S T A T E O F N E W Y O R K ________________________________________________________________________ 5905 2013-2014 Regular Sessions I N A S S E M B L Y March 8, 2013 ___________ Introduced by M. of A. GABRYSZAK -- read once and referred to the Committee on Ways and Means AN ACT to amend the state finance law and the environmental conservation law, in relation to the power generation modernization act and direct- ing the power authority of the state of New York to release requests for proposals on certain natural gas powered generating facilities in and around New York city THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. This act shall be known and may be cited as the "Power 2 Generation Modernization Act". 3 S 2. The state finance law is amended by adding a new section 85 to 4 read as follows: 5 S 85. POWER PLANT MODERNIZATION AND COMMUNITY ASSISTANCE FUND. 1. 6 THERE IS HEREBY ESTABLISHED IN THE JOINT CUSTODY OF THE COMPTROLLER AND 7 THE DEPARTMENT OF TAXATION AND FINANCE A POWER PLANT MODERNIZATION AND 8 COMMUNITY ASSISTANCE FUND, DIVIDED INTO A GENERAL FUND AND INDIVIDUAL 9 REPOWERING SAVINGS ACCOUNTS UNIQUE AND SPECIFIC TO INDIVIDUAL MAJOR 10 ELECTRIC GENERATING FACILITIES WHICH MEET SPECIFIC CRITERIA SET FORTH IN 11 THIS SECTION RELATING TO MODERNIZATION OF SUCH FACILITIES TO MEET 12 SPECIFIC ENVIRONMENTAL STANDARDS. 13 2. (A) THE POWER PLANT MODERNIZATION AND COMMUNITY ASSISTANCE FUND 14 SHALL CONSIST OF REVENUES FROM THE POTENTIAL SALE OF SPECIFIED ASSETS OF 15 THE NEW YORK POWER AUTHORITY PURSUANT TO SECTION FOUR OF THE CHAPTER OF 16 THE LAWS OF TWO THOUSAND THIRTEEN WHICH ADDED THIS SECTION, ANY REVENUES 17 DERIVED FROM REGULATIONS ADOPTED BY THE DEPARTMENT OF ENVIRONMENTAL 18 CONSERVATION PURSUANT TO SUBDIVISION SIX OF SECTION 19-0301 OF THE ENVI- 19 RONMENTAL CONSERVATION LAW, PROCEEDS COLLECTED BUT NOT ALLOCATED BY THE 20 NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY FROM THE 21 AUCTION, PURSUANT TO REGULATIONS OF SUCH AUTHORITY, OF EMISSION ALLOW- 22 ANCES ALLOCATED BY THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION TO SUCH EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04684-04-3 A. 5905 2 1 AUTHORITY PURSUANT TO REGULATIONS ADOPTED BY SUCH DEPARTMENT, ANY REVEN- 2 UES DERIVED FROM POTENTIAL DEVELOPMENT OF THE MARCELLUS OR UTICA SHALE 3 AREAS OVER AND ABOVE THAT WHICH IS NEEDED TO ENSURE APPROPRIATE STAFF AT 4 THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, DEPARTMENT OF HEALTH, 5 DEPARTMENT OF PUBLIC SERVICE AND OTHER RELEVANT STATE AGENCIES, AND ANY 6 OTHER ENERGY RELATED REVENUE THAT THE STATE MAY ACQUIRE IN CONNECTION 7 WITH THE DEVELOPMENT OF SUCH AREA THAT IS NOT ALREADY COMMITTED TO A 8 DEDICATED PROJECT OR SOURCE. MONEYS IN THE FUND SHALL BE KEPT SEPARATELY 9 FROM AND SHALL NOT BE COMMINGLED WITH ANY OTHER MONEYS IN THE CUSTODY OF 10 THE STATE COMPTROLLER. UNDER NO CIRCUMSTANCE SHALL FUNDS IN THIS ACCOUNT 11 BE SWEPT, REPURPOSED OR OTHERWISE EXPENDED EXCEPT FOR THE EXPRESS 12 PURPOSES OUTLINED HEREIN. 13 (B) MONEYS IN THIS FUND SHALL BE USED AS SET FORTH IN THIS SECTION TO 14 ASSIST MAJOR ELECTRIC GENERATING FACILITIES OPERATING WITHIN THE STATE 15 OF NEW YORK WITH INVESTMENTS IN QUALIFIED ENERGY INFRASTRUCTURE, QUALI- 16 FIED NEW CONSTRUCTION OR REPOWERING PROJECTS; AND TO MITIGATE NEGATIVE 17 PROPERTY TAX OR PAYMENT IN LIEU OF TAXES IMPACTS ON COMMUNITIES WHO HAVE 18 LOST A MAJOR ELECTRIC GENERATING FACILITY. 19 3. (A) A MAJOR ELECTRIC GENERATING FACILITY WHICH UNDERTAKES A REPOW- 20 ERING PROJECT, QUALIFIED ENERGY INFRASTRUCTURE INVESTMENT OR A QUALIFIED 21 NEW CONSTRUCTION PROJECT AS DEFINED IN THIS SUBDIVISION MAY APPLY FOR 22 ASSISTANCE FROM THE FUND PURSUANT TO SUBDIVISION FOUR OF THIS SECTION. 23 (B) FOR THE PURPOSES OF THIS SECTION THE FOLLOWING TERMS SHALL HAVE 24 THE FOLLOWING MEANINGS: 25 (I) "REPOWERING PROJECT" SHALL MEAN IMPROVEMENTS TO AN EXISTING MAJOR 26 ELECTRIC GENERATING FACILITY THAT WILL ALLOW THE FACILITY, OR A NEW UNIT 27 OR UNITS AT THE FACILITY, OR THE COMBINATION OF THE NEW UNIT OR UNITS 28 AND THE FACILITY TO MEET THE RELEVANT ENVIRONMENTAL REQUIREMENTS 29 CONTAINED IN SUBPARAGRAPHS (I), (II), (III), AND (IV) OF PARAGRAPH (B) 30 OF SUBDIVISION FOUR OF SECTION ONE HUNDRED SIXTY-FIVE OF THE PUBLIC 31 SERVICE LAW. 32 (II) "QUALIFIED ENERGY INFRASTRUCTURE INVESTMENT" SHALL MEAN ANY 33 INVESTMENT NEEDED TO DELIVER A NEW FUEL SOURCE TO AN EXISTING MAJOR 34 ELECTRIC GENERATING FACILITY, REPLACE OR RETROFIT A BURNER OR TURBINE, 35 UTILIZE ON-SITE RENEWABLE ENERGY GENERATION OR ANY OTHER SUBSTANTIAL 36 INVESTMENT THAT WILL HAVE A DIRECT IMPACT ON THE FACILITY'S ABILITY TO 37 MEET THE ENVIRONMENTAL REQUIREMENTS CONTAINED IN SUBPARAGRAPHS (I), 38 (II), (III), AND (IV) OF PARAGRAPH (B) OF SUBDIVISION FOUR OF SECTION 39 ONE HUNDRED SIXTY-FIVE OF THE PUBLIC SERVICE LAW. 40 (III) "QUALIFIED NEW CONSTRUCTION PROJECT" SHALL MEAN CONSTRUCTING A 41 NEW MAJOR ELECTRIC GENERATING FACILITY ON THE SAME PROPERTY AS AN EXIST- 42 ING FACILITY OR ON PROPERTY DIRECTLY ADJACENT OR CONTIGUOUS TO SAID 43 PROPERTY, WHERE THE NEW FACILITY BY ITSELF OR IN COMBINATION WITH THE 44 EXISTING FACILITY WILL ALLOW THE SITE AS A WHOLE TO MEET THE ENVIRON- 45 MENTAL REQUIREMENTS CONTAINED IN SUBPARAGRAPHS (I), (II), (III), AND 46 (IV) OF PARAGRAPH (B) OF SUBDIVISION FOUR OF SECTION ONE HUNDRED SIXTY- 47 FIVE OF THE PUBLIC SERVICE LAW. 48 (IV) "MAJOR ELECTRIC GENERATING FACILITY" SHALL MEAN AN ELECTRIC 49 GENERATING FACILITY WITH A NAMEPLATE GENERATING CAPACITY OF TWENTY-FIVE 50 THOUSAND KILOWATTS OR MORE, INCLUDING INTERCONNECTION ELECTRIC TRANS- 51 MISSION LINES AND FUEL GAS TRANSMISSION LINES THAT ARE NOT SUBJECT TO 52 REVIEW UNDER ARTICLE SEVEN OF THE PUBLIC SERVICE LAW. 53 4. THE EMPIRE STATE DEVELOPMENT CORPORATION SHALL CONDUCT COMPETITIVE 54 SOLICITATIONS FOR PROPOSALS SUBMITTED BY MAJOR ELECTRIC GENERATING 55 FACILITIES UNDERTAKING ANY REPOWERING PROJECT, QUALIFIED ENERGY INFRAS- 56 TRUCTURE INVESTMENT PROJECT OR QUALIFIED NEW CONSTRUCTION PROJECT AS A. 5905 3 1 SUCH TERMS ARE DEFINED IN THIS SECTION, FOR ASSISTANCE FROM THE FUND 2 ESTABLISHED PURSUANT TO THE PROVISIONS OF THIS SECTION. SUCH COMPETITIVE 3 SOLICITATIONS SHALL BE DESIGNED IN A MANNER AND FORM TO BE DETERMINED BY 4 THE EMPIRE STATE DEVELOPMENT CORPORATION IN CONSULTATION WITH THE 5 DEPARTMENT OF TAXATION AND FINANCE AND THE COMPTROLLER. A SCHEDULE FOR 6 SUCH COMPETITIVE SOLICITATIONS, AWARD SELECTION, AND DISTRIBUTION OF 7 FUNDS SHALL BE ESTABLISHED BY THE EMPIRE STATE DEVELOPMENT CORPORATION 8 IN CONSULTATION WITH THE DEPARTMENT OF TAXATION AND FINANCE AND THE 9 COMPTROLLER. THE EMPIRE STATE DEVELOPMENT CORPORATION SHALL RANK THE 10 PROPOSALS IT RECEIVED IN RESPONSE TO COMPETITIVE SOLICITATIONS AND 11 CHOOSE THE HIGHEST RANKED PROPOSALS MEASURED ON THE FOLLOWING CRITERIA 12 TO BE CONSIDERED IN THE AGGREGATE: 13 (A) THE AMOUNT OF ASSISTANCE REQUESTED IN PROPORTION TO THE TOTAL 14 QUANTITY OF MEGAWATTS OF NEW GENERATION CAPACITY THAT WILL BE 15 CONSTRUCTED; 16 (B) THE EXTENT TO WHICH AN AWARD WILL RESULT IN NEW CAPITAL INVESTMENT 17 IN THE STATE BY THE APPLICANT; 18 (C) THE TYPE AND COST OF FACILITIES AND EQUIPMENT TO BE CONSTRUCTED, 19 ENLARGED OR INSTALLED IF THE APPLICANT WERE TO RECEIVE AN AWARD; 20 (D) THE APPLICANT'S PAYROLL, SALARIES, BENEFITS AND NUMBER OF JOBS AT 21 THE FACILITY FOR WHICH AN AWARD IS REQUESTED; 22 (E) THE NUMBER OF JOBS THAT WILL BE CREATED OR RETAINED, AS APPLICA- 23 BLE, WITHIN THE STATE IN RELATION TO THE REQUESTED AWARD AND THE EXTENT 24 TO WHICH THE APPLICANT WILL AGREE TO COMMIT TO CREATING OR RETAINING, AS 25 APPLICABLE, SUCH JOBS AS A CONDITION TO RECEIVING AN AWARD; 26 (F) WHETHER THE APPLICANT IS AT RISK OF CLOSING OR CURTAILING FACILI- 27 TIES OR OPERATIONS IN THE STATE, RELOCATING FACILITIES OR OPERATIONS OUT 28 OF THE STATE, OR LOSING A SIGNIFICANT NUMBER OF JOBS IN THE STATE, IN 29 THE ABSENCE OF AN AWARD; 30 (G) THE SIGNIFICANCE OF THE APPLICANT'S FACILITY TO THE ECONOMY OF THE 31 AREA IN WHICH SUCH FACILITY IS LOCATED; AND 32 (H) THE EXTENT TO WHICH AN AWARD WILL RESULT IN AN ADVANTAGE FOR AN 33 APPLICANT IN RELATION TO THE APPLICANT'S COMPETITORS WITHIN THE STATE. 34 ALL PAYMENTS OF MONEYS FROM THE FUND SHALL BE MADE ON THE AUDIT AND 35 THE WARRANT OF THE COMPTROLLER TO BE DISBURSED BY THE DEPARTMENT OF 36 TAXATION AND FINANCE IN CONJUNCTION AND CONSULTATION WITH THE COMP- 37 TROLLER. RECOMMENDATIONS FOR AN AWARD UNDER THIS SECTION SHALL BE MADE 38 BY THE EMPIRE STATE DEVELOPMENT CORPORATION IN ORDER TO MAXIMIZE THE 39 ECONOMIC DEVELOPMENT IMPACTS OF EACH POSSIBLE PROJECT. 40 5. (A) PROPOSALS FOR ASSISTANCE FROM THE FUND MAY BE MADE BY A COUNTY, 41 CITY, TOWN, VILLAGE OR SCHOOL DISTRICT THAT HAS BEEN SUBSTANTIALLY 42 ADVERSELY IMPACTED BY THE LOSS OF PROPERTY TAX REVENUES OR THE LOSS OF 43 REVENUES FROM PAYMENTS IN LIEU OF TAXES DUE TO THE CLOSING OF A MAJOR 44 ELECTRIC GENERATING FACILITY. PROPOSALS SHALL BE FILED IN A MANNER AND 45 FORM TO BE DETERMINED BY THE EMPIRE STATE DEVELOPMENT CORPORATION IN 46 CONSULTATION WITH THE DEPARTMENT OF TAXATION AND FINANCE AND THE COMP- 47 TROLLER. FOR THE PURPOSES OF THIS SUBDIVISION, SUBSTANTIAL ADVERSE 48 IMPACT SHALL MEAN A SITUATION WHERE THE CLOSURE OF A MAJOR ELECTRIC 49 GENERATING FACILITY REPRESENTS A REDUCTION IN TAX COLLECTIONS TO A 50 MUNICIPAL CORPORATION OF AT LEAST TEN PERCENT OF TOTAL RECEIPTS AND IS 51 EXPECTED TO HAVE AN ADVERSE AND UNEXPECTED NEGATIVE IMPACT ON TAXPAYERS. 52 (B) APPLICANTS MAY ONLY SEEK ASSISTANCE FOR A MAXIMUM OF FIVE YEARS 53 AND MAY ONLY SEEK ASSISTANCE UNDER THE FOLLOWING LIMITS, WHICH SHALL BE 54 CALCULATED BASED ON THE TOTAL AMOUNT OF TAXES COLLECTED FROM THE ELEC- 55 TRIC GENERATING FACILITY WHEN AVERAGING THE PAST FIVE TAXABLE YEARS, 56 ENDING WITH THE FINAL YEAR OF PLANT OPERATION: A. 5905 4 1 FIRST YEAR: UP TO EIGHTY PERCENT OF THE PAST FIVE YEAR AVERAGE; 2 SECOND YEAR: UP TO FIFTY PERCENT OF THE PAST FIVE YEAR AVERAGE; 3 THIRD YEAR: UP TO FIFTY PERCENT OF THE PAST FIVE YEAR AVERAGE; 4 FOURTH YEAR: UP TO TWENTY-FIVE PERCENT OF THE PAST FIVE YEAR AVERAGE; 5 FIFTH YEAR: UP TO TEN PERCENT OF THE PAST FIVE YEAR AVERAGE. 6 6. THE FUND ESTABLISHED UNDER THIS SECTION SHALL ALSO INCLUDE INDIVID- 7 UAL REPOWERING SAVINGS ACCOUNTS HELD IN THE JOINT CUSTODY OF THE COMP- 8 TROLLER AND THE DEPARTMENT OF TAXATION AND FINANCE HELD ON BEHALF OF A 9 PARTICULAR MAJOR ELECTRIC GENERATING FACILITY AND SHALL CONSIST OF FIFTY 10 PERCENT OF THE PROCEEDS COLLECTED BUT NOT ALLOCATED BY THE NEW YORK 11 STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY FROM THE AUCTION, PURSU- 12 ANT TO REGULATIONS OF SUCH AUTHORITY, OF EMISSION ALLOWANCES ALLOCATED 13 BY THE DEPARTMENT OF ENVIRONMENTAL CONSERVATION TO SUCH AUTHORITY PURSU- 14 ANT TO REGULATIONS ADOPTED BY SUCH DEPARTMENT. FUNDS SHALL BE CREDITED 15 TO THE NAME AND ACCOUNT OF THE SPECIFIC GENERATOR AND EXPENDITURES FROM 16 THE FUND MAY ONLY BE MADE ON BEHALF OF SAID GENERATOR. A MAJOR ELECTRIC 17 GENERATOR WHICH ESTABLISHES AN INDIVIDUAL REPOWERING SAVINGS ACCOUNT 18 UNDER THIS SUBDIVISION MAY USE SUCH FUNDS FOR THE PURPOSES OF A REPOWER- 19 ING PROJECT, QUALIFIED ENERGY INFRASTRUCTURE INVESTMENT OR A QUALIFIED 20 NEW CONSTRUCTION PROJECT AS DEFINED IN SUBDIVISION THREE OF THIS 21 SECTION. SUCH FUNDS MAY BE ACCESSED FROM AN INDIVIDUAL REPOWERING 22 SAVINGS ACCOUNT AFTER ANY APPLICABLE APPROPRIATE APPROVALS FROM THE 23 DEPARTMENT OF ENVIRONMENTAL CONSERVATION, THE DEPARTMENT OF PUBLIC 24 SERVICE AND ANY OTHER STATE ENTITY WHOSE APPROVAL IS REQUIRED PURSUANT 25 TO THE SCOPE OF THE PROJECT PROPOSED. NO DISBURSEMENT FROM AN ACCOUNT 26 MAY EXCEED THE COST OR VALUE OF THE WORK PROPOSED, AND ONLY EXPENSES 27 CONSIDERED DIRECTLY RELATED TO THE BENEFITS OF THE PROJECT WILL BE 28 ALLOWABLE. DISBURSEMENTS FROM ACCOUNTS SHALL ONLY BE REIMBURSEMENT FOR 29 ACTUAL EXPENSES PAID BY THE GENERATOR AND SHALL NOT BE ADVANCES OR OTHER 30 PAYMENTS. FUNDS HELD IN ANY GIVEN INDIVIDUAL REPOWERING SAVINGS ACCOUNT 31 SHALL BE AVAILABLE FOR USE FOR A PERIOD OF TEN YEARS TOWARD ALLOWABLE 32 EXPENSES AND CAN BE RENEWED FOR AN ADDITIONAL TEN YEARS, IF THE GENERA- 33 TOR APPLIES FOR AN EXTENSION OF THEIR ACCOUNT AND AFTER A THOROUGH 34 REVIEW BY THE PUBLIC SERVICE COMMISSION. 35 7. ALL PAYMENTS OF MONEYS FROM THE FUND SHALL BE MADE ON THE AUDIT AND 36 THE WARRANT OF THE COMPTROLLER TO BE DISBURSED BY THE DEPARTMENT OF 37 TAXATION AND FINANCE IN CONJUNCTION AND CONSULTATION WITH THE COMP- 38 TROLLER. 39 S 3. Section 19-0301 of the environmental conservation law is amended 40 by adding a new subdivision 6 to read as follows: 41 6. IN ADDITION TO EXISTING REGULATORY AUTHORITY, THE DEPARTMENT MAY: 42 A. IN COOPERATION WITH THE DEPARTMENT OF PUBLIC SERVICE AND THE NEW 43 YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY, AMEND PART 242 OF 44 TITLE 6 OF THE NEW YORK CODES, RULES AND REGULATIONS TO, IN A MANNER 45 THAT IS CONSISTENT WITH FEDERAL LAW, COVER ELECTRICITY IMPORTED INTO THE 46 STATE THAT IS NOT ALREADY SUBJECT TO THE COMPARABLE REGULATIONS OF OTHER 47 STATES, BY THE IMPOSITION OF FEES ON THE CARBON INTENSITY OF SUCH ELEC- 48 TRICITY IMPORTED INTO THE STATE DEEMED NECESSARY TO MAINTAIN THE ENVI- 49 RONMENTAL INTEGRITY OF THE MULTI-STATE PROGRAM IN WHICH THE STATE 50 PARTICIPATES; AND 51 B. ASSESS FEES EQUIVALENT TO THE AMOUNT OF PROCEEDS ARISING FROM THE 52 AUCTION, PURSUANT TO REGULATIONS OF THE NEW YORK STATE ENERGY RESEARCH 53 AND DEVELOPMENT AUTHORITY, OF EMISSION ALLOWANCES ALLOCATED BY THE 54 DEPARTMENT OF ENVIRONMENTAL CONSERVATION TO SUCH AUTHORITY PURSUANT TO 55 REGULATIONS ADOPTED BY SUCH DEPARTMENT. A. 5905 5 1 REVENUES DERIVED PURSUANT TO THE PROVISIONS OF THIS SUBDIVISION SHALL 2 BE DIRECTED TO AND DEPOSITED INTO THE "POWER PLANT MODERNIZATION AND 3 COMMUNITY ASSISTANCE FUND" ESTABLISHED UNDER SECTION EIGHTY-FIVE OF THE 4 STATE FINANCE LAW. 5 S 4. (a) The power authority of the state of New York shall within 6 ninety days of the effective date of this act, issue a request for the 7 proposals to purchase from such authority one or more of the ten gas 8 turbine electric generating facilities with a nameplate capacity of less 9 than eighty megawatts each, owned by such authority as of the effective 10 date of this act and located in and around the city of New York. Such 11 request for proposals to sell such generators shall be put out for bid 12 for a maximum of ninety days and shall include the following sites and 13 generation facilities: 14 (1) Two units at Harlem River Yard Plant, located in the Harlem River 15 Yards, at E. 132nd Street, Bronx, New York 10454; 16 (2) Two units at Vernon Boulevard, located at 41-98, 42-02, 42-16 17 Vernon Boulevard, Long Island City, Queens, New York 11101; 18 (3) Two units at the Hell Gate Plant, located at Locust Avenue, E. 19 132nd Street to E. 134th Street, Bronx, New York 10454; 20 (4) Two units at the Windsor Terrace Power Plant, located at 3rd 21 Avenue and 23rd Street, Brooklyn, New York 11232; 22 (5) One unit at Pouch Terminal, located at 1 Edgewater Street, Staten 23 Island, New York 10305; and 24 (6) One unit at North First Avenue and River Street, located at 47-79 25 River Street, Brooklyn, New York 11211. 26 (b) The authority shall issue such requests to determine, among other 27 things, the likely value to New York state for the sale of such genera- 28 tors. The authority shall, within thirty days of the end of the solic- 29 itation period, report on the range of solicited bids to the governor, 30 the temporary president of the senate and the speaker of the assembly, 31 subject to all appropriate and applicable confidentiality requirements 32 with respect to individual bids and information contained therein. The 33 authority shall commence actions, as the authority's board of trustees 34 determines appropriate and necessary, to effectuate the sale of such 35 facilities. 36 (c) The authority is authorized and directed to deposit the proceeds 37 of the sale of such generators into the "power plant modernization and 38 community assistance fund" established under section 85 of the state 39 finance law. 40 S 5. This act shall take effect on the ninetieth day after it shall 41 have become a law.