Archives of Rudolph W. Giuliani - Keeping the Lights On in New York City By Mayor Rudy Giuliani

ARCHIVES OF THE MAYOR'S WEEKLY COLUMN
Archives of Rudolph W. Giuliani

Keeping the Lights On in New York City
By Mayor Rudy Giuliani

The recent power shortages and rationing of electricity in California have made most Americans vividly aware of the consequences of inadequate energy planning. The presence of electricity is not something that we can afford to take for granted.

The work needed to avert an energy crisis needs to be done well in advance. That is why last week I presented to a group of civic leaders my administration's four-point plan for a reliable, affordable, and sustainable energy supply for New York City's future.

The City should support the construction of new environmentally sound power plants that will ensure reliable supply, lower prices, and reduced air pollution.

To prevent blackouts, the City is required by law to have 80 percent of the forecasted summertime peak usage of electricity capable of being supplied by power plants located inside the five boroughs. But while our demand for electricity has increased, supply has not. In fact, there has not been a major new power plant built in our city since 1967. This year, without new generation, the City will not have enough power to satisfy this requirement. The private marketplace has responded to our need for more energy with proposals to build seven power plants around the city.

The affected neighborhoods have expressed some concern about these plans. But New Yorkers need to understand that there are certain engineering realities that dictate where power plants are located. The plants have to be near substations, high-pressure natural gas lines, and a water supply for cooling. The City will do its best to help mitigate the consequences of these plants on the affected communities, but we can't change these basic realities.

The City should support cost-effective energy conservation, which is why we recently started a free energy conservation audit program for city businesses.

The Economic Development Corporation recently introduced a free energy survey for
businesses that pay less than $100,000 per year in electricity costs, with the aim of informing these businesses of cost-effective ways to reduce their energy consumption. We also need to educate the public about what it can do to conserve electricity during the peak summertime periods. One way to do this effectively is to introduce new electric meters that show customers the real cost of electricity on a hot summer day. But while real-time pricing and other cost-effective measures are important, we need to recognize that conservation alone cannot eliminate the need for new power plants located here in the city.

The City should support more effective transitional price controls for the wholesale market, so that customers are not exposed to the price spikes of last summer.

To complement our efforts to ensure the ready availability of electricity, I believe it is necessary to have better wholesale price controls during the ongoing transition between regulation and a free market. The 43 percent price increase that New Yorkers had to pay last summer was unacceptable.

I have directed the City Law Department to ask the Federal Energy Regulatory Commission to impose more effective wholesale price controls in New York City until more plants are built. I urge the State Public Service Commission to join us in this request.

The City should continue its support of deregulation because, in the long run, the free market will do the best job of ensuring that New Yorkers get dependable, affordable, and cleaner electricity.

History has shown us that free markets do a much better job than government regulators at ensuring that customers pay the lowest prices. Open competition encourages accountability and innovation. My administration will continue to support deregulation, while we take proactive steps to ensure a smoother transition for the consumer.

The bottom line is that New York City's energy policy should be driven solely by a concern for doing what is responsible - both now and in the long term. I believe that this four-point plan will help the City achieve the dependable, affordable and sustainable energy supply that we need and deserve.