Home Opinion In My Opinion Thiele: $7.6 billion bailout for aging upstate nuclear plants a double insult...

Thiele: $7.6 billion bailout for aging upstate nuclear plants a double insult to L.I. ratepayers

File photo: Peter Blasl

Long Islanders are no strangers to bad energy policies implemented at their expense. In the 1960’s, the Long Island Lighting Company, the private investor-owned utility for Long Island from 1991 to 1998, embarked on the construction of the Shoreham Nuclear Power Station. In excess of $6 billion were spent on the construction of Shoreham, without ever considering whether or not there was a viable evacuation plan for Long Island’s 3 million people. There wasn’t. Shoreham never opened.

Instead, New York passed legislation in 1986 creating the Long Island Power Authority to close Shoreham. However, it was not the LILCO stockholders that paid for LILCO management’s mistake. Instead, the bulk of the cost was borne by Long Island’s ratepayers. Today, LIPA holds about $9,000 in debt per customer. Long Islanders continue to pay for Shoreham today, 30 years after Shoreham was closed. The debt has been refinanced time and again.

Long Islanders pay some of the highest utility rates in the country because of Shoreham and its aftermath. There is no question that this expense has stunted the Long Island economy by making it an expensive place to live and do business. No subsidy came from the State of New York to help Long Islanders crippled by LILCO’s mistake.

To add insult to injury, in 2013, the State of New York, over my “no” vote, enacted the so-called “LIPA Reform Act”. The result of the law is now clear. Rates are higher. Debt is higher. Transparency and oversight over Long Island’s electric utility has been largely eliminated. The State Public Service Commission has no regulatory authority over rates. The state comptroller and state attorney general have no review over contracts involving LIPA. Ratepayers can judge for themselves if that is a success.

Now, another energy disaster is aimed directly at Long Islanders. Last August, the New York State Public Service Commission approved a $7.6 billion bailout plan to keep open four aging and expensive upstate nuclear power plants. In a free market, without the subsidy, these plants would close because there are cheaper and safer sources of energy available.

It makes no sense to pour billions of dollars into these aging nuclear power plants. Instead of propping up the failed policies of the past, we should instead be investing in a sustainable energy future that will reduce the greenhouse gases that exacerbate climate change.

Beginning on April 1, this subsidy will be paid by every ratepayer in the State of New York, including Long Islanders, through a flat fee as a monthly surcharge on every utility bill in the state.

Long Islanders paid for LILCO’s Shoreham mistake so that a nuclear plant would not open. Now the state wants Long Islanders to pay again so that nuclear plants in another part of New York will not close. There is no consistency in this energy policy, except that Long Island ratepayers always pay and corporations get bailed out.

Make no mistake about it, this $7.6 billion subsidy is nothing more than a tax increase. It is one of the largest tax increases in recent history and it will be buried in your electric bill. Further, it was not even enacted by elected officials, but by appointed bureaucrats in Albany at the PSC.

It was no accident that this multi-billion subsidy was approved last August, when the State Legislature was out of session. Nevertheless, I immediately drafted legislation which was filed at the beginning of session (A.5985) that would place a moratorium on this subsidy until the State Legislature had a chance to review and take action on this plan.

On March 6, several committees of the State Assembly held a public hearing on the nuclear bailout. We heard testimony from those on both sides of the issue for more than seven hours. However, neither the State PSC nor the utility company who most benefits from the bailout showed up to answer questions. Seldom has there been such a lack of respect for open and transparent government.

April 1 has come and gone and I was deeply disappointed that the Governor and the State Senate did not agree to include a proposal presented in the Assembly’s one-house budget resolution that would have placed the Zero Emission Credit program on hold in the final state budget. Going forward, the Legislature plans to hold a joint hearing on the issue of charging subsidies to save nuclear power plants. The PSC and the New York State Energy Research and Development Agency have been asked to speak about the impact on ratepayers. The governor has agreed to have the PSC appear at a hearing on the Clean Energy Standard by April 30.

I remain committed to press hard against this subsidy because it is imperative that all the details of the bailout are made public and the Legislature can properly evaluate if it is in the public’s best interest and fair for all utility ratepayers. Further, we must look into whether or not there are better policies that would provide New York with the energy it needs while meeting the Clean Energy Standard of 50 percent renewable energy by 2030. Long Islanders deserve nothing less.


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Fred Thiele

Fred Thiele (I, D-Sag Harbor) represents the First Assembly District, a district that includes southeastern Brookhaven, Southampton and East Hampton towns. He was first elected to the Assembly in 1995, after serving as Southampton Town supervisor and Suffolk County legislator.