>>
Gary: JUST AHEAD ON "NEED TO KNOW," YOU MAY GET YOUR POWER FROM
RG&E, BUT WHERE DO THEY GET IT FROM? YOU MAY NOT KNOW THAT ROCHESTER
IS A NUCLEAR TOWN. JOIN US NEXT FOR THE FIRST OF A SPECIAL TWO-PART
COLLABORATIVE INVESTIGATION WITH WOKR TV's NEWSSOURCE 13 AS
WE GO INSIDE RG&E's TWO MAIN POWER PLANTS TO FIND OUT IF ROCHESTER
WILL HAVE ENOUGH ENERGY FOR THE FUTURE. IT'S ALL COMING UP NEXT
ON "NEED TO KNOW."
>>
WE'RE NOT SUSCEPTIBLE TO THE PROBLEMS THAT HAVE PLAGUED CALIFORNIA
IF WE KEEP OUR EYE ON THE BALL, IF WE PAY ATTENTION, IF WE WORK
TOWARD A SOLUTION.
(Music)
>>
THIS IS "NEED TO KNOW," THE ROCHESTER AREA'S ONLY IN-DEPTH NEWS
PROGRAM. "NEED TO KNOW" IS A PRODUCTION OF WXXI NEWS AND PUBLIC
AFFAIRS COVERING ISSUES, POLITICS, EDUCATION AND CURRENT EVENTS.
>>
"NEED TO KNOW" IS MADE POSSIBLE BY THE DAISY MARQUIS JONES FOUNDATION,
BY DORSCHEL LEXUS, AND THROUGH THE SUPPORT OF VIEWERS LIKE YOU.
>> Gary: THANK YOU FOR JOINING US. I'M GARY WALKER. THE HOT
SUMMER AND ROLLING BLACKOUTS MAKING HEADLINES OUT OF CALIFORNIA
MAY HAVE MANY OF YOU WONDERING ABOUT OUR ENERGY SUPPLY AND WHETHER
WE COULD SUFFER THE SAME FATE. ROCHESTER GAS AND ELECTRIC SAYS
NO. THEY REPORT 50% OF THEIR ENERGY SUPPLY COMES FROM THE GINNA
NUCLEAR POWER PLANT, 25% FROM THE RUSSELL COAL STATION. BOTH
POWER STATIONS ARE OWNED AND OPERATED BY RG&E. THE REMAINING
25% COMES FROM LONG-TERM CONTRACTS WITH HYDRO ELECTRIC AND GAS
COMPANIES. RG&E SAYS THEY PRODUCE MORE THAN ENOUGH ENERGY FOR
OUR AREA. THE GINNA NUCLEAR POWER PLANT AND THE RUSSELL COAL
STATION HAVE BEEN PROVIDING ELECTRIC POWER TO OUR AREA FOR DECADES,
BUT DO YOU KNOW WHERE -- DO YOU KNOW WHERE TO FIND THEM OR HOW
MUCH ELECTRICITY THEY PRODUCE? "NEED TO KNOW'S" MATT CUMMINGS
GIVES A THUMBNAIL SKETCH.
>>
Matt: THE RUSSELL COAL STATION IS LOCATED ON THE SHORES OF LAKE
ONTARIO IN THE TOWN OF GREECE, NEAR CHARLOTTE BEACH. IT OPENED
FOR SERVICE IN 1948. AT ANY ONE TIME, RUSSELL CAN PRODUCE UP
TO 257,000 KILOWATTS OF ELECTRICITY, OR ABOUT ONE-QUARTER OF
OUR COMMUNITY'S ELECTRIC NEEDS. THE GINNA NUCLEAR POWER PLANT
IS LOCATED ABOUT 20 MILES FROM DOWNTOWN ROCHESTER IN THE TOWN
OF ONTARIO. IT OPENED FOR SERVICE IN 1970 AND CAN PRODUCE UP
TO 500,000 KILOWATTS OF ENERGY AT ANY TIME OF THE DAY, OR HALF
OF THE ROCHESTER AREA'S ELECTRIC NEEDS. THE FACILITY'S OPERATING
LICENSE IS UP FOR RENEWAL IN 2009. BOTH RUSSELL AND GINNA PROVIDE
POWER TO RG&E's SERVICE AREA THAT SPANS 2,700 SQUARE MILES OVER
NINE COUNTIES, FROM LAKE ONTARIO TO THE PENNSYLVANIA BORDER.
>>
Gary: HYDRO ELECTRIC POWER IS THE CHEAPEST MEANS OF PRODUCING
ELECTRICITY, MAINLY BECAUSE PLANTS DON'T HAVE TO PAY FOR THE
FUEL TO CRANK THE TURBINES. THAT'S THE WATER. HOWEVER, NATIONALLY,
COAL-BURNING PLANTS ARE STILL THE MOST POPULAR MEANS OF PRODUCING
ELECTRICITY. NEWSSOURCE 13's JANE FLASCH SHOWS US HOW THE RUSSELL
COAL STATION PROVIDES US WITH NEEDED ENERGY.
>>
Jane: GRANULES OF COAL ARE CARRIED BY CONVEYOR AND PULVERIZED
INTO A FINE POWDER, WHICH FUELS A FIREBALL BURNING AT 2,500
DEGREES. IT TAKES 100 TONS OF COAL AN HOUR TO TURN WATER FROM
LAKE ONTARIO INTO STEAM, WHICH MOVES TURBINES AT 3,600 REVOLUTIONS
PER MINUTE TO GENERATE THE ELECTRICITY THAT POWERS ROCHESTER.
>>
MOST OF THE COUNTRY GETS MOST OF ITS ELECTRICITY FROM COAL-BURNING
POWER PLANTS, STILL THE MOST POPULAR FUEL SOURCE, MOST DEPENDABLE
FUEL SOURCE.
>>
Jane: THE TECHNOLOGY THAT CREATES ELECTRICITY HASN'T CHANGED
MUCH SINCE ROCHESTER'S RUSSELL STATION WAS BUILT IN 1947. MANAGING
IT HAS. THIS IS THE NERVE CENTER WHERE COMPUTERS NOT ONLY MONITOR
THE EQUIPMENT BUT ALLOW TECHNICIANS TO CHANGE OPERATIONS WITHOUT
EVER LEAVING THE ROOM.
>>
IF THE UNIT IS REQUIRED TO PROVIDE MORE COAL BECAUSE OF MORE
OUTPUT REQUIRED ON THE UNIT, THEN THEY CAN ADJUST AN INCREASED
FLOW OF COAL TO THE GRINDING EQUIPMENT HERE.
>> Jane: SO IT'S ACTUALLY JUST A TOUCH OF THE SCREEN.
>>
IT'S A TOUCH OF THE SCREEN HERE CAN MAKE ANY ADJUSTMENT REQUIRED
TO THE UNIT.
>>
Jane: COMPUTER TECHNOLOGY AIDS RUSSELL STATION IN BEING A GOOD
ENVIRONMENTAL NEIGHBOR TO LAKE ONTARIO AND THE SURROUNDING COMMUNITY.
>>
THIS IS NOT BAD. I HAVEN'T BEEN HERE THAT LONG. I'VE BEEN HERE,
OH, ABOUT TEN YEARS. IT KEEPS THE WHOLE AREA CLEAN AND EVERYTHING.
>>
Jane: A QUARTER OF ROCHESTER'S ELECTRICITY IS GENERATED HERE,
ANOTHER 50% AT THE GINNA NUCLEAR POWER PLANT. BETWEEN THE TWO,
ROCHESTER POWER AND ELECTRIC CAN PRODUCE ITS OWN POWER CHEAPER
THAN IT CAN BUY IT ON THE OPEN MARKET, AND THAT PROTECTS ALL
OF US FROM THE VOLATILITY THAT HAS LED TO BLACKOUTS IN CALIFORNIA
AND SURGING PRICES ELSEWHERE. YET NEW YORK STATE CAN NO LONGER
TAKE POWER SUPPLIES FOR GRANTED.
>>
THE FOLKS THAT RUN THIS ELECTRICITY MARKET HAVE ESTIMATED THAT
WE NEED IN NEW YORK STATE THE EQUIVALENT OF ABOUT 19 GINNA PLANTS
IN THE NEXT FIVE YEARS. YOU KNOW, HOW MANY ARE CURRENTLY UNDER
CONSTRUCTION? ONE.
>>
Jane: THE ANSWER MAY LIE IN WHAT'S CALLED FUEL DIVERSITY, A
PLAN WHERE ALTERNATIVE SOURCES OF POWER, CONSERVATION, COAL
AND NUCLEAR ALL HAVE A PLACE. JANE FLASCH, NEWSSOURCE 13.
>>
Gary: JUST FOR REFERENCE, WHEN DESCRIBING A KILOWATT, YOU HAVE
TO IMAGINE TEN 100-WATT LIGHT BULBS BURNING FOR ONE HOUR. NOW
JOINING ME IN STUDIO TO DISCUSS THEIR ENERGY SUPPLY ARE MIKE
POWER, APPROPRIATELY NAMED SPOKESMAN FOR ROCHESTER GAS AND ELECTRIC,
AND DEMOCRATIC ASSEMBLY MAN PAUL TONKO. HE IS THE CHAIRMAN OF
THE ASSEMBLY'S ENERGY COMMITTEE. THEY'RE VERY INTO THIS SUBJECT
RIGHT NOW, AND HE CAME ALL THE WAY FROM ALBANY TO JOIN US TODAY.
WE DID HAVE A REPRESENTATIVE FROM THE STATE SENATE ENERGY COMMITTEE
BUT HIS SCHEDULE OVERLAPPED, PREVENTED THEIR ATTENDANCE THIS
WEEK, BUT WE'LL HAVE A STATE SENATE PARTICIPATION NEXT WEEK.
GENTLEMEN, THANK YOU FOR JOINING US. SENATOR TONKO, THANK YOU
VERY MUCH. THANK YOU FOR COMING ALL THE WAY IN. THIS IS A SUBJECT
I KNOW YOU'RE INTENSELY INVOLVED IN, AND THERE'S A LOT GOING
ON NOW. I KNOW THERE'S A LOT OF POLITICS IN THIS ENERGY DISCUSSION
THAT WE HAVE TO HAVE. BUT LET'S PUT THAT ON HOLD FOR A SECOND
AND LET'S TALK IN THE IMMEDIATE IN THIS AREA AND, MIKE, I WANT
TO START WITH YOU. RG&E IS SAYING WE'RE FINE FOR POWER, THAT
THIS AREA IS SOLID. WE'RE NOT GOING TO HAVE ANY CALIFORNIA TYPE
SITUATION. WHY?
>>
PRIMARILY BECAUSE WE OWN OUR OWN POWER PLANT. THE STATE REACHED
INDIVIDUAL SETTLEMENTS TOWARD A RESTRUCTURED ELECTRIC UTILITY
INDUSTRY SEVERAL YEARS AGO, AND IN OURS WE WANTED TO RETAIN
OUR OWN POWER PLANTS, AND WE WERE SUCCESSFUL IN PERSUADING THAT
WAS, YOU KNOW, THE RIGHT WAY TO GO. SO WE'RE ABLE TO SUPPLY
ALL OF OUR CUSTOMER NEEDS ON MOST DAYS, NOT ALL DAYS BUT ON
MOST DAYS, WITH THE POWER PLANTS THAT WE OWN, AND AS THINGS
HAVE TURNED OUT, THAT POWER IS CHEAPER COMING OUT OF THOSE PLANTS
FOR OUR CONSUMERS THAN THE POWER ON THE OPEN MARKETPLACE, WHICH
HAS ALLOWED US, OVER THE LAST FIVE YEARS, TO REDUCE ELECTRIC
RATES GRADUALLY.
>>
Gary: OKAY. SO WE'RE AT 95 DEGREES FOR THE MONTH OF AUGUST DAY
IN AND DAY OUT. WE'RE STILL GOING TO HAVE POWER?
>>
YES, THAT'S RIGHT. WE MAY HAVE TO GO OUT AND BUY SOME OF THAT
IN THE MARKET, BUT WE PLAN FOR THAT SORT OF THING, AS I'M SURE
CHAIRMAN TONKO'S FAMILIAR WITH THE LONG-TERM ENERGY MARKET PLACES
AS WELL AS THE DAILY SPOT MARKETPLACE. YOU KNOW, WE OWN POWER
PLANTS AND WE SIGN LONG-TERM CONTRACTS TO KEEP THE DOWNWARD
PRESSURE ON PRICES.
>>
Gary: I AM VERY MUCH TAKEN WHEN LOOKING AT SOME OF THE ISSUES
HERE, CHAIRMAN TONKO, THAT WHAT Mr. POWER HAS JUST SAID IS THAT
WE'RE KIND OF A UNIQUE AREA IN THE FACT THAT WE OWN THE MEANS
OF PRODUCTION, AT LEAST OUR UTILITY OWNS THE MEANS OF PRODUCTION.
>>
ABSOLUTELY, AND WHAT'S INTERESTING ABOUT NEW YORK STATE IS,
FIRST, WE HAD SPOKEN BEFORE THE SHOW ABOUT THE LACK OF INFORMATION
OUT THERE AND THE LACK OF PUBLIC EXCHANGE ABOUT A VERY IMPORTANT
TOPIC. THAT'S PRIMARILY DRIVEN, I BELIEVE, BECAUSE THIS WAS
DONE IN A UNIQUE WAY. WE ARE THE ONLY STATE, MAJOR STATE IN
THE COUNTRY TO DEREGULATE OUR ELECTRIC INDUSTRY BEHIND CLOSED
DOORS WITH REGULATOR WORKING OUT SETTLEMENTS WITH EACH OF THE
UTILITIES. IN OTHER STATE CAPITALS, THEY HAVE PUT TOGETHER A
LEGISLATIVELY PRESCRIBED BLUEPRINT THAT WILL ALLOW FOR OPEN
PUBLIC DEBATE ON ISSUES AND GO FORTH WITH DEREGULATION. SO THAT'S
THE FIRST ISSUE THAT -- OR THE FIRST DYNAMIC THAT TELLS US WHY
IT MIGHT BE SOMEWHAT VEILED IN TERMS OF AN ISSUE. BEYOND THAT,
EACH SETTLEMENT WAS PRODUCING DIFFERENT TERMS, LACK OF STANDARDIZATION.
AND WHILE WE SEE HERE THE MOST STABILITY, IN THE ROCHESTER AREA,
WITH THE RG&E CONCEPT AS DESCRIBED BY MIKE, WE WILL FIND THAT
IN SOME PLACES, LIKE METRO NEW YORK, WE'RE AKIN TO CALIFORNIA
FOR HAVING CREATED A SAN DIEGO ON THE HUDSON WHERE YOU DON'T
HAVE LONG-TERM CONTRACTS AND YOU'RE HAVING SPIKES PRODUCED IN
THE MARKET THAT ARE ABSORBED TOTALLY BY THE PUBLIC.
>> Gary: I THINK THIS IS SOMETHING THAT I WANTED TO MAKE VERY
CLEAR IS THAT ROCHESTER AREA IS PROBABLY UNIQUE, MAYBE EVEN
IN NEW YORK STATE, FOR AREAS THAT ACTUALLY HAVE THEIR UTILITY
OWN THE MEANS OF PRODUCTION.
>> WHILE THEIR RATES HAVE BEEN COMING DOWN, AND THAT'S TREMENDOUSLY
GOOD NEWS FOR THEIR CONSUMERS, ON AVERAGE THE STATE HAS SEEN
AN INCREASE, AND WE HAVE, IN RELATIVE TERMS, BECOME EVEN FURTHER
REMOVED FROM THE NATIONAL AVERAGE, WHICH SPELLS DISASTER, I
BELIEVE, FOR OUR BUSINESS COMMUNITY, WHICH RELIES HEAVILY ON
THE COMMODITY OF ENERGY AND ON HOUSEHOLD BUDGETS THAT ARE UNDULY
PRESSURED BY RISING COSTS WHEN IN FACT THE COMMITMENT MADE BY
THE THEN CHAIR OF THE PUBLIC SERVICE COMMISSION WAS THAT EVERYONE
WOULD SEE REDUCED RATES, AND WE'VE GONE FROM 62% ABOVE THE NATIONAL
AVERAGE TO 70% ABOVE THE NATIONAL AVERAGE, AND THE NEWS IS EVEN
WORSE FOR RESIDENTIAL AND COMMERCIAL CUSTOMERS.
>>
Gary: I WANT TO TALK ABOUT THAT, BUT I WANT TO GET TO THE ONE
AREA BEFORE WE GET INTO THAT; AND THAT IS WE JUST HEARD THAT,
LOOKING DOWN EVEN THE NEXT SEVERAL YEARS IN NEW YORK STATE,
WE NEED MORE POWER. WE NEED MORE PLANTS BASICALLY.
>>
RIGHT.
>>
Gary: TO CONTROL OUR OWN FUTURE. NOW, I'VE HEARD ANYTHING FROM
15 TO 19 NUCLEAR POWER PLANTS WILL BE NEEDED IF, YOU KNOW, IF
THE DEMAND COMES UP THERE. MY QUESTION IS THAT, FIRST OF ALL,
DOES RG&E HAVE ANY PLANS FOR ANY OTHER FURTHER PLANT DEVELOPMENT?
AND STATEWIDE, DO WE NEED MORE? DO WE NEED THESE PLANTS AND
IS IT GOING TO HAPPEN?
>>
WELL, I DON'T THINK THAT THE PLANTS NEED TO BE NUCLEAR. THEY
CAN BE FROM ANY FUEL SOURCE. MOST OF THE PLANTS IN THE PIPELINE,
AT LEAST ON THE DRAWING BOARD NOW, ARE GAS-FIRED, FIRED BY NATURAL
GAS TO CREATE THE --
>>
Gary: ISN'T THAT THE MOST EXPENSIVE THOUGH?
>>
WELL, IT CERTAINLY IS RIGHT NOW. THE PRICE OF NATURAL GAS WENT
THROUGH THE ROOF LAST WINTER. NO ONE EXPECTS IT REALLY TO GET
BACK TO THE LEVELS IT WAS, YOU KNOW, TWO OR THREE YEARS AGO;
BUT IT'S A CLEANER-BURNING RESOURCE AND IT'S MUCH FASTER TO
BUILD THOSE KIND OF PLANTS THAN IT IS NUCLEAR POWER PLANTS.
>>
Gary: ARE THEY EASIER TO SITE, TOO, FOR PUBLIC RESISTANCE TO
ANYTHING THAT YOU BUILD?
>>
SINCE WE HAVE SITED VERY FEW PLANTS IN THE STATE, IT'S SORT
OF HARD TO SAY, BUT YOU CAN BUILD THEM AND BUILD SMALLER ONES
AND THEY BURN A LITTLE CLEANER SO IT'S THEORETICALLY MORE EASILY
SITED. BUT THE ESTIMATES THAT YOU'VE HEARD, WE NEED 8,600 NEW
MEGAWATTS OF POWER IN THE STATE IN THE NEXT FIVE YEARS. THAT'S
FROM THE FOLKS WHO RUN THE OPEN ELECTRICITY MARKET, IS SOMETHING
THAT EVERYBODY, I THINK CHAIRMAN TONKO WOULD AGREE THAT WE NEED
TO PAY ATTENTION TO. NOT THAT THAT WILL SOLVE IT ALONE; NOT
THAT THAT'S ALL WE SHOULD DO. YOU KNOW, ENERGY CONSERVATION
SHOULD BE PART OF THIS SOLUTION; SO SHOULD ALTERNATIVE FORMS
OF ENERGY AND SO SHOULD NEW CONSTRUCTION. BUT, YOU KNOW, NOBODY'S
PRETENDING THAT ANY ONE OF THOSE WILL SOLVE THE PROBLEM. YOU
KNOW, IT'S GOT TO BE, YOU KNOW, A COMBINATION OF ALL OF THOSE,
AND WHICH WE MAINTAIN A FUEL DIVERSITY IN THE STATE. IT'S NOT
A GOOD IDEA TO RELY ON ONLY ONE TYPE OF POWER PLANT.
>> Gary: WELL, AGAIN I TURN TO THE CHAIRMAN. WHEN I WAS IN ALBANY
COVERING POLITICS, THAT WAS A TIME WHEN THEY MOTHBALLED THE
SHOREHAM NUCLEAR FACILITY IN LONG ISLAND; AND SINCE THAT TIME,
I MEAN, ON ONE HAND I THINK YOU CAN COUNT HOW MANY POWER PLANTS
HAVE BEEN BUILT IN THE STATE.
>>
ABSOLUTELY. AND IT WAS THE SAME SITUATION THAT GRIPPED CALIFORNIA,
AND THEIR CURSE WAS THEIR ECONOMY WAS ROBUST IN TERMS OF 30%
ADDITIONAL NEED OUT THERE THAT WAS GROWING; AND IF WE HAD HAD,
IN THIS STATE, THE SAME SORT OF ROBUST ECONOMY AND GROWTH IN
OUR ECONOMY, WE WOULD BE IN TROUBLE. AND NOW THE CURSE, ESPECIALLY
IN UPSTATE WHERE WE'VE SEEN DEVASTATION WITH THE ECONOMIC RECOVERY,
WHERE WE HAVE VERY, VERY POOR NUMBERS FOR THE ECONOMIC COMEBACK,
WE HAVE BEEN BLESSED -- AND I'LL USE THAT WORD SOMEWHAT FACETIOUSLY
-- THAT, HAD WE HAD THAT ROBUST NATURE TO OUR ECONOMY, WE WOULD
HAVE PROBABLY EXHAUSTED OUR SUPPLY OR COME DANGEROUSLY LOW INTO
THE RESERVE REQUIREMENT. IN THIS TRANSITION PLANT, WHICH WE
HAVE ADOPTED IN THE STATE ASSEMBLY, AND IN EARLIER PLANTS, ESPECIALLY
IN OUR EARLIER PLANS, WE HAD SPOKEN THAT WE SHOULD MOVE INTO
THIS TRANSITION, INTO DEREGULATION CAUTIOUSLY AND INCREMENTALLY,
BECAUSE WE WERE CONCERNED THAT, UNLESS YOU HAVE A SUPPLY QUOTIENT
STRONG ENOUGH TO MAKE COMPETITION WORK, WHEREBY THERE IS A MARKET
CHOICE FOR CONSUMERS, YOU'RE GOING TO BE IN TROUBLE. AND WE
COULD IDENTIFY -- NOT JUST POLITICIANS BUT ALL OF THE PEOPLE,
ALL OF THE PERSPECTIVES IN THE FIELD ARE SAYING YOU HAVE AN
ISLAND LIKE MANHATTAN WITH MILLIONS OF PEOPLE THAT IS TRANSMISSION
CONSTRAINED. THEY NEED TO PRODUCE A GREAT NUMBER OF THEIR --
THE SUPPLY ON THAT ISLAND. AND SO THERE IS THIS INTERRELATIONSHIP
WITH UPSTATE AND DOWNSTATE, AND THERE IS THE TALE OF TWO CITIES,
WHERE UPSTATE YOU WERE SELLING IN SOME CASES LESS CALENDAR YEAR
TO CALENDAR YEAR, AND IN NEW YORK YOU WERE COMING DANGEROUSLY
LOW BECAUSE OF THE ROBUST NATURE OF THEIR ECONOMY. AND SO THE
PROBLEM HERE IS THAT THERE IS THIS INTERRELATIONSHIP. AND SOME
HAVE THEORIZED THAT THE UPSTATE COMMUNITIES, AS PROFESSIONALS
IN THE UTILITY FIELD AND THE ENERGY FIELD, THAT SOMEWHAT OF
A 3 TO 5% INFLATION FACTOR WAS AKIN TO THE WEAKNESS OF THE MARKET,
PRIMARILY IN GREATER NEW YORK CITY.
>>
Gary: I THINK WE SHOULD JUST TAKE A STEP BACK AND LOOK AT WHEN
YOU SAY DEREGULATION. AND I DON'T THINK MANY VIEWERS ARE AWARE
THAT NEW YORK IS GOING INTO A DEREGULATED AREA INASMUCH AS THAT
CONSUMERS, A CERTAIN PERCENTAGE PART OF RG&E CONSUMERS, EVENTUALLY
ALL, AND OTHER UTILITY CUSTOMERS AROUND THE STATE, A CERTAIN
PERCENTAGE AND IN SOME CASES ALL, HAVE THE RIGHT TO OPT TO SHOP
FOR A POWER SUPPLIER. AND BY THIS LAW, SAY IF YOU SHOP FOR ANOTHER
SUPPLIER OF ELECTRICITY, THAT THE NAMES ARE AVAILABLE ON THE
P.S.E. SITE. THAT RG&E, IF YOU WERE AN RG&E CUSTOMER, WOULD
HAVE TO CARRY THE POWER TO YOUR HOUSE. FURTHERMORE, IF YOU EITHER
CONTRACTED OUT FOR A CHEAPER FORM OF POWER, AT LEAST IN THE
MARKETS NOW, RG&E CARRIES IT TO YOUR HOUSE. IF SOMETHING IS
AN EMERGENCY, RG&E WOULD HAVE TO TAKE CARE OF IT. AND IF THERE'S
AN OUTAGE, RG&E WOULD HAVE TO COVER WITH THEIR POWER. THAT EXISTS
RIGHT NOW. YOU MAY WANT TO CALL AND FIND OUT JUST WHAT YOUR
AVAILABILITY IS AND WHETHER OR NOT THE PERCENTAGE INCLUDES YOU.
BUT JUST LET ME GIVE YOU SOME NUMBERS. RIGHT NOW 40,000 OUT
OF RG&E's 350,000 CUSTOMERS ARE USING THIS OPTION. THAT'S ABOUT
22% OF THEIR CUSTOMERS. MY QUESTION IS THAT, WITH ALL THIS DEREGULATION
THAT HAS GONE ON, WE HAVEN'T SEEN -- WELL, IN RG&E's CASE, PRICES
HAVE COME DOWN. I DON'T KNOW IF THAT'S BECAUSE OF DEREGULATION.
>> NO. THAT'S IRRESPECTIVE OF DEREGULATION. I MEAN, THE END
RESULT, I THINK WE ALL AGREE THAT WE WANT TO SEE LOWER PRICES,
THAT THIS DEREGULATION OR REREGULATION OR RESTRUCTURING IS SUPPOSED
TO PRODUCE LOWER PRICES. I THINK WHAT WE ALL CAN FINALLY ADMIT
NOW THAT IT'S GOING TO TAKE LONGER THAN WE THOUGHT. I SORT OF
WISH THERE WAS A WOMAN ON HERE WITH US, CHAIRMAN TONKO, BECAUSE
I THINK YOU CAN -- MAYBE THE WOMEN IN THE AUDIENCE UNDERSTAND
IT. THIS IS SORT OF A BIRTHING PROCESS, YOU KNOW, AND THE BABY
DOESN'T GET BORN ON THE FIRST PUSH AND THE BABY DOESN'T GET
BORN WITHOUT SOME PAIN. AND WHAT WE'RE DOING HERE IS GIVING
BIRTH TO SOMETHING NEW. IT'S PROBABLY NOT AS MUCH FUN CREATING
A RESTRUCTURED ELECTRIC SYSTEM AS IT WAS CREATING A BABY, BUT
WE ARE IN SORT OF A LONG-TERM BIRTHING PROCESS, AND THERE'S
GOING TO BE SOME PAIN. WE'RE SEEING IT NOW. CHAIRMAN TONKO REFERRED
TO SOME OF IT. THERE WILL BE SOME PAIN CONTINUING. HOPEFULLY
WE GET TO A POINT, AT THE END OF THIS GESTATION PERIOD, WHERE
WE HAVE A GOOD RESULT.
>>
WELL, BOTH SCENARIOS THAT MIKE JUST ADDRESSED SOMETIMES UTILIZE
PLANNING. AND IN THIS CASE, THE ADMINISTRATION DID NOT PLAN
WELL, BECAUSE YOU CAN'T WALK AWAY FROM THE ACADEMICS OF THE
TECHNICAL NATURE OF THIS BUSINESS. AS YOU MENTIONED EARLIER,
GARY, POLITICS SHOULD BE SET ASIDE, AND THIS IS A TECHNICAL
MATTER, AND IT DECIDES WHETHER WE'RE GOING TO GROW JOBS AND
KEEP JOBS AND PRODUCE OR ENHANCE THE QUALITY OF LIFE FOR THE
PEOPLE OF THIS STATE. AND WHEN YOU DIDN'T ALLOW FOR THE DEVELOPMENT
OF A MARKET AND YOU CHOSE TO JUST RUSH PELL-MELL INTO COMPETITION,
IN ROCHESTER'S CASE, THEY REMAINED THAT VERTICALLY STACKED INDUSTRY,
AND THAT HAS SERVED THEIR COMMUNITY WELL. THEIR CONSUMERS HAVE
BENEFITTED THAT, WHILE THEY'RE GROWING CHOICE, THEY HAVE THE
LUXURY OF THE OLD WORLD. TAKE THAT AND OVERLAY IT WITH OTHER
UPSTATE COMMUNITIES. YOU DON'T HAVE THAT. YOU HAVE A MISHMASH
OF SETTLEMENTS OUT THERE. YOU HAVE NISEK (phonetic) WITH LONG-TERM
CONTRACTS THAT PROVIDE ADDITIONAL PREDICTABILITY AND STABILITY,
BUT NOW YOU HAVE NIAGARA MOHAWK PARTNERING WITH NATIONAL GRID
AS THE PROPOSED AGENT OUT THERE TO ACQUIRE THEIR SYSTEM, LOOKING
TO CARRY INTO THE FOLD THE SAME SORT OF MARKET PASS-THROUGH
THAT YOU HAVE IN CON-ED TERRITORY, WHICH HAS PROVEN DEVASTATING.
YOU KNOW, THE SUPPLY ISSUES ON THE WEST COAST, SPEAKING TO THE
SUPPLY ISSUES ON THE EAST COAST IN NEW YORK STATE, ARE SOMETHING
THAT, IF NOT ADDRESSED, ARE GOING TO CRIPPLE THE SYSTEM, ESPECIALLY
BECAUSE, IN MANY CASES IN NEW YORK'S GEOGRAPHY AND FOR ITS POPULATION,
THERE IS NOW THIS NEW WORLD WHERE THE CONSUMER ABSORBS THE RISK
AND DOESN'T HAVE THE CHOICE TO GET OUT, AND YOU'VE TAKEN A REGULATED
ELECTRIC UTILITY AND MADE IT DEREGULATED OR UNREGULATED WITHOUT
THE WATCHDOG.
>>
Gary: SO IT WOULD BE ACCURATE TO SAY THE CRITICISM YOU HAVE
OF THIS DEREGULATION PROGRAM RIGHT NOW IS THAT THERE'S JUST
NOT ENOUGH MARKET FOR THE OPTIONS FOR PEOPLE TO SHOP TO GET
--
>>
RIGHT. A GREAT NUMBER OF THE MEGAWATTS, EXACTLY. THE GREAT NUMBER
OF MEGAWATTS IN THE 8,600 COUNT QUOTED BY MIKE WOULD BE PRODUCED,
WOULD BE NEEDED TO MAKE THE PENCIL SHARP FOR THE BOTTOM LINE
BENEFIT THAT WOULD BE DRIVEN THE WAY OF THE CONSUMER.
>>
Gary: OKAY.
>> THE MAYOR OF NEW YORK CITY AND THE UTILITIES IN NEW YORK
CHALLENGED THE PUBLIC SERVICE COMMISSION TO HOLD OFF UNTIL THE
SYSTEM IS BETTER PREPARED TO DEAL WITH IT. WE HAVE RUSHED INTO
THIS SITUATION, AND WE HAVE PROBABLY THE BEST WORLD HERE IN
ROCHESTER WHERE THEY HAVE TAKEN CAUTION, PRECAUTION AND ALLOWED
FOR SOME SORT OF AN ADJUSTMENT PERIOD, EXACTLY WHAT WAS SPOKEN
TO IN THE INCREMENTAL SIDE, THE INCREMENTAL DEMANDS OF OUR PLAN
AND STATE ASSEMBLY.
>>
Gary: WHEN I WAS REVIEWING WHAT'S GOING ON WITH THE STATE AND
TRYING TO GET A THUMBNAIL SKETCH IN MY OWN MIND AS WHAT EXACTLY
IS HAPPENING OUT THERE, ONE OF THE THINGS THAT I GOT FROM THIS
DEREGULATION TALK IS I LOOK AT RG&E, AND I SAY, WELL, HERE IS
A COMPANY WHO DECIDED TO SAY WE'RE GOING TO OWN OUR OWN POWER
PLANT. WE'RE GOING TO OPERATE OUR OWN POWER PLANT, AND THAT
GIVES US A COUPLE THINGS: LONG-TERM STABILITY AND, IF WE DO
SOME ONE-SHOT HITS WHEN WE FIX THE PLANTS UP AND WE PUT MONEY
IN OUR INFRASTRUCTURE, WE CAN CONTROL OUR OWN COSTS. POWER SUPPLY
IS NOT GOING TO BE A PROBLEM. SO THAT'S THEIR PHILOSOPHY THAT
THEY OWN THE PLANT AND WE'RE GOING TO GET SOME OF THE BENEFITS
OF THAT. NOW, IF YOU DEREGULATE THAT AND ALLOW "X" AMOUNT OF
YOUR CUSTOMERS TO GET THEIR POWERS FROM SOMEPLACE ELSE, DOESN'T
THAT FURTHER ERODE THIS WHOLE PHILOSOPHY OF RG&E? ISN'T IT GOING
TO MAKE IT HARD FOR YOU THAT IF YOU HAVE TO DO A PASS-THROUGH
FOR SOME OTHER POWER TO SUPPORT YOUR OWN POWER PLANTS, AND KIND
OF THE TWO OF THEM SEEM TO BE FLYING IN THE FACE.
>>
WELL, IT DOES. YOU HAVE TO REMEMBER THOSE TWO PLANTS CAN STILL
SELL INTO THIS MARKETPLACE AND DO, AT THE TIMES WHEN WE HAVE
EXCESS CAPACITY AND WE SELL INTO THE MARKETPLACE, YOU KNOW,
MAKE SOME MONEY, AND THAT'S ONE OF THE THINGS THAT HAS ALLOWED
US TO REDUCE RATES FOR CUSTOMERS FOR THE LAST FIVE YEARS. AND
AS LONG AS IT'S THE STATE POLICY TO ENCOURAGE COMPETITION TO
SEPARATE UTILITIES FROM GENERATION, OVER A LONG TRANSITIONAL
PERIOD, YOU KNOW, AT SOME POINT WE'LL FACE THAT QUESTION THAT
IS JUST HOW LONG THIS TRANSITION WILL BE. BUT, YOU KNOW, WE
DON'T PRETEND TO BE IN THE GENERATION BUSINESS FOREVER. BUT
WE DO THINK IT MAKES GOOD SENSE TO HOLD ONTO THOSE PLANTS DURING
THIS LONG TRANSITION PERIOD, AND SO FAR IT HAS PROTECTED CUSTOMERS.
>> Gary: OKAY. WELL, THE GINNA NUCLEAR FACILITY IS UP FOR RELICENSING
IN 2009. I THINK A LOT OF PEOPLE WANT TO ASK, THAT'S HALF OF
OUR POWER IN THIS AREA. IS RG&E GOING TO KEEP OWNING IT AND
SELLING IT TO US OR DOES SOMEBODY ELSE COME IN AND BUY IT AND
SELL IT TO WHOEVER THEY WANT TO SELL IT TO?
>>
YOU KNOW THE WORLD IS CHANGING IN OUR BUSINESS IN THE LAST FIVE
YEARS FASTER THAN I THINK IT DID IN THE PREVIOUS 50, DON'T YOU?
EVERYBODY USED TO MAKE PREDICTIONS BACK IN THE OLD DAYS, INCLUDING
US, AND EVERYBODY WAS WRONG. SO TO PREDICT, YOU KNOW, THE FUTURE
OF THE POWER PLANT, YOU KNOW, TEN YEARS FROM NOW IS PRETTY IMPOSSIBLE
TO DO. BUT WE ARE GOING TO GET OUR PLACE IN LINE WITH THE N.R.C.
TO PROTECT OUR OPTION OF RELICENSING THE PLANT. WE MAY IN FACT
TAKE THAT COURSE. IT WILL DEPEND ON THE ECONOMICS AND WHETHER
IT MAKES SENSE FOR THE CONSUMER AND WHETHER IT MAKES ECONOMIC
SENSE FOR US. BUT WE'RE GOING TO GET OUR PLACE IN LINE. WE'RE
GOING TO PREPARE AN APPLICATION, AND WE'LL JUST WATCH DEVELOPMENTS
AS TIME GOES ON.
>>
Gary: CAN WE TALK ABOUT COSTS?
>>
SURE.
>>I WAS JUST GOING TO MENTION THAT COMMENT, GARY, THAT ENGINEERING
DEEPLY SUPPORTS PLANTS MAKING CERTAIN THAT NOT ONLY YOU HAVE
TO SUPPLY NUMBERS YOU NEED BUT STRATEGIC LOCATIONS, DIVERSIFICATION
OF FUEL TYPES AND TRANSMISSION. IT'S NO GOOD IF YOU HAVE THE
PRODUCT AND CAN'T DELIVER IT TO THE HOME PLACE OR WORKPLACE.
THESE ARE THINGS THAT SHOULD HAVE BEEN DISCUSSED HOPEFULLY IN
OPEN PUBLIC DIALOGUE IN A NON-PARTISAN NATURE AND TO PUT THINGS
TOGETHER. WE JUST PARTICIPATED. I JUST PARTICIPATED IN A SUMMIT,
CO-HOSTED BY OUR TWO UNITED STATES SENATORS, AT THREE TIMES
SQUARE AT THE REUTER'S BUILDING. AND THERE, A GREAT NUMBER OF
PEOPLE, 40 OR SO, SHARED THEIR PERSPECTIVE FROM EVERY ANGLE
OF THE DISCUSSION. AND PEOPLE PUT OUT ON THE TABLE CONCERNS,
POTENTIAL SOLUTIONS, HOW THINGS ARE WORKING, HOW THINGS AREN'T
WORKING. THIS COMMODITY IS SO ESSENTIAL TO THE FUTURE OF NEW
YORK FROM EVERY PERSPECTIVE, IT SHOULD BE DISCUSSED AT A SUMMIT
IN OPEN DIALOGUE. THE SPEAKER AND MYSELF AS CHAIR HAD ASKED
THE GOVERNOR AND SENATOR BRUNO, THE LEADER OF THE SENATE, TO
DO THE SAME THING BACK IN THE FALL OF 2000. THAT WAS REJECTED
AS A NOTION. BUT FINALLY THE OPEN PUBLIC, NON-PARTISAN ENERGY
DIALOGUE WAS BEING CONDUCTED FOR A STATEWIDE PERSPECTIVE IN
DOWNTOWN MANHATTAN, AND WE GOT TO HEAR ABOUT THE DIFFERENT TALES
OF WOE, AND PEOPLE ARE WORKING ON IT. BUT THE PLANNING IS ESSENTIAL,
AND THEN THE GOVERNOR UNDERSTATES. INSTEAD OF NOT EXERCISING
LEADERSHIP IN PRODUCING THE PLANNING THAT WE NEED, AT THE SAME
TIME THEY'RE SAYING CLEAN UP YOUR EMISSIONS, AND THEY UNDERSTATE
THE IMPACT THAT THAT CLEANUP WOULD COST. SO AS WE'RE WORRYING
ABOUT AN ENERGY CRISIS AND THE DELTA OVER AND ABOVE THE NATIONAL
AVERAGE WHICH WE REPRESENT BECOMES WORSENED AND OUR PLANNING
ISN'T THERE. SO IT'S THE WORST OF ALL POSSIBLE WORLDS COMING
DOWN UPON US. AND THEN WE'LL RUN AROUND AND SAY, THROUGH DISTRACTION,
THAT WE'RE NOT CALIFORNIA.
>> Gary: RIGHT.
>>
WELL, WE COULD BE WORSE.
>>
Gary: WE ONLY HAVE A COUPLE MINUTES LEFT. I WANTED TO RECOGNIZE
THE FACT THAT NEW YORK'S POWER SUPPLY IS MORE EXPENSIVE THAN
-- IT'S WAY ABOVE THE NATIONAL AVERAGE. RG&E's IS BELOW THE
STATE AVERAGE, BUT STILL ABOVE THE NATIONAL AVERAGE. BUT I THINK
IT -- I'M TRYING TO GET MY ARMS AROUND THIS AND TO MAKE IT CLEAR
TO EVERYBODY THAT THERE'S SO MANY DIFFERENT FACTORS AVAILABLE
BECAUSE OF IT. FOR EXAMPLE, WE HAVE 20% OF THE RG&E BILL IS
TAXES, SO IF YOU'RE A HOME, YOU GET 20% OF YOUR BILL. WHEN YOU
GET IT, IT'S LARGELY MADE UP OF TAXES.
>>
IT'S BEEN REDUCED THOUGH. I HAVE TO POINT THAT OUT.
>>
Gary: TRUE ENOUGH, BUT STILL WE ARE VERY HIGH TAXED. WE HAVE
PROPERTY TAXES THAT ARE THREE TIMES THE NATIONAL AVERAGE. SO
I MEAN THERE'S A LOT OF FACTORS THAT GO INTO THE PRICE, NOT
JUST BECAUSE IT'S A SIMPLE FACT THAT AN ENERGY WATT PRODUCED
IN TEXAS WILL EQUAL A WATT PRODUCED IN NEW YORK. I THINK WHEN
YOU FACTOR EVERYTHING IN, THERE'S A LOT OF VARIABLES.
>> BUT EVEN WHEN YOU LOOK AT THE CHANGES SINCE '95, SOME OF
THESE COSTS HAVE BEEN IMBEDDED IN THE SYSTEM. SINCE '95, WE'VE
GONE FURTHER OVER AND ABOVE THE NATIONAL AVERAGE. SO WHAT HAS
CHANGED? WE NEED TO LOOK AT WHAT OTHER STATES HAVE DONE, AND
WE'RE NOT PRESCRIBING ANY ONE STATE'S TERMS ONTO NEW YORK. BUT
LOOK AT WHAT THEY'VE DONE. THEY DEALT WITH IMBEDDED COSTS. THEY
LOOKED AT STRANDED COSTS AS AN ISSUE AND DETERMINED THAT, TO
GET REDUCTIONS FOR SOME COMPANIES, THEY WERE GOING TO HAVE TO
DIG DEEP INTO THAT NUMBER. WE DIDN'T DO THAT KIND OF ANALYTICAL
OR THOUGHTFUL PROCESS FOR CONSUMERS. THERE ARE COST OVERRUNS
FOR A NUMBER OF PLANTS THAT WERE BUILT, BUT FOR US TO JUST ACKNOWLEDGE
THAT THE WORLD CONTINUES AS IT IS IS WRONG.
>>
Gary: WE CAN'T CONTINUE RIGHT NOW BECAUSE WE ARE OUT OF TIME
FOR THIS SEGMENT, BUT THAT'S ALL THE TIME WE HAVE FOR THIS PARTICULAR
SEGMENT. AS YOU CAN SEE, THERE'S A LOT TO TALK ABOUT. WE'LL
BE TALKING AGAIN NEXT WEEK, AND WE'LL HAVE A MEMBER OF THE SENATES
ENERGY COMMITTEE HERE TO TALK A LITTLE MORE LONG-TERM ABOUT
NEW YORK. I MEAN, WHERE ARE YOUR POWERS COMING FROM? WHAT'S
GOING TO HAVE TO HAPPEN? AS YOU JUST HEARD TODAY, DO WE NEED
TO HAVE A MORE OPEN DIALOGUE ABOUT THE FUTURE OF NEW YORK STATE'S
POWER? SO JOIN US NEXT THURSDAY NIGHT. NOW, IN A MOMENT WE'LL
BE JOINED BY MATT CUMMINGS WHO'S BEEN TRACKING THESE ISSUES,
AND HE'S GOING TO GIVE US A LITTLE UPDATE ABOUT WHAT WE CAN
EXPECT NEXT WEEK.
(Music)
IF
YOU'D LIKE MORE INFORMATION, YOU CAN VISIT THE FOLLOWING WEB
SITE: rge.com, dps.state.ny.us, AND eany.org. (Music) WITH ME
NOW IS "NEED TO KNOW'S" MATT CUMMINGS WITH A LOOK AHEAD TO PART
II OF OUR COLLABORATIVE SERIES ON ROCHESTER'S ENERGY SUPPLY.
MATT, WHAT'S UP FOR NEXT WEEK?
>> Matt: WELL, GARY, I THINK WE'RE GOING TO START OFF BY PROFILING
THE GINNA NUCLEAR POWER PLANT. JANE FLASCH FROM NEWSSOURCE 13
WILL BE BACK WITH US TO PROFILE HOW THAT PLANT OPERATES, WHAT
SORT OF COMMUNITY IMPACT IT HAS. AS WE'VE ALREADY HEARD, 50%
OF ROCHESTER'S POWER COMES FROM THE GINNA NUCLEAR PLANT, CREATES
A DIVERSE ISSUE THAT WE NEED TO COVER NEXT WEEK; MORE SPECIFICALLY
THE LICENSE RENEWAL IN 2009. THAT'S REALLY THE TARGET DATE THAT
ROCHESTERIANS NEED TO KEEP THEIR EYE ON.
>>
Gary: IT SEEMS THAT THE STATE IS HEADING TOWARDS AN AREA WHERE
UTILITIES ARE BEING URGED TO BECOME LESS POWER SUPPLIERS AND
MORE JUST THE PIPES AND THE WIRES TO CARRY THE POWER.
>>
Matt: AND LIKE YOU SAID, IT IS A POLITICAL ISSUE. WE WILL BE
JOINED BY A NEW YORK STATE ENERGY COMMITTEE REPRESENTATIVE,
ALONG WITH Mr. TONKO AND Mr. POWER AGAIN TO HAVE A ROUND-TABLE
DISCUSSION, INCLUDING BOTH POLITICAL PARTIES.
>>
Gary: THANK YOU, MATT. MATT, THANKS FOR YOUR PREVIEW, AND ONCE
AGAIN WE'LL HAVE ALL THAT FOR NEXT WEEK'S EDITION OF "NEED TO
KNOW." THANKS FOR JOINING US.
(Music)