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Power for Jobs was created in 1997 to provide discounted power to approved businesses in the form of lower rates from their local utility companies. Utility companies in the program also receive a tax break on their utility gross receipts tax for the discount they offer on transmission. Although the program was originally intended to provide transitional assistance during the restructuring of New York's electricity market, it proved so popular that, instead of ending in December 2005 as originally planned, it has been renewed many times, and most recently on an annual cycle.
In 2009 after a lapse in the law due to delayed legislative action, the program was extended for another year, until last Saturday, May 15, 2010. Assemblyman Cahill, the Chair of the Energy Committee, and a joint task force of the legislature have been examining the program for reform and more permanent extension. Governor Paterson has also been seeking changes that would allow for greater stability in the power allocations and expand its availability statewide.
With May 15 in the rear-view mirror and hoping to avoid the problems that were created last year by a protracted lapse in the program, the legislature has passed a two-week extender and negotiation on a replacement bill has accelerated. Indeed, the Senate and the Governor announced a two-way deal yesterday. The deal increases the power available to economic development deals by ending discount power contracts for residential consumers and replacing them with $100 million in direct aid to affected rate-payers. Assemblyman Cahill is considering that proposal and has advanced his own bill, A.10053, to improve the program.
In Overhauling the New York Power Authority's Economic Development Programs, available here, the Citizens Budget Commission assessed Power for Jobs. The report advances a three-part framework for judging any legislation that moves forward.
- Does the new Power for Jobs program support New York's energy goals?
- Will it be connected to larger State economic development goals?
- Will the disclosure required in the program be sufficient to allow the public to judge whether the benefits outweigh its costs?
The success of any economic development program is hard to measure. However, New York's are particularly opaque. Multiple players muddle the scene and compound the difficulties of making decisions about who and what to assist. This must change if New York is to make better use of its increasingly scarce resources. As a final deal is hammered out on Power for Jobs it should be one that addresses the three areas of weakness in the current program, and one that can be judged as not just incremental but potentially transformative. If not then there should be "no deal."
By Elizabeth Lynam