FOR IMMEDIATE RELEASE: June 9, 2008
WITH NEW IBERDROLA GOAL TO INVEST $2 BILLION IN WINDPOWER, SCHUMER PUSHES PSC TO DROP ITS MISGUIDED DEMANDS THAT THE ENERGY COMPANY SELL OFF WIND POWER ASSETS, FOCUS ON KEEPING CUSTOMER RATES LOW
As New York Lags in Wind Power Development, Iberdrola Investment Would Boost Upstate Economy, Create "Green Jobs," Clean Up Air, Provide New Source of Power for NY Consumers
Iberdrola's Energy East Takeover Threatened by Unreasonable PSC Demands that it Sell Off Wind Power Assets
With Consumers, Environmentalists and Businesses in Agreement, Schumer Sends Letter to PSC To
As Iberdrola offers $2 billion investment in wind power for New York, U.S. Senator Charles E. Schumer called for the New York State Public Service Commission (PSC) to drop its misguided demands on the energy firm to divest its wind power apparatus, which threatens to derail Iberdrola's proposed takeover of Energy East. With the support of key business and environmental groups--as well as the state DEC, ESDC -- Schumer urged the PSC to concentrate on keeping customer rates low, providing system reliability and bringing much-needed wind power to New York.
“Upstate New York needs the jobs that clean, green wind power creates and since Iberdrola is ready to put its money where its mouth is - to the tune of $2 billion in wind power investments - the PSC should drop its illogical wind-power divestment demands and broker a deal with the company that would keep customer rates low, provide system reliability and bring much-needed wind power to New York," said Schumer. "Done right, this deal could make New York a leader in renewable energies and give Upstate New York’s economy a much needed shot in the arm."
Iberdrola, a Spanish utility company, is currently bidding to purchase Energy East which is the parent company of NYSEG and RG&E, serving over 1.5 million ratepayers, spanning communities across Western NY, the Finger Lakes Region, the Southern Tier and Hudson Valley, the Capital Region and North Country.
New York State's regulatory approval process for Iberdrola's to purchase Energy East began nearly 10 months ago and is now approaching the final stages. While every other state where Energy East owns assets, including Maine, Massachusetts, Connecticut and New Hampshire, has approved the acquisition, New York State has failed to sign off on it.
Last week, Iberdrola said it would invest $2 billion in wind power for New York if the deal was approved. In light of the news, Senator Schumer wrote a letter to the PSC calling for the agency to drop its divestiture demands and broker a deal that would keep customer rates low, provide system reliability and bring much-needed wind power to New York.
"It makes no sense for PSC to stand in the way with its ideological and misguided demands. We are all working together to ensure that the risk of rate spikes is eliminated - PSC needs to step aside to provide a path for New York to reap the rewards of clean, job-creating power,” said Schumer.
Iberdrola has said that one of the most significant outstanding issues between the PSC and the utility is whether it is allowed to retain the wind power assets it currently owns in New York State and if it is allowed to invest in new projects. Already, the utility has a 50 percent stake in the Maple Ridge Wind Farm in Lewis County, the largest wind farm in the state. And it has ten others in development in New York State. It has already promised at least $100 million investment in wind power upon commencing the acquisition.
The benefit of wind power is just being realized across New York State. Maple Ridge Wind Farm, for example, began operating in September 2006 and provides $8 million annually in local property taxes, pays landowners $1.65 million each year in lease payments, and has created 164 new local long term jobs. Additionally, according the American Wind Energy Association, using wind power cut carbon dioxide emissions by 28 million tons in 2007.
Overall, Iberdrola is the largest producer of wind energy in the world, holding nearly 7,000 mw of generation in capacity. In 2006 alone, it invested $1.32 billion in renewable technologies and has 41,000 MW of renewable resources in their pipeline.
Iberdrola has said that New York State's aggressive renewable energy goals -- the state wants to get 25% of its power through renewables by 2013 -- creates the right incentives for bringing that expertise in wind to New York State. The state is currently at 19 percent renewable power, and many of the gains will have to come from new wind power.
Despite progress in the last several years, New York State is still far from reaching its wind power potential. Currently, only around 1% of New York State's 30 GW peak load, 411 MW, comes from wind energy. New York currently ranks below Texas, California, Minnesota, Iowa, Washington, Colorado, Illinois, Oklahoma and New Mexico when it comes to wind power production. The wind power capacity in Texas is nearly 10 times that of New York. However, as far back as 2004, studies from New York's Independent System Operator (NYISO) found that New York transmission lines can handle as much as 7000 MW of wind energy, and that at least 10% penetration of total capacity, or 3000 MW, could be brought on line. Achieving this ambitious threshold is consistent with New York's goal of having our energy portfolio contain 15% from renewable sources by 2015. Several hundred megawatts of new wind projects are in the pipeline, but many more projects will have to be proposed, permitted and built to meet this goal.
Despite the essential need for more wind power across the state, and Iberdrola’s ability to fill this void, the PSC has stipulated that the energy company sell off its current wind power holdings and pledge to not invest in any wind power in the future. PSC argues that despite the benefits of wind power and the utilities’ promise of investment, "Iberdrola's ownership and development of wind generation is a detriment, and not a benefit to this transaction."
"The notion that the PSC might sacrifice $2 billion of new, job-creating wind power investment upstate New York at the altar of a stubborn and illogical adherence to poorly applied bureaucratic policy, is stone-headed,” said Schumer.
This rigid approach employed by the PSC has led to Iberdrola in recent weeks stating that if state regulators continue to require the sale of wind farm assets in New York State they will walk away from the deal. The PSC has argued that if the utility is allowed to retain their wind generation, they will naturally engage in anticompetitive practices to dissuade their competitors.
The New York State Consumer Protection Board has called PSC’s position "unreasonable" and groups ranging from the Empire State Development Corporation to the Natural Resources Defense Council to the Greater Rochester Enterprise have argued that Iberdrola should be allowed to stay in the wind business because of the significant economic development potential it holds for New York State.
With news that Iberdrola will put $2 billion towards wind power investments in New York, Schumer blasted the PSC and called on the agency to withdraw its demand for Iberdrola to divest its wind power assets. “It’s nonsensical for PSC to work against the interests of its own state – and its consumers,” added Schumer. “We have an opportunity here to embark on a new future in wind power, while ensuring that customer’s keep their rates low.”