1. NEW YORK STATE ECONOMIC SURVIVAL GUIDE
ISSUE Lower the Cost of Energy
OUR STATE SUFFERS FROM THE
HIGH COST OF POWER.
The strain of utility taxes is a key reason that New One potential source is the Marcellus Shale, which
York loses businesses to competing states. Taxes fuel lies below a vast region covering the Southern Tier,
higher energy costs compared to other states. In fact, and contains huge amounts of natural gas. Extracting
New York has the highest average retail price for the gas requires hydraulic fracturing, which is being
electricity of the largest 15 states. Nationwide, only used at scores of drilling operations in Pennsylvania
Hawaii and Connecticut utilities charge more. At an just across the New York border. But the state
average of 16.57 cents per kilowatt-hour, electricity legislature has halted new permits for Marcellus Shale
costs in New York are 78 percent higher than in extraction until May 15, 2011. We need to accelerate
Pennsylvania, 97 percent higher than in Ohio and a negotiated settlement permitting gas extraction
more than double North Carolina’s.24 from Marcellus Shale. It will bring jobs and income
to New York, along with lower gas prices.
It’s critical to make New York’s energy costs more
competitive, but the state increasingly takes money
from utilities as a backdoor tax. Excess “18-a” utility
assessments, which are designed to pay for the Public
Service Commission, are diverted to the general fund, steps to
instead of being returned to utility customers. Funds
raised by the Regional Greenhouse Gas Initiative
(RGGI)—a cap-and-trade system for reducing
SURVIVAL
emissions from electricity-producing power plants Cut taxes on utilities, starting
in 10 states—are also being diverted to the general with the systems benefit charge
fund, which amounts to a new carbon tax. Reduce excessive 18-a utility
assessments
A good place to start lowering taxes is to eliminate Renew Article X so that we can
the systems benefit charge, which benefits programs bring new power plants online
administered by the New York State Energy Research safely but with minimum red tape
and Development Authority. These are worthy causes, Reach a legislative settlement
but they don’t justify reduced competitiveness. that will permit the extraction
of gas from the Marcellus Shale
The end of 2002 saw the expiration of New York State
Article X, which streamlined the process for siting
new power plants. Proposed legislation in 2007 that
would have revived Article X failed to gain bipartisan
support, but the effort should be renewed in 2011.
Article X would help our state develop new energy
sources, creating jobs and reducing electricity prices
for all New York residents and businesses.
24 Average Retail Price of Electricity
by State, 2008, U.S. Energy
Information Administration,
www.eia.doe.gov