Updates from the Committee on Energy

Recharge New York Provides a Replacement for Power For Jobs
New program encourages job creation, energy efficiency and capital investment by New York businesses
March 28, 2011

Albany – Two years after the commencement of a long series of public hearings, roundtable discussions and negotiations, Assembly Energy Committee Chair Kevin Cahill (D-Ulster, Dutchess), announced an agreement on legislation to create the Recharge New York Program, a groundbreaking approach designed to help businesses meet their energy needs in the most efficient manner possible. The new permanent program will provide 910 megawatts of low cost economic development power to responsible businesses across the state in return for enforceable commitments for job creation targets, capital investments and energy efficiency improvements.

"High energy costs will no longer stand in the way of businesses investing in New York. We finally have the tools we need to retain the anchors of our communities and attract new ventures," said Assemblymember Cahill. "We heard time and again from industry and economic development leaders that the old approach was not working. The Recharge New York Program will help meet the energy needs of employers while providing New Yorkers with the assurance that their resources are being used efficiently and effectively.”

Recharge New York is a sustainable and predictable energy program for businesses and not-for-profits. It is designed to protect and create jobs and encourage new capital investment by New York businesses. The legislation significantly reforms the long languishing Power for Jobs program that failed to promote energy efficiency and has not extended benefits to new businesses in recent years. Power for Jobs was scheduled to expire on May 15, 2011. Recharge New York will be available statewide and will require recipients to become more energy efficient in exchange for an award under the program.

"This program is key to revitalizing New York's economy. It will help businesses prosper by improving their productivity and competitiveness," said Assemblymember Cahill. "It represents a significant enhancement of the Power for Jobs program by requiring the efficient use of electricity and strict accountability for job creation and investment.”

“Recharge New York reboots an ineffective program and creates a new playing field that will allow employers from all corners of the state to compete on an equal level,” said Assemblymember Cahill.

Power for Jobs was first enacted as a temporary measure to ease the transition into a deregulated energy market. Since then, the legislature has acted to extend these programs on a year to year basis for the last six years. These extensions, while maintaining benefits for current participants, kept the program closed to any new businesses. Recharge New York, when it goes into effect in July of 2012, will allow businesses from all areas of the state to compete for new awards opening up opportunities to regions that had previously been shut out, like the Hudson Valley.

The new program will, for the first time, be backed by hydro power resources generated by the New York Power Authority. The power, currently set aside for the over two million residential customers of three upstate utilities, will now go to businesses throughout the state. Residential customers will instead receive a monthly bill credit to offset some of the potential increases in electric bills. They will also have the opportunity to permanently lower their energy costs by participating in a new energy efficiency program created exclusively for households that had been receiving the hydro power.

“Recharge New York will provide a much needed boost to our economy but not at the expense of upstate households,” said Assemblyman Cahill. “I worked hard to protect upstate residents by insisting on a fair compensation plan and the opportunity to actually lower bills with energy efficiency.”

Recharge New York promises to provide significant and stable assistance to help meet the current and future energy needs of businesses. Employers can get energy assistance by developing and executing solid, long range plans for meeting energy efficiency benchmarks, capital investments and job creation and retention. Applicants will also have to demonstrate their importance to the economic vitality of a community.

The Energy Committee’s fact finding hearings and roundtable meetings verified that the cost of electricity has a significant impact on economic development, employment levels and decisions to retain, attract or expand businesses. The Recharge New York Program will be coordinated by the New York Power Authority, which will be charged with protecting and helping create hundreds of thousands of jobs throughout the state.

“Enacting a permanent replacement for Power For Jobs was essential. That is why it was a provision in legislation I first introduced last year,” said Assemblymember Cahill. “Governor Cuomo’s willingness to make this an early priority along with the hard work of my counterpart, Senator George Maziarz, were keys to finally putting the new program in place.”

Highlights of the Recharge New York Program:

Mutual Long Term Commitment: Businesses repeatedly expressed a need for long-term contracts in order to commit to investments and job creation. The Recharge New York Program provides for contracts of up to seven years with a compliance review to determine if the business will be eligible to apply for a subsequent award.

Price Certainty: The new program will, for the first time, offer price stability by providing businesses with low-cost hydro power generated by NYPA. This will give employers the assurances they need to make significant investments in their New York operations.

Energy Efficiency: The existing programs have no requirement that participants use our precious energy resources efficiently. Recharge New York will require businesses to undergo energy audits to identify improvements and then work to achieve those efficiencies where cost effective.

Consumers Protected: Upstate “Rural and Domestic" residential customers currently benefiting from the hydro power will receive bill credits to offset the loss of the power, along with the option to participate in an energy efficiency program designed to help permanently reduce household energy costs.

Improved Standards: In the past, the main emphasis of the program has been on the number of jobs created or retained. While still a component of the of the new program, Recharge New York also takes into account the total payroll, capital investment, impact on the regional economy and coordination with state and local economic development efforts. Capital investment is key. If a company is willing to make significant investments in their facilities they are making a long term commitment to keeping jobs in our state.

Accountability: There will be thorough performance review provisions included in the contracts. Beneficiaries will be held accountable for meeting targets for job creation, capital investment and energy efficiency.