Executive Speeches

Excerpts from remarks of Timothy S. Carey, president and chief executive officer of the New York Power Authority, at the fifth annual Quebec Energy Forum, Montreal, Quebec.

November 7, 2006

Good morning.  I’m very happy to be here, particularly in light of the New York Power Authority’s longstanding ties with the Province of Quebec.

Those ties are most vividly represented by the 155-mile, 765-kilovolt transmission line that we completed in 1978 from the Quebec border to Central New York.  Nearly three decades later, the line is a major pathway for hydroelectric power flowing from Quebec to New York—and points south—and for energy headed north to the province.

This transmission line was inspired in large part by NewYork State’s urgent need in the 1970s to reduce its dependence on OPEC oil for electricity production.  The purchases from Quebec have helped to ease that problem.  But our state and nation still rely far too heavily on imported oil—and, for that matter, on natural gas—to meet overall energy requirements.

Today I’d like to discuss with you various initiatives aimed at addressing this and other pressing problems in our industry.  The current challenges are, if anything, even greater than those we faced when the 765-kv line was built.  And they demand innovative responses that go beyond building large new transmission lines and power plants—necessary and appropriate as those actions may sometimes be.

With that in mind, I’d like to begin by focusing on the growing importance of “green buildings”—an area in which innovation is required, and displayed, on virtually a daily basis.

As we use them today, the words “building” and “the environment” can seem very much at odds.  But the true state of affairs is that the two terms are cozying up to one another.

That lesson was taught us by Buckminster Fuller, whose famous Dymaxion house was, conceptually, the world’s first green building in that it made “maximum” use of resources as it minimally depleted them.

These days in the United States, the most widely recognized environmental design and performance guidelines for green buildings are those established by the U.S. Green Building Council—an organization that recently named me to its Board of Directors.

The guidelines come in various shades of green as arrived at by the Council's LEED (Leadership in Energy and Environmental Design) rating system. What they all have in common is an astonishingly low impact on the environment.

Typically, they save close to 30 percent of the energy and 50 percent of the water that buildings of comparable size consume. Turning your building green might entail feathering the interior walls with insulation, applying special glazing to windows and installing high-efficiency lighting, heating, cooling and ventilation systems.  It might also involve new plumbing fixtures emphasizing water conservation. Then, to ensure clean ambient air and water quality, contractors typically agree to avoid using toxic paints, sealants, cleansers and floor coverings and use special filters and monitoring equipment to reach clean-room levels of air and water purity.

Those occupying these buildings enjoy improved productivity and health and lower utility bills, not to mention a clear conscience, as even the building materials themselves are recycled.

As the president and chief executive officer of a New York State agency known as the Battery Park City Authority, I led a team that created America’s first green residential high-rise building: The Solaire, located in Battery Park City, near the southern tip of Manhattan Island.

This building—completed a little over three years ago—achieves levels of energy efficiency 35 percent greater than prescribed by the state's energy code.

It consumes 65 percent less energy during peak summer periods than buildings of comparable size.

It relies on solar energy for 5 percent of its base electrical load.

It even includes its own wastewater treatment facility—the first in the nation inside a multi-family residential building—alongside another innovative system that re-uses storm water.

The impetus behind The Solaire was New York Governor George Pataki, who has been advancing a pragmatic environmentalism since assuming the governorship almost 12 years ago.  The governor has spearheaded legislation to provide significant tax relief—totaling $50 million in credits—to developers of green buildings.  Through his Executive Order 111, he also mandated a 35 percent cut in energy use at state buildings by 2010. In effect, he ordered state buildings to turn green.

Governor Pataki turned the latter initiative over to the New York Power Authority, the nation’s largest state-owned electric utility.  It was a good choice because, over the last 15 years or so, the Power Authority has invested $1 billion—with a “b” —in energy-efficient refrigerators, lighting, heating and ventilation, and energy control systems in public buildings throughout the state—and in clean energy technologies. We are on target to spend $100 million on energy efficiency this year.

Today, state office buildings, state university campuses, housing projects, schools, libraries—even police precincts and fire houses—are extremely energy-efficient, despite the fact that the majority of these structures were built in an era when energy was cheap and plentiful.

These green enhancements lower peak demand for electricity by more than 200 megawatts.

They save taxpayers almost $100 million each year through reduced energy and maintenance costs. They also help avoid the use of more than 1.8 million barrels of oil every year and they cut yearly greenhouse-gas emissions by nearly 760,000 tons.

At the Power Authority's headquarters in White Plains, north of New York City, we took some of our own medicine.

We made nearly $3.5 million in energy-efficiency investments in the building—which houses some 600 of our employees and a number of private tenants.  This cut annual energy use not by 35 percent, but by more than 50 percent.  That's a saving of more than 5 million kilowatt hours a year.  Since the Power Authority is self-supporting, the benefit to taxpayers is indirect, though these savings will allow us to take on more projects, helping even more public agencies and services improve their energy efficiency.

Right now, we’re in the process of making additional investments in our building, improving water efficiency, air purity and the other attributes of building performance and using environmentally friendly cleaning products. Our goal is to achieve a LEED-EB—for Existing Buildings—rating on the building.

As I’ve tried to show, there is enormous potential for quality, economically sound investment in green buildings.  I urge each of you involved in the construction of new buildings—or the refurbishment of existing ones—to take a good, long look at the benefits of going green.

Meanwhile, I know that you want me to take a look beyond the efficiency measures I’ve discussed already.

Peering into the future, it’s clear that we must identify and develop the technologies that will best enable us to cut our dependence on oil from hostile or potentially hostile foreign sources, to combat global warming and other threats to our environment, and to assure the reliable, affordable energy needed to fuel economic growth.

The relevance of that last point was underscored in a report last month by the North American Electric Reliability Council that showed demand for electricity in our two countries significantly outstripping projected increases in generating capacity.  The report also cited the growing importance of renewable resources in meeting future needs.

In the United States, Governor Pataki has staked out a strong position through his national leadership in promoting renewable energy, clean transportation and energy efficiency—and in moving aggressively to improve air quality.  The benefits of approaches such as Executive Order 111, an ambitious Renewable Portfolio Standard and a Regional Greenhouse Gas Initiative that encompasses seven states will be felt long after he leaves office at the end of the year.

With the New York Power Authority marking its 75th anniversary this year, I think it’s safe to say that George Pataki has made better use of the Authority and has capitalized more on our unique strengths and capabilities than has any other governor.

As a result, I am confident that the Power Authority is well prepared to remain a vital asset in shaping a New York energy future marked by greater fuel diversity and security and by a cleaner environment.

Already, our large hydroelectric projects on the St. Lawrence and Niagara rivers—where we share water resources with Ontario Power Generation—provide a solid head start toward meeting the Renewable Portfolio Standard goal that at least 25 percent of the state’s electricity come from renewable sources by 2013.

Thanks largely to these two massive projects, we’re now at about 19 percent.

St. Lawrence and Niagara were the Power Authority’s first two projects—and they’re still at the heart of our operations.

More than 80 percent of the electricity that we produce comes from these two sources, so it’s not surprising that we’ve been aggressive in our efforts to obtain new 50-year federal licenses for them. We have the new license for the St. Lawrence-Franklin D. Roosevelt Project, and we’re hoping to get the new Niagara license by August 2007.  We have also invested hundreds of millions of dollars to extend the lives of these facilities and to modernize them.

Unfortunately, all of New York State’s prime hydroelectric sites have long since been developed.

The imperatives of fuel diversity and environmental protection demand that we focus on a new generation of clean energy sources.

Here, too, the Power Authority is helping to lead the way on a number of fronts, ranging from solar power projects and fuel cells to the use of clean coal and hydrogen.

To date, we’ve installed some 25 solar photovoltaic projects and 14 fuel cells at various locations in New York State.

For the future, we plan to test thin-film solar panels that are lighter than those now in use and can be built directly into roofs, glass and other building materials.

And—more dramatically—we intend to provide nearly five megawatts of fuel cell capacity at the new World Trade Center complex in Lower Manhattan, in what will be one of the world’s largest fuel cell installations. The Power Authority will also help to assure that most of the complex’s remaining power needs are met through renewable energy purchases and will finance energy-efficiency measures.

Other exciting new endeavors include:

• Playing a key role in Governor Pataki’s program to encourage private-sector development of one or more clean-coal power plants in New York State.

• Planning a “Hydropower to Hydrogen” program in which hydroelectric power would be used, in an emission-free process, to produce hydrogen as a fuel for transportation.

• Considering several biomass facilities—including one that would use wood residue from Northern New York forests.

• And helping to demonstrate a concept plug-in hybrid-electric vehicle—DaimlerChrysler’s Sprinter van—with the goal of eventually bringing such vehicles to the commercial market.  Plug-in hybrids, which draw some of their electricity directly from the power grid and can operate in an all-electric or hybrid mode, are expected to be more efficient and cleaner than standard hybrid vehicles.

The move to find new solutions to our energy problems is strikingly evident in the Clean-Coal Power Plant Initiative—a key element in the governor’s overall strategy to reduce New York’s reliance on oil.

The resulting project or projects would use our most abundant domestic fuel in a process that would significantly reduce emissions and would include the ability to capture—and sequester—carbon dioxide.

The Power Authority is part of a team of state agencies and authorities that has identified various potential shovel-ready sites in New York State for clean-coal plants.  In September, we coordinated the release of a request for proposals for up to 600 megawatts of capacity to be installed at these locations or elsewhere in the state.  We expect to announce the results next month.

The Authority will also provide $50 million over five years to support the deployment  of sequestration technologies. And we’ll agree to purchase some of the power from the project or projects that are chosen in the competitive process.

We hope that our involvement—along with tax incentives to be offered by the state—will contribute to the success of this vital program.

I could probably continue far beyond my allotted time because I’ve barely touched on our electric and hybrid-electric vehicle programs and other projects near and dear to R and D departments everywhere.

But I think I’ve given you a good overview of what we’re doing now with green buildings, fuel cells, PV arrays. In addition, I hope I’ve managed to spark some interest in the future: the clean-coal initiative; use of hydropower to make hydrogen; biomass possibilities; and more.

These are things that are very important to me. And I think it’s fitting for the Power Authority to be out front not only in advancing new energy technologies, but also in conserving energy and other valuable natural resources and in protecting the environment.

It is my goal—encouraged by Governor Pataki and supported by our Board of Trustees—to make the Power Authority the cleanest and greenest electric utility anywhere.

I think we are well on our way to reaching that goal and I look forward to being part of this vital effort. I invite you to join this campaign and even compete with us to be cleanest and greenest.