Executive Speeches

Testimony of Timothy S. Carey, president and chief executive officer of the New York Power Authority, before the New York City Council Committees on Environmental Protection and Consumer Affairs, Council Chambers, City Hall, New York, New York.

October 31, 2006

I appreciate this opportunity to appear before your committees.

These are somewhat familiar surroundings for me since I testified in support of Local Law 86, which was enacted last year to promote the development of “green buildings” in New York City.  As you well know, the legislation, which takes effect this coming January 1, will require that most non-residential new construction and major alterations financed by the City achieve certification under the U.S. Green Building Council’s LEED program—for Leadership in Energy and Environmental Design—as well as substantial energy cost savings.

I want to commend the Council for approving this bold and comprehensive legislation, which can serve as a model for cities throughout the nation.

This is a matter of particular interest to me since, as president and CEO of the Battery Park City Authority, I led construction of the nation’s first green residential high-rise building—the Solaire, which earned the coveted LEED Gold certification.  Earlier this year, I was privileged to be named to the USGBC board.   So I’ll be watching with great anticipation as the benefits of Local Law 86 become apparent.

I should also note that the Power Authority is engaged in a major project to earn LEED certification for its headquarters building in White Plains.  We hope to share the experience we gain in this endeavor with our customers, including, of course, the City of New York.

This morning, I’d like to discuss some of the Power Authority’s efforts—in cooperation with the City—to promote energy efficiency, cut peak demand for electricity and demonstrate the benefits of clean, renewable energy sources.  These activities contribute significantly to the vital goals of ensuring a reliable power supply, protecting the environment and reducing dependence on imported oil.

The Power Authority’s partnership with the City dates back more than 30 years, to September of 1976, when we began supplying electricity for government buildings, schools, the street lights and a wide range of other public facilities and purposes.  The City has realized sizable savings ever since—these typically come to $250 million a year and more.

Our relationship was further strengthened last year when we concluded new long-term electricity supply agreements with the City and other government customers such as the New York City Housing Authority, the Metropolitan Transportation Authority and the Port Authority of New York and New Jersey.

These agreements call for the City and the other public customers to obtain their electricity from the Power Authority through the end of 2017.  They break new ground in providing for extensive involvement by the customers in choosing payment and risk-management options, selecting power sources and scrutinizing the Authority’s planning and decision making.  And—significantly—they reflect the importance we now ascribe to energy efficiency and the development of clean new energy technologies.

Our focus 30 years ago was strictly on the supply of lower-cost electricity.  Now it goes well beyond that.

The new agreements, for example, commit the Power Authority to finance $100 million in energy efficiency and clean-technology projects each year for its government customers in the City and Westchester County.  And they provide for individual entities to acquire renewable energy attributes or to install distributed generation projects at their facilities.

The Power Authority is currently purchasing renewable energy attributes—in the form of energy generated from biomass—for the City University of New York, which we serve under our agreement with the City.  This energy is helping to meet CUNY’s obligations under Governor Pataki’s Executive Order 111, which sets ambitious renewable energy and energy efficiency targets for public facilities.

We intend to obtain more than 70 megawatts of attributes associated with upstate wind facilities operated by two private developers—Horizon Wind Energy and PPM Energy—for use by the City and other government customers, beginning in 2008.  The largest share of the wind energy attributes will be earmarked for the Port Authority for use at the new World Trade Center complex, but we anticipate that the City itself will receive some 13 megawatts.

The Power Authority has also demonstrated an ongoing commitment to clean, renewable energy within New York City. 

Just last week, in line with Governor Pataki’s Executive Order 142, requiring expanded purchases of biofuels by state agencies and authorities, we successfully demonstrated the use of biodiesel fuel, blended with oil, at our Poletti Power Project in Astoria.  Preliminary data indicated an emissions reduction of about 10 percent compared with burning only No. 6 fuel oil.  We believe this test was one of the largest biofuel applications ever carried out in the United States and the first at a power plant of this size.

Beginning in 1999, we have installed fuel cells, running on natural gas, at the historic Central Park police station in Manhattan, North Central Bronx Hospital, the New York Aquarium in Brooklyn and the MTA maintenance depot in Corona, Queens.  Each unit is 200 kilowatts.  Another fuel cell of that size is awaiting installation at the Bronx Zoo. 

We’ve installed eight other 200-kilowatt fuel cells, designed to run on anaerobic digester gas, at four City wastewater treatment plants—Hunts Point in the Bronx, Red Hook and 26th Ward in Brooklyn, and Oakwood Beach on Staten Island.  The gas is produced in the treatment process and would otherwise be flared off into the air, with significant environmental impacts.  These fuel cells were installed as a centerpiece of our innovative $23 million program to offset even the minimal emissions from the small, clean power plants we installed in 2001 in a successful effort to avert power shortages in the City.

In another application of anaerobic digester gas, we will use it to fuel a Stirling—or external combustion—engine at the City’s Owls Head wastewater treatment plant in Brooklyn.  This project should be complete by the end of the year.

We also intend to provide nearly five megawatts of fuel cell capacity at the new World Trade Center complex in what will be one of the world’s largest fuel cell installations.  These units, powered by natural gas, will be in addition to our purchases of wind energy attributes for the Port Authority and our financing of energy efficiency measures with Power Authority and state funds.

Meanwhile, we have completed rooftop solar photovoltaic projects at seven New York City locations.  These include a 300-kilowatt project at New York City Transit’s Gun Hill Bus Depot in the Bronx that is one of the largest such facilities in the nation.

Others are at the Bronx High School of Science and Rikers Island in the Bronx; New York City Transit’s Maspeth Warehouse, the New York Hall of Science and the Botanical Garden in Queens; and P.S. 13 on Staten Island.  That last project—along with a solar project nearing completion at P.S. 14 on Staten Island—was part of our emissions offset agreement for the small, clean power plants.

On behalf of the City, we have two additional solar projects planned for completion next year in Brooklyn—at Kingsborough Community College and the Children’s Museum.

The Power Authority believes that it is extremely important to encourage, by every means possible, the installation of clean generation and the efficient use of energy.

We have therefore joined the City government and others in supporting an effort at the State Public Service Commission to end the linkage between the profits of investor-owned utilities and the amount of electricity and gas they sell to their customers.  This would remove a potential disincentive for the utilities to encourage either energy conservation or the development of distributed power sources.  Simply put, the delivery charge should be decoupled from consumption levels.  The PSC is considering this matter and we hope that a new policy will be forthcoming.

The Power Authority’s own energy efficiency programs have brought substantial benefit to the City and the State.  We recently passed the $1 billion mark for overall statewide funding for energy efficiency and clean-energy projects completed or in progress.

Within the City, we’ve completed projects at nearly 1,200 public facilities throughout the five boroughs, at a total cost of close to $565 million.  The projects save City agencies—and taxpayers—nearly $58 million a year.  They lower peak demand for electricity by more than 95 megawatts.  And they annually save more than 1.1 million barrels of oil and reduce greenhouse-gas emissions by close to 480,000 tons.

In addition to installing efficient lighting, motors and other equipment, we have replaced polluting coal-burning furnaces with clean oil- and gas-fueled boilers at 78 public schools, located in every borough, and have installed efficient refrigerators—using one-half to one-third the energy of the previous models—in all of the City Housing Authority’s nearly 185,000 apartments. 

We hope to build on our past accomplishments and to implement still more energy efficiency projects with the City.

At the moment, we have $27 million worth of projects that are ready to go into construction, as soon as we get approval from the Department of Citywide Administrative Services.  They are among $130 million in projects at various stages of development.

Looking ahead, the Power Authority is planning to begin a major study next year of further energy efficiency potential at facilities operated by our government customers throughout New York City.  In line with this, we have offered to conduct energy audits and to follow up with energy efficiency measures at every City-owned facility, beginning with the largest energy users.

Our energy efficiency projects are complemented by our very successful summertime peak-load management program, in which we pay our government and business customers in the City $40 for each kilowatt of load they agree to cut upon request.  This past summer, the program included 92 locations in the five boroughs—ranging from City sanitation garages and water treatment plants to college campuses and banks.  Total hourly peak demand on the summer’s peak day, August 2, was cut by an average of 84 megawatts—nearly twice the original customer commitment.

Limitations of time and of the scope of this hearing have precluded me from discussing numerous Power Authority efforts to protect and improve New York City’s environment that go beyond our energy efficiency and clean energy initiatives.

These include our help in putting some 370 electric and hybrid-electric vehicles of various types on the City’s streets.  Our installation of pollution controls on more than 1,400 school buses in the Bronx, Brooklyn, Queens and Staten Island as part of the emissions-offset program for the small, clean power plants.  And our support for various local environmental projects, ranging from the “green roof” that I recently dedicated with Borough President Carrion at the Bronx County Courthouse to the innovative initiatives we’ve funded through the Queens Clean Air Project.

My goal is nothing less than to make the New York Power Authority the cleanest and greenest electric utility in the United States. And the success and continuing growth of our partnership with the City are essential to achieving that goal.