This new report published by the Empire Center for New York State Policy, a project of the Manhattan Institute for Policy Research, discusses the rising costs of electricity in the State. A number of recommendations are offered, including an overhaul of the Renewable Portfolio Standard, a state policy that supports clean-energy generation such as wind farms. The Executive Summary is provided below. The full report can be downloaded by clicking on the link below.

Executive Summary:

Energy prices are a major factor in New York's high cost of living and doing business, contributing to what Governor Eliot Spitzer has called a "perfect storm of unaffordability" driving people and firms out of the state.

1. The average retail price of electricity in New York is well above the national average. Only Hawaii and Connecticut have higher average rates.

2. But high prices aren't the only problem. Within the next few years, New Yorkers will have serious reason to worry about whether their lights will even be staying on.

New York will need a lot more power-the equivalent of more than five new 500-megawatt generating plants-to avoid blackouts early in the next decade, according to the nonprofit corporation responsible for operating the state's bulk electricity grid.

Yet only one new large-scale generating plant, representing barely one-eighth of the required additional capacity, has been proposed in the state since the expiration five years ago of Article X, the landmark state law designed to speed the building of such facilities.

Action by Albany is urgently needed to expand energy capacity and reduce energy costs. Yet state laws and regulations in recent years have actually done the opposite-limiting capacity and raising costs. And the Spitzer administration's energy policies threaten to make the situation worse.

This report reviews the state policy missteps that have threatened to short-circuit New York's energy system and recommends a series of corrective measures, including:

• Reauthorize the Article X siting law without new restrictions on energy sources.

• Impose a moratorium on further increases to the System Benefits Charge used to fund state energy research and development programs, which has increased by almost 200 percent since being instituted in 1998 and which will have cost New Yorkers $1.85 billion by 2011.

• Conduct a full-scale audit and cost-benefit analysis of the state's environmental and energy regulations that take into account the collective burden of those rules.

• Reconsider acid-rain regulations that add to New Yorkers' costs while doing nothing to stop acid rain caused by emissions from out-of-state power plants.

• Refashion the state's Renewable Portfolio Standard to allow energy companies, not state bureaucrats, to decide how to reach clean energy goals.

• Encourage further development of nuclear power and support the federal regulatory process for reviewing the proposed relicensing of the nuclear plant at Indian Point.

• Avoid tax and fee hikes that add to New York's already high energy costs.

• Suspend state involvement in the Regional Greenhouse Gas Initiative (RGGI), which will raise rates but fail to combat global warming, until feasible carbon-capture technologies are available.

Web link: http://www.empirecenter.org/files/Energy-02-08-2.pdf