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FOR IMMEDIATE RELEASE
PR- 205-03
July 21, 2003

MAYOR MICHAEL R. BLOOMBERG HOSTS ROUNDTABLE DISCUSSION ON NEW YORK CITY ENERGY ISSUES

Mayor Michael R. Bloomberg met today with members of the New York Building Congress Energy Committee to detail the City’s policy on major energy issues and discuss the City’s role in meeting current and future energy needs. Issues discussed included energy upgrades, cleaner power, and ways to add capacity and build stronger conservation measures within New York City.  The Mayor also addressed his Administration’s endorsement of reenacting the State’s power plant siting law, Article X, and assisting in the siting of power plants in the City; advocating regulatory initiatives that encourage long-range power purchase contracts and financing of power plant, electric transmission and natural gas pipeline projects; implementing programs that promote energy efficiency and conservation, as well as clean distributed generation and renewable energy; and supporting prudent investment by Con Edison and KeySpan in building New York City’s energy distribution infrastructure.

“New York City’s consumption of energy is significant – and it’s growing,” said Mayor Bloomberg. “Our goal is to ensure that New Yorkers continue to have an adequate supply of clean and reliable power. To do that, we need energy upgrades and additional capacity from more efficient sources. We need to find ways to help power plant developers build new and cleaner power plants in the right places, and we must find ways to reduce our consumption of energy.”

“As we begin the reconstruction of Lower Manhattan and prepare for a strong recovery, we must also be ready to meet the electricity demands of a growing 21st century economy,” said Rudin Management CEO and Co-chairman of the New York Building Congress Energy Committee John J. Gilbert, III. “It’s reassuring that Mayor Bloomberg recognizes the City’s long-term energy supply gap and has committed himself to addressing this critical issue.”

“Mayor Bloomberg has shown great leadership in recognizing that a strong, reliable infrastructure is one of New York City’s greatest assets,” said Chairman and CEO of Con Edison Eugene R. McGrath. “By providing the highest levels of service and reliability to the people of New York, Con Edison supports the City’s standing as the premier location for economic growth and new development.”

It is estimated the City will need to increase existing capacity by about 3,000 megawatts by 2008 to accommodate growing demand, replace older plants and encourage lower consumer prices. There are a limited number of potential sites for new facilities since they require multi-acre parcels zoned for manufacturing and have to be located within close proximity of gas lines and connections to New York City’s electrical grid. It is preferred that power companies “repower” and expand existing facilities, instead of building new plants. That will require redesigning and refitting existing facilities to increase generating capacity. The Bloomberg Administration will continue to work with Con Edison and other owners of existing generation plants in the City to inventory their holdings with the goal of repowering and expanding facilities.

“Repowering existing plants is especially attractive. It eliminates the necessity of locating new sites within the City and results in both higher efficiency and cleaner facilities,” said NYC Economic Development Corporation Executive Vice President Kate Ascher. “In addition, repowering helps to ensure that energy prices remain affordable for all New Yorkers.”

Three examples of repowering projects currently under construction are KeySpan Ravenswood, Con Edison East River Plant Repowering, and New York Power Authority’s Poletti Expansion.  These projects will be operational by 2005 and will provide the City a total of 900 new megawatts of power. In addition, two innovative ideas for bringing additional power to the City are being actively considered.  SCS Energy is proposing building a 1,000-megawatt plant on an existing brownfield site in Astoria, Queens, having secured a siting approval certificate and a contract from Con Edison to deliver 500 megawatts to the utility by early 2006.  PSEG Power is also seeking to build an exclusive transmission line across the Hudson that would deliver another 600 megawatts to the City by 2005. PSEG obtained a state approval certificate and is in the pre-construction phase.  These projects, coupled with those under construction, would add about 2,500 megawatts to the City grid, an increase of almost 25% over present capacity.

The City, however, needs to do more to encourage private investment in additional plants and other infrastructure projects to produce the additional megawatts needed by 2008.  To close that gap, the City will need additional private investment in power generation plants; new transmission lines; additional natural gas pipeline capacity; improved efficiency and energy conservation programs; small, clean distributed generation technologies; and more renewable energy from hydroelectric plants, wind and solar energy.

“Ultimately, it is the private sector that must commit the capital to such projects,” Ascher added. “The City and State must work to eliminate impediments that have discouraged new investment, such as the long lead-time necessary to get required approvals and permits.  If new facilities are to be operational in 2006 and beyond, they must be started immediately.”

“As the energy demand continues to grow in the New York area it is essential for new generation facilities to be constructed,” said KeySpan Chairman & CEO Robert B. Catell. “However, long-term power purchase agreements are necessary in order to get the proper financing to move forward.”

At the same time, the concerns and desires of communities cannot be overlooked in selecting sites of new power plants or transmission lines. “We will work with developers to recognize community sensitivities and mitigate  impacts associated with proposed projects,” said Deputy Mayor for Economic Development and Rebuilding Daniel L. Doctoroff. “And we are going to lobby the State to give the final word concerning  power plant air quality issues to the Department of Environmental Protection, whose track record in protecting the City’s environment is unmatched.”

In conclusion, the Mayor called for the creation of an interagency Energy Policy Task Force, headed by EDC, to coordinate and execute the City’s proposed action plan. The Mayor was joined at the meeting by Deputy Mayor Doctoroff; EDC President Alper, EVP Ascher and Senior VP of Energy Gil Quiniones; KeySpan Chairman Catell; Con Edison Chairman McGrath; Rudin Management’s Gilbert; William A. Harkins, independent industry consultant; New York Building Congress’ Richard T. Anderson; Natural Resources Defense Council’s Ashok Gupta; Building and Construction Trades of Greater NY’s Edward T. Malloy; William Rudin and Jack Rudin of Rudin Management; Real Estate Board of NY’s Marilyn Davenport; and NYC Partnership Kathryn Wylde.





CONTACT:

Edward Skyler/Jennifer Falk   (212) 788-2958

Michael Sherman   (EDC)
(212) 312-3523

Bud Perrone (New York Building Congress)   (212) 843-8000


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