April 8, 2005
WindPower NY/American Wind Energy Association
New York Solar Energy Industries Association
Environmental Business Association of New York State, Inc.
Environmental Advocates of New York
Natural Resources Defense Council
Pace Law School Energy Project

Albany Budget Play Puts Clean Energy Investment, High Quality Jobs in Limbo
Businesses, Conservation Groups Urge Pataki and Lawmakers to Fix Problem Measure

ALBANY (April 8, 2005) -- Language slipped into the state budget bill puts thousands of jobs and hundreds of millions of investment dollars in the state’s clean energy technology industry at risk by subjecting a pair of vital, long-range energy initiatives to a yearly budget tussle. The changes threaten a highly successful strategy for balancing the state’s energy supply with more energy-efficient and renewable energy solutions.

Fixing the problem would not add to or disrupt next year’s budget, say the clean energy companies and conservation groups. They are pressing Gov. Pataki and state lawmakers to remove the provision before the final budget is put to bed on Tuesday.

“New York is taking off as the nation’s renewable energy leader. The wind industry is investing hundreds of millions of dollars in the state,” said Peter Mandelstam, President of Arcadia Wind Power and founder and co-chair, Wind Power New York, a project of the American Wind Energy Association. “The budget ploy could easily end up derailing these investments and the economic development that they represent by throwing a wrench into the funding stream.”

The state receives about $150 million each year from electric utility companies to reduce demand on the power grid. The funds are made available on a competitive basis for energy efficiency and clean generating investments. This “system benefits charge” is similar to programs in 20 other states. It is directed by the state Public Service Commission (PSC) and administered by the New York State Energy Research and Development Authority (NYSERDA) on a multi-year basis, allowing participating companies to focus on larger-scale savings and making it easier to obtain additional private financing.

The other major initiative affected by the budget change is the Renewable Portfolio Standard proposed by Gov. Pataki and adopted last year by the PSC requiring that 25 percent of the state’s electricity come from renewable sources by 2013. Eighteen other states have similar renewable energy requirements.

“New York’ smart investments in safe, clean, reliable energy technologies are creating thousands of cutting-edge jobs throughout the state, and saving consumers money on their monthly bills,” said NRDC Senior Attorney Katherine Kennedy. “Why would lawmakers tamper with success?”

Keeping these efforts above the yearly budget fray has helped New York create some of the nation’s most successful energy technology programs. The new budget provision would divert today’s dedicated funding back to the annual fight, subjecting multi-year investment strategies to much greater uncertainty.

Energy Companies Speak Out

“This new budget provision would be enormously disruptive,” said Ira Rubenstein, Executive Director of the 150-member Environmental Business Association of New York State. “New York State has developed highly effective strategies promoting clean energy resources. A sensible, long-range approach lets our businesses plan for and invest in this work, reducing energy costs, creating new jobs and enabling sustainable economic development.”

Investments under the SBC programs have saved New York energy consumers $185 million a year while reducing the threat of blackouts by reducing peak electricity demand by 1,135 megawatts – the equivalent of three large power plants. The projects have kept thousands of tons of hazardous pollution out of our air.

“Clean solar energy is a growth industry in New York, creating skilled jobs for electricians and installers,” agreed Joel Gordes, Executive Vice President of the New York Solar Energy Industries Association. “The budget change could cause a big step backward for our industry.”

“The efficiency investments supported by these funds have significantly improved the business environment for hundreds of our clients in New York State. Disrupting the current reliable funding mechanisms would undermine this great success story, the positive impact the programs provide,” said Scott F. Smith, General Manager of Wendel Energy Services, a Buffalo-based energy services company.

“Our customers, which include large corporations, small businesses, non-profit organizations, colleges and universities, government agencies and thousands of individual consumers, have greatly benefited from NYSERDA's approach to managing the State's environmental and energy needs. Because of the favorable business environment New York has created, Sterling Planet continues to make investments in the state. Changing variables in the renewable energy market is not in anyone's best interest," said Mel Jones, President and CEO of Sterling Planet, Inc., which provides renewable energy blends to homes and businesses nationwide.

Energy Advocates Agree

“New York’s strong efficiency and renewables programs are driving major new investment in the state,” said Jeff Jones Communications Director of Environmental Advocates of New York. “They have created thousands of new jobs in New York. This funding change could send these jobs to other states.” Jones noted that in a March economic study, state Comptroller Alan Hevesi reported that increasing the share of New York’s electricity generated from renewable resources to 25 percent by 2013 would lead to the creation of 43,000 new jobs in the state.

“Rising energy costs are a key issue for New York industries facing increased competition in a global marketplace,” said Fred Zalcman, Executive Director of the Pace Law School Energy Project. “Strategies to support the more efficient use of energy by New York’s businesses have been a lynchpin in the state’s strategy for meeting the competition, and the Legislature’s budget proposal puts this program at risk.”