CITIZEN POWER ALLIANCE

Chesapeake Energy Corp.’s bid to tap new sources of natural gas in New York state may be quashed by Governor David Paterson’s political troubles.

Paterson is the most prominent state proponent of drilling in the Marcellus Shale, a formation extending from West Virginia to New York that has helped spur a boom in U.S. shale-gas production. Chesapeake, the second-biggest producer of natural gas in the U.S., is one of three companies that have filed a combined 58 applications for drilling permits in the state.

Paterson’s Department of Environmental Conservation is completing rules for extracting the gas. Applicants had expected permits to be approved this year, said Dave Palmerton, an industry consultant. That was before the governor became the target of probes into allegations that he improperly contacted a woman who had accused an aide of domestic abuse and that he sought free tickets to baseball’s World Series.

“Up until recently, he was in a position to push Marcellus drilling in New York state,” said Palmerton, who is based in Syracuse. “Given the political pressures right now, I’m very concerned the DEC may be pressed to hold this up until after the election, or delay it for some indefinite period of time.”

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No taxes on smart-grid grants

Projects to upgrade the nation’s electric system recently got a boost from the Internal Revenue Service, which ruled that corporations won’t have to pay taxes on Smart Grid Investment Grants.

The economic stimulus bill provided $3.4 billion for the program, which will help businesses, utilities and local governments adopt technologies that will save energy, increase efficiency and foster the growth of renewable energy sources such as wind and solar. The IRS decision will enable the U.S. Department of Energy to complete grant agreements with businesses, according to the department.

“This is an important step toward reaching the administration’s goal of a more reliable and efficient electrical grid,” said Matt Rogers, senior adviser to Secretary of Energy Steven Chu. “As these projects move forward, they will create thousands of new jobs and bring smart-grid technologies to communities around the nation.”

Clean-energy firms got $5B from stimulus

Small businesses in the clean energy and environmental management sectors have received nearly $5.4 billion in funding so far from the federal economic stimulus bill.

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(Listen to the radio program on wind turbines in Lake Ontario)

If there is a once-upon-a-time to this story, it would have been in the Town of Sanford in the fall of 2007.

Residents there had been farming the land for generations without much thought to what lies beneath it. That all changed when landmen began showing up with unsettling frequency, urging residents to lease their mineral rights.

Dewey Decker, town supervisor and owner of an 1,150-acre farm, decided to look a little deeper. He attended town meetings across the border in Pennsylvania, where he began hearing the phrase "Marcellus Shale."

Two years later, those words have become part of everyday conversations, Decker and some of his neighbors have become millionaires, and New York has become embroiled in a debate over how to handle the natural gas riches underneath the southern part of the state.

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New York State’s Public Service Commission has approved a $279 million funding package for small-scale renewable energy projects over the next five years.

The plan approved yesterday will help “thousands” of homeowners and businesses to install solar panels, fuel cells, wind turbines and other renewable energy devices, the Commission said.

The funding announcement came on the same day that the state’s solar industry revealed that PV installation rates have slumped in the months since the Commission’s decision to cut back on rebates.

The $279 million funding package will come from the state’s Renewable Portfolio Standard initiative.

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Outsider? I've lived and worked in the Southern Tier since 1975. We've raised children and grandchildren here. My "agenda," in the words of the Feb. 26 guest viewpoint is to:

Drink my well water safely.

* Breathe unpolluted air.
* Enjoy my rural area.
* Protect local roads from heavy industry.
* Support farmers.

Mistreated for years, farmers need adequate price supports, fewer middle men, local customers, etc. Ten or 15 years after hydro-fracturing, areas where it is used could be worse off than before.

People who have leased around our 9.9 acres are not poor farmers. A retired IBMer sold to the gas company. Leasing neighbors have several houses, horses, a tack shop and earth-moving equipment. The town doctor leased. Absentee landlords own many leases. "Outsiders"? The Department of Housing and Urban Development, the Federal Housing Administration and many banks and credit unions won't mortgage gas- leased property. Your right to use your land any way you see fit ends when it affects your neighbors, e.g., you must have a proper septic system.

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New York State Electric and Gas is in the middle of a construction project in Tompkins and Cortland counties that will replace and upgrade aging utility poles and lines along a 15-mile strip. Work is expected to be completed by the middle of this year.

The contractor, Harlan Electric, has been using cranes and helicopters to erect new poles and string lines substantially taller than the existing ones, to increase capacity and reduce the Ithaca area's heavy reliance on electricity from the AES Cayuga power plant on Cayuga Lake in Lansing.

The rebuilt lines will stretch along the existing path from a switching station in Lapeer, along Route 38 south of Dryden, to the Etna Substation across from NYSEG's regional office building on Route 13.

Both the Lapeer switching station and the Etna Substation are also being rebuilt to accommodate the new transmission line, according to NYSEG spokesman Clayton Ellis.

NYSEG is complying with a state order to increase the reliability of electricity in areas where most electricity comes from a local plant.

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PRESS RELEASE MARCH 19, 2010

The Wayne County Board of Supervisors will be holding a Public Hearing on Wednesday, March 31st at 7:00 p.m. at the Wayne County Court House, 26 Church Street, Lyons, NY, to solicit input on the request for proposals the New York State Power Authority (NYPA) has issued to provide electric capacity and energy from a Great Lakes offshore wind generating project. NYPA considers this project consistent with Governor Paterson’s goal to substantially reduce New York State’s dependence on fossil fuel for electric generation and to expand industrial economic development opportunities in Upstate New York.

NYPA is a corporate municipal instrumentality and political subdivision of the State of New York that provides low-cost electricity to governmental agencies, municipal electric systems, rural electric cooperatives, manufacturers and to investor-owned utilities for resale without profit to retail customers across New York State.
On December 1, 2009 NYPA released a request for proposals for the development of offshore wind power projects in Lake Erie and Lake Ontario. The size and exact location for these projects is yet to be determined. A map released by NYPA depicts portions of the Lake Ontario shoreline in Wayne County as potential locations for offshore wind farms. NYPA describes the project as “a utility-scale offshore wind farm between 120 mw and 500 mw total capacity.” The due date for proposals is June 1, 2010.

A resolution opposing the project was tabled at the March 16th Board of Supervisors meeting in favor of obtaining input from the public prior to Board action. Wayne County residents are invited to attend a public hearing to provide comments concerning the NYPA Great Lakes Offshore Wind Project. The public hearing will be held on March 31, 2010 at 7 PM at the Wayne County Courthouse, 26 Church Street, Lyons, NY.

Chairman Hoffman said, “It is our hope that residents with opinions pertaining to this proposed wind turbine project will attend the public hearing on March 31, 2010 and share their concerns with the Board of Supervisors.”

Wind energy is seen as a vital piece of the renewable-energy movement.

But it may be contributing to the pollution problem along the Front Range, according to a draft report sponsored by members of Colorado’s natural gas industry.

The report says that the greatly increased use of wind energy in the past few years may have raised pollution levels from some coal-fueled power plants owned by Xcel Energy Inc. That’s because the frequent change in output asked of power plants, in response to the availability of wind and solar power, adds to pollution, the report says.

If the report’s conclusions are true, then that challenges beliefs about the connection between renewable wind power and improved air quality.

ALBANY — A new “net-metering” law for New York has been signed by Gov. David Paterson, Assemblyman Kevin Cahill, D-Kingston, announced Sunday.

Cahill, chairman of the Assembly Energy Committee and a sponsor of the bill, said the law could save businesses, not-for-profits, local governments and schools money on utility bills, create jobs and boost the use of renewable energy.

“This amendment opens up further opportunities for all New Yorkers to take advantage of solar and wind power to lower costs and sell their excess clean energy back to their utility, creating one of the most expansive laws in the country.”

Without this change, New York state and its businesses, non-profits, municipalities, schools and other commercial entities would be unable to realize the intent of the state’s net-metering laws, he said. Under the new statute, non-residential customers will be able to install renewable energy systems as large as two megawatts, opening up a largely untapped market for manufacturers and installers.

Horseheads, N.Y. — The legal challenge to the Schlumberger project in Horseheads has been dismissed.

New York State Supreme Court Justice Judith O’Shea, who heard arguments in the case in early February in her district court in Elmira, dismissed the lawsuit in a 26-page written ruling issued this week.

The lawsuit was filed by a group of area residents called People for a Healthy Environment, represented by Ithaca attorney Helen Slottje.

The lawsuit alleged the review of the Schlumberger project by Village of Horseheads officials was conducted improperly and with insufficient information about the company’s plans, and that their approval of the project was unlawful.

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Companies and investors are increasingly scouring the country for shales rich in oil and natural gas liquids rather than the gas-rich shales that had been the focus of a series of recent deals.

Two of the largest independents -- Chesapeake Energy (CHK.N) and Anadarko Petroleum Corp (APC.N) -- are near the front of the pack of companies in the land grab.

Companies are looking for acreage in these shales as their positions in previous hot spots like the Marcellus Shale -- which spans parts of Pennsylvania, West Virginia, and New York -- have started to pay off.

Indeed, Chesapeake Energy -- one of the nation's largest natural gas producers -- said last month that it is aggressively putting together acreage in six new oil plays [ID:nN18220467].

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National Grid could raise the delivery charges for ratepayers for three years if the Public Service Commission approves a new rate plan.

But the utility submitted a plan that would lower another charge and, it said, keep the charges at the same rate they are now for most rate-payers.

"Our current rate plan, which was a 10-year plan, will end in 2011, so it is getting close to time anyway," National Grid spokesman Stephen F. Brady said. "And the current plan does not allow us to completely recover the cost we're seeing today to operate the business."

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ENERGY EAST CORPORATION v. U.S.

ENERGY EAST CORPORATION, Plaintiff,
v.
THE UNITED STATES, Defendant.

No. 07-812T.

United States Court of Federal Claims.

March 11, 2010.

Invoking § 6621(d), Plaintiff seeks a net rate of zero interest on its 1999 deficiency to the extent that its underpayment was outstanding and overlapped with the 1995-1997 overpayments made by CMP and RG&E. As a predicate for this recovery, Plaintiff claims that Energy East and its subsidiaries were the "same taxpayer" within the meaning of § 6621(d) because they later became members of a consolidated group, which enabled them to file a consolidated return for income tax purposes and made them jointly and severally liable for each other=s tax liabilities.

Because these subsidiaries were separate and different taxpayers wholly unrelated to Energy East both at the time the underpayment was due and the overpayments were made, the Court concludes they were not the "same taxpayer" as Energy East within the meaning of § 6621(d). As such, interest netting is not available, and the Court enters summary judgment for Defendant.

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ALBANY, NY — Legislation that will clear the way for 24 municipalities in St. Lawrence and Franklin counties to develop a municipal power system that will save residents and businesses money on their energy bills has passed the New York State Senate. Sponsored by Sen. Darrel J. Aubertine, the legislation (S.2813B) establishes the North Country Power Authority to finance and operate the system.

“For more than a decade now the Alliance for Municipal Power has been working to establish a municipal power system to provide much needed low-cost power,” said Sen. Aubertine, who is the ranking majority member of the Senate Energy and Telecommunications Committee. “This legislation gives these municipalities the ability to finance this project and ensure the accountability standards are there to best serve the public. The aim is to reduce energy costs for homeowners, renters and businesses, which will help families make ends meet and create jobs.”

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In the past, personal property tax rates in Ohio have caused more than one potential employer to think twice about the Buckeye State. Trying to compensate for those taxes by using abatements locally to level the playing field is an option for companies like Iberdrola Renewables.

One of the proposals, Senate Bill 232, would replace property taxes with a flat fee amounting to around $12,000 per wind turbine. That money would be divided among local taxing bodies according to the current rates.

The trade-off from the wind company would be an agreement to repair roads damaged by construction and to train and equip emergency responders. Litchfield pointed out that his company was already going to do both.

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On Earth Day 2009, New York Power Authority (NYPA) President Richie Kessel unveiled plans to industrialize Lake Ontario and Lake Erie with near shore wind turbines clustered in 120MW to 500MW arrays in waters 150 feet deep, or less.

Some arrays would consist of 500 turbines towering 450'from the lake levels. NYPAs proposal was unveiled without input from the shoreline communities or businesses that will be the victims. Currently, Jefferson, Oswego, Cayuga and Wayne Counties are working towards unilateral opposition to this NYPA project in Lake Ontario.

The reasons of objection to NYPA's plans for citing 1000-plus turbines in the Great Lakes are thus:

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Oswego, NY -- It appears no wind turbines will be built in Lake Ontario off Oswego and Jefferson counties. New York Power Authority President Richard M. Kessel said Thursday if Oswego and Jefferson counties don’t want the project, it won’t be built there.

And they don’t. Lawmakers — and residents — from both counties have noted their opposition to such a project. “We don’t want to go where the project isn’t wanted,” Kessel said. “Whether their reasons are legitimate or not, we respect them, but we are not going to go there. We’ll focus on other areas.”

The power authority proposed putting wind turbines off shore in Lake Ontario or Lake Erie. It was considering an area between Richland and Cape Vincent on Lake Ontario. Residents have expressed concern placing the turbines in the water would hurt tourism and the economies of both counties by cutting off boats and fishermen from the area where the turbines are located.

Kessel said Oswego and Jefferson counties have “lost an opportunity for jobs” from the wind project. “They are going to be turning thousands of jobs away,” he said. “This project was going to make Upstate a center for the manufacture of wind components for the project. There are enough communities and counties who want the project so we shouldn’t waste our time here.”

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U.S. Energy Information Administration Forecast Shows Abundant Natural Gas Supply & Continued Low Prices

Analysts at Environmental Advocates of New York today point to recent forecasts by the U.S. Energy Information Administration (EIA) as further evidence that state leaders and agencies need not rush to begin permitting new natural gas drilling in New York State.

Released yesterday, EIA's Short-Term Energy Outlook (Outlook) shows that abundant natural gas inventories are holding down gas prices. Click here for the Outlook.

Per the Outlook, the usual uptick in natural gas prices during cold weather months was tempered by the high volume of working natural gas in storage. In February 2003, estimated natural gas reserves stood at 851 billion cubic feet compared to 1,729 billion cubic feet at the end of February 2010, a more than 100 percent increase. The amount of working natural gas in storage was above even the previous five-year average of 21 billion cubic feet.

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This week I had the opportunity to moderate and co-produce a panel with the SUNY New Paltz Environmental Task Force at SUNY New Paltz, "The Future of Gas Drilling in New York State," primarily focusing on the process of hydraulic fracturing in the Marcellus Shale formation, including parts that lay in the New York City watershed. Hydraulic fracturing, also known as "fracking," uses massive amounts of water and chemicals to access oil and gas trapped in hard-to-reach shale formations. The EPA has urged state regulators to further study the environmental impact of such techniques primarily because the federal government has no oversight in this matter.

The panelists included James Gennaro, chairman of the New York City Council Environmental Protection Committee, Kate Sinding, senior attorney for Natural Resources Defense Council (NRDC), Scott Rotruck, vice president of corporate development for Chesapeake Energy, Stuart Gruskin, executive deputy commissioner, New York State Department of Environmental Conservation (DEC), and Wes Gillingham, program director, Catskill Mountain Keeper. There was also a closing keynote by U.S. Congressman Maurice Hinchey, D-New York 22nd District.

Attended by over two hundred people, the session was well received by a well-informed and impassioned audience. The conversation between the panelists was sophisticated, with an incredible amount of information proffered. The issues inherent in this particular situation are quite complicated. First, natural gas trapped in the Marcellus Shale, according to Congressman Hinchey, can satisfy the entire nation's current energy needs for the next twenty-five years. However, based on current science, he is firmly against any drilling that utilizes fracking. He is not opposed to the use of natural gas; he is opposed to this particular method of obtaining it.

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Congressman Maurice Hinchey is calling for an investigation into possible job cuts at NYSEG's Kirkwood facility.

Multimedia Watch The Video NYSEG is working to cut costs at the Call center, by either cutting salaries in half, or cutting more than 200 jobs.

Hinchey says the move will only weaken the companies operations.

And he's requested the Public Service Commission to investigate NYSEG'S owner, Iberdrola USA.

"This is really something that's unacceptable. It has no defense on their part whatsoever. So I've called upon the public service commission here in the state of New York to look into this, and do an investigation, and tell them they have no right to behave in this particular way," said Congressman Hinchey.

Hinchey says if the public service commission doesn't take action, he'll find another way to get involved.

Proponents of natural gas exploration are petitioning Gov. David Paterson, lawmakers, and regulatory agencies to allow drilling to begin in the Marcellus Shale.

More than 4,300 people so far have signed an online petition. Petitioners say harvesting clean-burning natural gas in New York will heat homes, spur the economy, reduce dependence on foreign oil, and bring thousands of jobs to the state.

The petition is sponsored by the Independent Oil & Gas Association of New York."

On the flip side, a petition asking the Department of Environmental Conservation to withdraw its draft environmental impact statement on horizontal drilling has more than 9,000 signatures.

Gas industry says legislation in response to Marcellus Shale propsal would kill all drilling efforts

Gov. David Paterson has made clear that he will wait for the state Department of Conservation to finish studying the risks of the proposal before making any final decisions on drilling in the Marcellus Shale.

That could take months, however, and several state legislators who fear the drilling could contaminate New York City’s water supply say they are not content to let the process drag out any longer.

They are pushing a set of bills that would either impose tight regulations on the drilling or possibly kill the Marcellus Shale proposal altogether.

State Sen. Tom Duane and Assembly Member James Brennan have introduced two bills that would prohibit any permits for oil or gas drilling from being issued for two years, prohibit drilling within five miles of the New York City water supply and ban drilling anywhere within the Delaware River watershed.

Duane said that he sees no current justification for hydrofracking, the controversial drilling method that extracts oil by propelling liquid deep into rocks, that has been proposed for the Marcellus Shale project.

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