Executive Speeches

Testimony of Timothy S. Carey, president and chief executive officer of the New York Power Authority, submitted to the New York City Council Committee on Environmental Protection.

December 5, 2006

To the Committee on Environmental Protection of the New York City Council:

My name is Timothy S. Carey and I am the president and chief executive officer of the New York Power Authority.  I appreciate this opportunity to submit testimony related to the hearing held by this Committee on November 28, 2006, concerning two proposed local laws, Introduction No. 18 and Introduction No. 23.*

The Power Authority strongly supports enactment of each of these measures. We believe they represent thoughtful, constructive and potentially effective responses to the challenges of ensuring a reliable, economical power supply for the City while protecting the environment and reducing the dependence on foreign oil that threatens our nation’s economic health and its security.

New York City’s growing need for clean, reasonably priced energy is strikingly evident.  The latest data from Governor Pataki’s chief economist, Stephen Kagann, shows that from October 2005 to October 2006, the City’s unemployment rate fell from 5.8 percent to 4.1 percent, the lowest figure ever recorded. Some 47,700 private-sector jobs were added in the City during this period.  The unemployment rate has dropped by more than 50 percent since reaching 8.6 percent in February 2003.

This extraordinary progress is a tribute to the policies and the persistence of the governor, Mayor Bloomberg and the members of the City Council.  But it carries with it an obligation to provide the dependable, clean and affordable energy that is essential to fuel continued economic growth.

While the two proposed pieces of legislation apply only to City-owned facilities, they offer the dual benefit of strengthening the overall energy supply and of providing an example to the private sector of actions that can be taken to save energy and improve the environment.

The measures are also very much in keeping with the Power Authority’s ongoing efforts to promote clean energy technologies, energy efficiency and sustainable development in the City.

I discussed these initiatives in some detail in testimony I presented to this Committee and to the Council’s Committee on Consumer Affairs at a hearing on October 31, 2006.  The testimony was also submitted in writing, and I refer you to the text.  For the Committee’s convenience, I am submitting as Attachments A and B to this testimony updated versions of appendices that summarized our distributed generation and energy efficiency activities in the five boroughs.

As noted in my October testimony, the Power Authority’s new long-term power supply agreements with the City government and our other local public customers reflect the ever increasing importance of such endeavors. 

Among other provisions, the agreements, which extend through the end of 2017, enable individual customers to acquire renewable energy attributes or to install distributed generation projects at their facilities.  Also under the agreements, the Power Authority has committed to annually finance $100 million in energy efficiency and clean-technology projects for its governmental customers in the City and Westchester County.  Each of these approaches would be facilitated and strengthened by enactment of Int. No. 18 and Int. No. 23.

Overall, 12 fuel cells and seven rooftop solar photovoltaic projects installed by the Power Authority are now in service at various locations in the City.  These projects have produced a total of nearly 42 million kilowatt hours of electricity, averting the need to burn more than 72,000 barrels of oil and the emission of over 30,000 tons of greenhouse gases.

Several other projects are under way and we are planning to create one of the world’s largest fuel cell complexes, with a total capacity of nearly five megawatts, at the redeveloped World Trade Center site.

 We are also moving forward with plans to purchase more than 70 megawatts of wind energy attributes on behalf of the City and our other government customers, principally the Port Authority of New York and New Jersey.  In addition, we continue to assess the favorable results of our demonstration in October of the use of biodiesel fuel, blended with oil, at our Poletti Power Project in Queens. 

According to the U.S. Department of Energy, renewable energy, other than hydroelectric power, now accounts for little more than 2 percent of the nation’s electricity.  But there is considerable opportunity to build on that number. 

Given the projects already in place, the expressed priorities of the Mayor’s Energy Policy Task Force and enlightened leadership by the City Council, New York City will be well positioned to play an important role in advancing renewable technologies and the other forms of clean, distributed generation cited in Int. No. 18.  More specifically, the City’s success would contribute to meeting the ambitious targets in the statewide Renewable Portfolio Standard proposed by Governor  Pataki in his 2003 State of the State Address and adopted by the Public Service Commission in 2004.

The approach called for by Int. No. 18, i.e., a survey of all City-owned buildings to assess the potential for clean on-site generation projects, appears similar in some respects to that planned by the Power Authority in the equally important area of energy efficiency.  As I testified in October, we intend to begin a study next year of the potential for additional energy efficiency measures at facilities owned by the City and our other governmental customers in the five boroughs.  We have also proposed to carry out energy audits and to implement energy efficiency measures at all City-owned facilities.

The City and Power Authority efforts with respect to clean on-site generation and energy efficiency might well complement each other, even as Int. No. 18 and Int. No. 23, if enacted, would work in tandem to address major energy and environmental needs.

The Power Authority’s own commitment to energy efficiency and clean-energy technologies was reaffirmed on November 28, 2006, when our trustees authorized an increase of $50 million in financing available to fund such projects at government facilities in the City and throughout New York State through our Energy Services Program. The action brought total available financing to $400 million.

To date, the Authority has provided financing of about $565 million for completed energy efficiency and clean-energy projects at some 1,200 facilities owned and operated by New York City or our other governmental customers in the City.  These projects reduce peak demand for electricity by more than 95 megawatts.  On an annual basis, they save the public entities and local taxpayers nearly $58 million, avoid the need to burn more than 1.1 million barrels of oil and reduce greenhouse-gas emissions by close to 480,000 tons.

We are now looking ahead to potential implementation of some $154 million in additional energy efficiency projects at City facilities—an increase of $24 million since I last testified.  These include about $27 million worth of projects that are ready for construction, but await approval from the Department of Citywide Administrative Services.

We anticipate that enactment of Int. No. 23 would give further impetus to our energy efficiency initiatives at City-owned facilities and would also advance the City’s laudable efforts to require or encourage the use of “green building” technologies through the passage of Local Law No. 86 and approaches to the private sector.**

As the Council aptly pointed out in Section 1 of Local Law No. 86 (Statement of findings and purpose), “Probably no urban activity has greater impact on human health and the environment than building construction and use.”  It is therefore imperative that green technologies be applied not only to new construction and major alterations, but also to existing buildings.

It was this thinking that prompted the Power Authority to seek certification for its 25-year-old headquarters building in White Plains under the U.S. Green Building Council’s LEED-EB program (Leadership in Energy and Environmental Design—Existing Buildings).

Although the USGBC’s decision on our application is pending, we have already learned a great deal during this process and look forward to sharing this knowledge with the City and our other customers.  We are planning a formal training program next year to enable some of our engineers to qualify as LEED-Accredited Professionals, who could, in turn, provide assistance as the City pursues LEED certification for its buildings.  In addition, City personnel will be invited to participate directly in our training sessions, which could help in complying with the training requirement set forth in Int. No. 23.

The Power Authority takes great pride in its partnership of more than 30 years with the City of New York.  That partnership, originally centered on the supply of lower-cost electricity, now also includes a healthy emphasis on new, environmentally friendly energy technologies and on the efficient use of energy.  Int. No. 18 and Int. No. 23 would enhance our cooperative efforts in each of these areas, and we urge prompt enactment of both proposed local laws.

Thank you for your consideration of this testimony.

* Int. No. 18 calls for a survey of all City-owned buildings to determine whether clean on-site generation projects such as solar and wind power installations and fuel cells are appropriate for such facilities.  Int. No. 23 would require implementation of a commissioning program for all City-owned buildings to ensure their efficient operation and compliance with their original design. It also envisions an energy efficiency training program for all building managers, building engineers, operations and maintenance personnel, and staff members in related areas who are employed by the City.

**Local Law No. 86, enacted in 2005, will take effect Jan. 1, 2007.  It 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 (Leadership in Energy and Environmental Design) program and substantial energy cost savings, and that other City-financed alterations meet specified goals for savings in energy costs or potable water consumption.