Whistleblower Protection for Utility Workers:
Utility workers perform their jobs at the direction and control of utility company management. During a storm of this size and magnitude workers are often asked to participate in activities that they believe could be harmful to rate payers and the overall restoration efforts. For example, a recent report issued by UWUA Local 1-2 recounts that during the Sandy restoration efforts union employees were asked and refused to use equipment that the company had previously banned for safety reasons. Utility workers need the ability to refuse to participate in activities they believe will lead to unsafe conditions for employees and the public without the threat of retaliation. In addition, out of state contractors are not held to the same standards of employees doing the same work under the Governor's budget.
Workforce Staffing Ratios:
Inadequate staffing is the primary reason for poor performance and utility restoration during these types of storms. And the problems begin before the storms hit. The utilities have failed to invest in the workforce to the degree necessary to maintain the utility system, therefore in times of emergency the system is not sufficiently resilient. In addition, the employees are often forced to work several hundred hours in over time each year because of the lack of full-time employees. This mandatory overtime has taken a serious toll on the workforce both physically and mentally. There are two sets of staffing issues: those that involve day-to-day operations, and those specific to storm restoration. We ask the Governor to direct the PSC to develop performance standards for utilities' response to emergencies, storms and natural disasters. These standards should include standards for: planning, hazard mitigation, staffing and equipment ratios, response times and recovery efforts in response to emergencies. Any such staffing ratios need to take into account geography and the number of ratepayers in a particular area. We understand that the utilities will rely on mutual aid, and we appreciate the assistance. However, we urge that the PSC be directed to perform an evaluation of the costs and benefits of mutual aid. Our experience with Hurricane Sandy storm restoration is that relying on out-of-state utility workers who are not familiar with the system can be very inefficient. In general, reliance on mutual aid should be kept to a minimum, and we believe that this objective can be achieved if the utility's day-to-day field staff is properly trained and sufficient in size to perform ongoing maintenance (including preemptive maintenance) in an efficient manner. A number of the utility companies are very top heavy with management. We recommend a review by the PSC of the management to workforce ratio in utility companies and transparency on management salaries. Ultimately, the PSC and regulated utilities should set (and revise as needed) credible baseline staffing levels, and the utilities should be obligated to maintain staff at those levels. This effort should include consideration of well-known utility workforce "graying" issues, as there should be assurance that utilities are planning for anticipated retirements and potential staffing/experience gaps.
Energy Sector Workforce Training:
It takes approximately four (4) years of classroom and on the job training to properly train a lineman to do their work unsupervised. For years IBEW has made it clear to state government officials that we will have a significant gap in trained lineman as attrition takes place with no apprenticeships offered. We have serious concerns about the Governor's proposal on energy sector workforce training. Those concerns stem from the fact that the Governor has offered no proposal except a line in the budget with no article VII language. We recommend that a program such as the National Utility Industry Training Fund be reviewed as a potential program and that IBEW and Local 1-2 have significant input in any program.
Two New Public Service Commissioners:
We believe that the current make-up of the Public Service Commission could be greatly improved through the addition of a consumer advocate and a labor relations designee. Ensuring that at least two of the Commissioners have expertise in these areas would provide a more balanced approach to cases before the commission and allow for the expertise of those who represent the rate payers and the utility workers to be heard in the decision making process. We also believe that the inclusion of these Commissioners would enhance the credibility of the Commission, and improve the quality of PSC decisions and oversight activities. In addition, and to the extent not already in place, we believe that the PSC's credibility would be enhanced if restrictions were imposed limiting the ability of PSC employees to move directly and immediately from working for the Commission to employment at a regulated utility.
The $2 Billion New York State Electric Transmission Superhighway Plan
Governor Andrew Cuomo announced the intent to support a $2 Billion NYS Electric Transmission Superhighway Plan during the 2012 State of the State address. The International Brotherhood of Electrical Workers (IBEW) has prepared this brief to describe the enormous opportunities and background information related to the implementation of this plan - not only for those of us who make a living keeping the lights on and responding to the manufacturing and delivery of energy, but also for those New Yorkers who rely on getting power to their homes and businesses.
The governor is to be commended for addressing an issue that has been neglected by previous administrations. We hope you find this brief helpful and informative, and we are committed to working with legislators and policymakers to continue to deliver safe, affordable and reliable electricity.
NYS has portions of its transmission lines in desperate need of replacement due to age , as detailed in the NY ISO Power Trends 2011 report. There exists wrapped in the aged system a condition known as “ transmission congestion”, which will only allow a limited amount odd electricity to move through certain points of the aged system. The demand for electricity is greatest in the densely populated New York City region - accounting for 54% of total NYS demand ; whose residents paid nearly $250,000,000 more than necessary for electricity in 2008 alone!
In 2007 the US Department of Energy (US DOE) identified several critical transmission areas in the US, including a portion in NYS detailed in this map.
The advent of deregulation created a scenario where the transmission system - described as the “forgotten stepchild of deregulation” by an historic NYS energy professional. This was not created for long distance power transmission, but rather franchise specific design. Deregulation additionally created transmission owners that no longer had a business reason to care about power generation and power generators that were at the mercy of transmission conditions combined.
A regulatory climate hostile towards rate cases to address critically needed upgrades, and upgrades necessary to lower rates for downstate, are imperative for the safety and reliability of the NYS power grid.
The NYS ISO , together with the New York Power Authority(NYPA) and all the NYS transmission owners, have worked for several years to compile the following areas in need of up grading. With positive cost/ benefit analysis completed, the identified areas are increasingly unreliable and their age necessitates replacement.
You will notice in the above maps the common areas after cross referencing the US DOE identified critical NYS transmission areas with the areas also identified by the NY ISO as aged and in need of upgrade. The NY ISO map includes a highlighted area running north from Utica that is the NYPA line that runs to Quebec, also aged and in need of upgrading.
While the age, safety and reliability of the system are compelling reasons for the NYS PSC and others State agencies to take action to upgrade the NYS transmission system, the dramatic difference in pricing above and below transmission congestion is the core of the ability to finance these long overdue upgrades.
The IBEW Utility Labor Council of NYS agrees there is a flaw in deregulation, and there has been a decade long stalemate in the ability to move forward with transmission investments that all New Yorkers will benefit from.
The inability to get power to marker in NYS has created another crisis – many NY Power generators are struggling to stay in business because of the RGGI tax, natural gas prices and other cost variables – exacerbated by transmission constraints. The urgent attention to address NYS transmission congestion will alleviate a major portion of these challenges and facilitate fair competition. These power generators were promised that open competition was to be delivered in NYS – yet the inability to get their product to market in all of NYS is a challenge beyond their control, and one that threatens their ability to continue to employ, pay taxes and do business in NYS. In short, the prices paid for electricity in the NYC area and the ability for all NYS power generators to fairly compete in the fault of NYS not delivering on the open competition promises of deregulation through the persistent neglect of transmission lines. We believe that transmission owners would gladly engage in efforts to improve their lines if assured that NYS would look favorably on this critical need.
Three power plants in Western New York alone have a combined economic impact of nearly $460 million annually to their communities, and stand threatened by challenges that include neglected transmission lines.
In response to the years of neglect, their price and power demand in the NYC area has forced alternatives that include import projects from other states, and currently – a major 1000 MW import project from Canada is sitting in front of NYS decision makers at the NYS Public Service Commission. This project seeks to run an exclusive extension cord from Quebec to NYC than denies any NYS power generator a chance to compete. This exclusive cable project exists only because of the persistent neglect of the NYS transmission system, and will make the ability to finance critical in-State investments impossible.
An operational 1000 MW import project means that the NY transmission system described as in critical need of upgrading in 2007 by the US Dept. of Energy, will continue to be neglected, threatening the NYS energy economy and the safety and reliability of the system that all NY residents are dependent on.
Conversely, a report generated by the Brattle Group suggests that the $2 billion NYS Transmission Superhighway Plan referenced by the Governor Cuomo in his 2012 State of the State address will create between 12,000 and 15,000 jobs per $billion in direct and indirect transmission jobs, as well as thousands of additional power generation jobs – including renewables projects currently on hold due to transmission congestion – from NYS power generators confident after NYS transmission upgrades that their power can get to NYC from anywhere in NYS.
This map details the route of the 1000 MW import project. This exclusive new line is totally separate from the existing critical, aged NYS transmission lines identified by the NY ISO and the US DOE. The power imported through this exclusive cable and the associated revenues will change and threaten the business case for helping to pay for the needed improvements in the NYS transmission system – the system that all New Yorkers depend on. Consequently, the ability to move cheap, abundant made in NY power that can and should be delivered from existing struggling upstate NY power generators and future generators including renewables is threatened by this exclusive cable import project. An alarmingly less reliable NYS transmission system and lost NYS power generation jobs will be the product of importing power unless we repair our current NYS transmission lines.
Do we import power and further threaten NYS electric transmission system reliability and NYS Power Generators?
Do we invest in the NYS transmission system and allow abundant, available and affordable upstate NY power to make it downstate and further stimulate NYS power generation, including renewable energy, and dramatically grow the State’s energy economy?
The National Economy
The U.S. economic recovery survived an almost continuous series of setbacks in 2011 that included spiking energy prices, supply chain disruptions resulting from a virtual shutdown of the world's third largest economy, threats to the global financial system stemming from the European sovereign debt crisis, and uncertainty surrounding the U.S. government's own looming debt problems. As the impacts of the oil shock and Japanese supply chain disruptions unwind, some positive momentum appears to be building, with the fourth quarter of 2011 now expected to have exhibited the strongest growth since the first half of 2010. However, the economy faces many headwinds going forward, including a slowing global economy, financial market volatility, continued weak income growth, and a very slowly moving housing sector. Consequently, real U.S. GDP is now projected to grow 2.2 percent for 2012, following growth of 1.7 percent for 2011. The housing sector has been virtually absent from this recovery. If home foreclosures accelerate substantially more than expected, a housing market recovery could be further delayed. A surge in foreclosures could also impede the recovery in home prices, which would in turn delay the recovery in household net worth, also resulting in lower rates of household spending than projected. Alternatively, a large increase in household formation could result in stronger demand for housing and therefore a quicker recovery in home prices and construction employment than expected. Finally, oil prices are once again on the rise due to global tensions. These increases could cause gasoline prices to return their lofty May 2011 peaks. Since energy price growth acts as a virtual tax on household spending, faster growth in the price of oil could also result in lower consumption spending than anticipated. A quick resolution of these tensions could send energy prices back down faster than expected, resulting in greater real household spending for non-energy goods and services.
Multi-Year Financial Plan Projections
All Funds business tax receipts for FY 2013 of roughly $8.2 billion are projected to increase by approximately $230 million (2.9 percent) from the prior year. Corporation franchise tax receipts for FY 2013 are projected to increase by $68 million (2.1 percent) from the previous year. Growth in gross collections and lower refunds is partially offset by lower audit receipts. Included in FY 2013 is an incremental increase of $71 million (from $313 million in FY 2012 to $384 million in FY 2013) in receipts from the deferral of certain tax credits. Adjusting for the credit deferral, receipts are estimated to show no growth from FY 2012. Corporation and utilities taxes are projected to grow by $62 million (7.6 percent). Absent the large refund in FY 2012, growth would be 2.6 percent. Both sections 186-e and 186-a are forecast to grow modestly based on revenue expectations for the telecommunications and residential energy sectors. Insurance taxes are forecast to increase $50 million (3.5 percent). The year-over-year increase reflects trend growth in the insurance tax as the industry continues to recover from the economic downturn. Bank tax receipts for FY 2013 are projected to decline by $23 million (1.7 percent) from the previous year. The unusually high commercial bank calendar year filer payments seen in FY 2012 are not expected to be repeated in FY 2013, resulting in a decline in projected gross receipts, which is partially offset by a projected increase in audit receipts. The projected PBT increase of $73 million is due to an increase in the PBT rate index of 5 percent effective in January 2012 and the projected increase in the PBT tax rate index of 4.3 percent effective in January 2013. Motor and diesel fuel taxable consumption are also projected to grow compared to the prior fiscal year. All Funds business tax receipts for FY 2014, FY 2015, and FY 2016 reflect trend growth that is determined, in part, by the expected level of corporate profits, the expected profitability of banks, the change in taxable insurance premiums, residential energy expenditures and the consumption of telecommunications services. Business tax receipts are estimated to increase to $8.5 billion (3.7 percent) in FY 2014, decline to $8 billion (4.9 percent) in FY 2015, and increase to $8.7 billion (7.9 percent) in FY 2016. The decline in FY 2015 reflects the first year of the credit deferral payback to taxpayers. General Fund business tax receipts will reflect the factors outlined above, and are projected to increase to $6.2 billion (3.9 percent) in FY 2014, decline to $5.7 billion (8 percent) in FY 2015, and increase to $6.3 billion (10 percent) in FY 2016.
Multi-Year Financial Plan Projections
Selected assumptions used in preparing the spending projections for the State’s major programs and activities are summarized in the following table. Growth in State Operations spending over the multi-year Financial Plan is concentrated in agencies that operate large facilities, such as the State University, the mental hygiene agencies, and Corrections and Community Supervision. The main causes of growth include inflationary increases in operating costs expected for food, medical care and prescription drugs, and energy costs in State facilities, offset by expected savings from enterprise procurement efforts New York Works Infrastructure Investment. The 2012-13 Executive Budget will seed a $15 billion initiative to rehabilitate the State’s critical infrastructure assets and create thousands of jobs by accelerating capital projects. The program will build and/or improve bridges, highways, parks, waste water treatment facilities, renewable and efficient energy systems, flood control structures, dams, SUNY facilities and other critical infrastructure components. New appropriations for New York Works in the Executive Budget total $1.64 billion, including $723 million in State funds and $917 million of Federal transportation funds. These new resources, along with $600 million in funding from existing State programs, will spark nearly $12.8 billion of additional investments in job-creating infrastructure. The additional investments include more than $760 million of Federal matching funds for environmental and economic development projects; $9 billion from public authorities and local governments for major projects and $3 billion of private sector investment to match public seed money for economic development and energy projects.
The $75 million New York Works Economic Development Fund Program will provide capital grants to support projects that facilitate an employer’s ability to create new, or retain existing, jobs. In addition, the program will fund infrastructure investments necessary to attract new businesses or to expand existing businesses, including improvements to transportation, water and sewer, communication, broadband internet access, and energy generation and distribution facilities.
Transformative Projects and Programs
In addition to the New York Works program investments, the 2012-13 Executive Budget will appropriate funds for commitments previously made to projects across the State that attract investment and create and retain jobs. These include:
- $250 million in capital funding for facilities at the SUNY College for Nanoscale and Science Engineering that will support the development of the next generation of computer chip technology in New York. The State capital commitment has helped to leverage an overall $4.4 billion investment by an international technology group that includes Intel, IBM, GlobalFoundries, TSMC and Samsung. Cumulative State funding for the project will total $400 million, including support to be provided from existing energy programs and previously appropriated capital funds.
This budget maintains services at current levels for parks, environment and agricultural programs, and makes capital investments to strengthen infrastructure and improve energy management. The State’s environmental, energy and natural resource agencies support programs including land use planning and preservation, recreation and tourism, agricultural development, protection of water resources, regulatory oversight of environmental laws and regulations, oversight of food supply and food safety programs, and regulation of the State’s utilities and energy programs. The Department of Environmental Conservation (DEC) and the Office of Parks, Recreation and Historic Preservation (OPRHP) oversee nearly 4.9 million acres of open space statewide, including 2.6 million acres in the Adirondack Park and nearly 288,000 acres in the Catskill Forest Preserve. Additionally, the State park system comprises 213 State parks and historic sites.
The Department of Public Service (DPS), the staff arm of the Public Service Commission, regulates the rates and services of public utilities — an industry with an estimated $32 billion in revenue — oversees the siting of major utility infrastructure, and manages other functions. In conjunction with the New York State Energy Research and Development Authority (NYSERDA), DPS oversees and administers the State’s energy efficiency and renewable energy programs. The New York Power Authority (NYPA) supplies power statewide through two large hydroelectric facilities and more than 1,400 miles of transmission lines. NYPA does not receive direct support from the State.
The State’s environmental and energy agencies protect the State’s air, land and water; oversee food safety; provide critical support to the agricultural community; manage our energy resources; and offer safe, affordable and accessible recreational opportunities to New Yorkers. The State has protected more than 750,000 acres of open space since 2003 and more than 37,000 acres of farmland since 1996. Since 1992, the State parks system expanded by more than 25 percent, with 66,000 acres and 28 new parks added. These actions have been financed primarily through the Environmental Protection Fund (EPF).
Proposed 2012-13 Budget Actions
The Executive Budget continues to support critical programs including the EPF, which will be maintained at $134 million, the same level as in 2011-12. In addition, the Budget includes new capital funding under the New York Works program to accelerate capital infrastructure projects Statewide, spur the creation of jobs, and leverage private sector and Federal investment. For the environment, the Budget includes $102 million in new funding for DEC to advance flood control, coastal erosion and critical dam safety projects, and $94 million for the large backlog of capital rehabilitation and improvement needs in 48 State parks and historic sites and the ski facilities operated by the Olympic Regional Development Authority. The Executive Budget makes minimal spending reductions to parks, environment, and agricultural programs that reflect initiatives to improve the efficiency of operations. The Budget maintains services at current levels in all of these agencies while making capital investments to strengthen infrastructure and improve energy management.
Implement the NY-SUN Solar Program
As part of Governor Cuomo’s NY-SUN Solar Program, there will be two tax credits:
- Expand Sales Tax Exemption For Solar Equipment Purchases. Solar energy equipment purchased by commercial customers (e.g. retailers, hotels) would be exempt from the State sales tax. Local governments would be provided the option to offer the same exemption from their local sales tax. Currently, purchases by residential and industrial customers are exempt.
- Expand Residential Solar Equipment Credit To Leases. Lessees of residential solar equipment would be eligible for personal income tax credit equal to 12.5 percent of annual leasing costs. Currently, purchasers of such equipment are eligible for a 25 percent credit.
Strengthen Energy Infrastructure
State agencies and public authorities will work together on a master plan for an “Energy Highway” to power the State’s energy needs for the next half-century. The plan will leverage $2 billion in private investment to finance and build infrastructure critical to update the system and increase capacity