solicited bids to the Governor, the Temporary President of the Senate, and the Speaker of the Assembly, subject to confidentiality requirements.   NYPA then would commence actions, as its Board of Trustees determines appropriate and necessary, to effectuate the sale of these facilities.

The sale of NYPA’s turbines makes sense for the energy marketplace, as private companies continue to operate generating facilities reliably, efficiently and economically more than ever.  These facilities are extremely low-emitting from an environmental standpoint, and their ownership by private entities further will ensure increased efficiencies and economic operations.  Also, a policy decision to sell the turbines is consistent with New York’s adopted NYS Energy Plan. 

Previously, NYPA has sold some of its generation assets to the private sector.  In 2000, NYPA sold its nuclear facilities to a private sector owner for $967 million.  Potential revenue to New York State from the sale of NYPA’s turbines could range from $400-750 million, with more property taxes generated in New York City, based upon a determination by experts of what proceeds could be produced by a truly competitively structured RFP.

For the reasons stated above, IPPNY supports S.7789 (Maziarz).