A Critical Evaluation of the Energy Plans and Actions Announced in April 2007

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Executive Summary - June 12, 2007

Recent energy policy announcements by the Governor of New York, the President of NYSERDA,1 and the Chairwoman of the NY State Public Service Commission must leave many people in New York – especially in Upstate and Western New York -- wondering what their elected and appointed leaders in Albany have against them.

New York’s Independent System Operator (NYISO), which manages the wholesale electric grid in NY and works to assure that electric service will be reliable, has concluded that New York will require additional generating capacity as electricity demand grows.

The Governor’s focus on the challenge of providing adequate electricity for New York may be a good sign, but the steps that he and other State officials announced in April are unlikely to achieve the goals he announced. Some of those steps would not be in the best interest of the people of New York -- particularly its electric customers and taxpayers, or homeowners in many rural areas and others who enjoy the state’s scenic areas. The claims of economic benefits and additional jobs, apparently assembled for the Governor by state officials, are not credible.

The costly proposals by the Governor, NYSERDA and NYSPSC to force greater use of “wind energy” are particularly puzzling. The state officials appear to be unaware of facts about wind energy that have been uncovered during the past two years – facts that contradict claims made by the wind industry and other wind advocates. For example, the officials seem unaware or unconcerned that:

• Huge wind turbines (35+ stories tall) produce very little electricity -- which electricity is low in quality and value because it is intermittent, volatile, unreliable and unlikely to be available when most needed.

• Wind turbines cannot be counted on to produce electricity at times of peak electricity demand (late summer afternoons on hot weekdays in July and August), and will not replace the need for the electric industry to add reliable electric generating capacity to supply increasing electric demand or replace aging generating plants.

• Huge tax breaks and subsidies for “wind farm” owners – not environmental and energy benefits – are the primary reasons that companies are eager to build wind farms.

• Wind energy advocates have greatly overstated environmental and economic benefits of wind energy and greatly understated adverse environmental, ecological, scenic, property value and human impacts.

In fact, policies and programs announced by the state officials would result in:

• Transferring nearly $ 1.3 billion additional dollars from the pockets of ordinary electric customers and taxpayers to pockets of large “wind farm” owning companies, particularly 2 Noble Environmental Power (majority owned by JP Morgan Partners, LLC), Massachusetts -based UPC Wind, and Community Energy, Inc. (wholly owned by Iberdola of Spain).

• Spending billions of capital investment dollars on energy projects that produce little electricity when needed and have little favorable local economic impact.

• Undermining the property values, peace and tranquility of thousands of families in rural New York who would be forced to live in the shadows of hundreds of huge, noisy wind turbines, and destroy some of New York’s beautiful scenery.

New York already has some of the nation’s highest tax burdens and, except for Hawaii, the highest residential electricity prices. The steps announced by the Governor, NYSERDA and NYSPSC are likely to make the situation worse.

This brief paper reviews and evaluates key aspects of energy policies and plans announced by New York State officials, and contrasts their electricity plans with those of the New York Independent System Operator (NYISO) which is responsible for the reliability of New York’s electricity grid. Both sets of plans have major implications for the people of New York.