Interview by New York AREA Reliable News with Arthur (Jerry) Kremer, Chairman of Advisory Board of New York AREA:

Reliable News: We're here today with Jerry Kremer, 23-year veteran of the New York State Legislature, and 12-year Chairman of the Ways and Means Committee in New York, and also currently the Chairman of the New York Affordable Reliable Electricity Alliance. Jerry, thanks for being with us.

Kremer: I'm glad to be here.

RN: Tell us about the mission of New York AREA.

Kremer: Right after the blackout three years ago, a lot of us came together with a sense that there is no spokesman in this region for energy issues. Every organization that you can think of--major and minor--has a position on energy issues, but they never spoke with one voice. Our job was to come forward and try to be that one voice.

RN: Who are your members?

Kremer: Well, we enlisted a broad cross-section of all the movers and shakers in this region: labor unions, commerce groups, citizens interested in the environment, people who have scientific knowledge. But every walk of life, if you will, is represented in New York AREA.

RN: Let's talk about their concerns. We always hear that health care and energy costs are a huge concern to business. What are the concerns of the membership of New York AREA?

Kremer: I think there are two things that we concentrate on. One is reliability, and that is the assurance that we're going to have a continuing supply of power as we go into the future. And the second thing is cost. There is a price to be paid for energy. People don't want to pay a premium when you don't have enough facilities. When you have to bring in power from other regions of the country, there's an added cost to that. So reliability is key, and cost is always a factor.

RN: The New York Building Congress, in a report this year, said that we need 67,000 megawatts of more power by 2020. That sounds like a lot of electricity. What are the barriers to us, building out the electric supply in New York to meet that growing demand?

Kremer: Today we have no process whereby somebody who comes into New York, who wants to invest in a new power plant, can get a permit in order to do that. The so-called Article X, which the legislature created many years ago, was for the purpose of people getting permits to build new facilities. Article X has expired many years ago. The State Legislature is in a state of gridlock, has not been able to approve an extension of Article X; and without Article X, the message to the outside world is, New York doesn't want or can afford more power.

RN: So Article X expired in 2002, so we're at 4 years without that process. Does that mean that investment is going elsewhere--outside of New York?

Kremer: Well, to the extent that you have things like the New York Power Authority and the Long Island Power Authority, and some of the power companies who are making investments in upgrading their facilities. But we don't have anybody coming into New York with large long-range types of providers, who we desperately need.

RN: So are there short-term solutions then; just Band-Aids put on the problem without a global solution in place?

Kremer: All we have right now that has saved us in New York are many short-term solutions. The installation of these so-called "peakers," which are under 80 megawatts--that's not going to provide long-range power. So right now it's lots of Band-Aids, and no serious bandages.

RN: A lot of environmentalists will say, "Well, we can get the right amount of power if we just invest in renewables." What place should renewables have in the electric supply for New York?

Kremer: Well, everybody should want to be for there to be renewables--all types of alternate sources of energy. They come slowly, they have an expense attached to them, but they don't solve the big picture, which is our long-range energy shortage.

RN: What are renewables? What sources are we talking about?

Kremer: We talk about wind, and we talk about solar. And we talk about different types of projects like that. There are a number of them going on in upstate New York. But the number of them is small, the investment is large, and the communities don't want renewables; because even those people who say that they're environmentalists, they're the ones who're also the NIMBYs who say, "I'd like a windmill, just don't put it next door to me."

RN: The 2003 blackout was a causative problem with the grid...

Kremer: Right.

RN: ...the system that supplies our electricity. The blackout in Queens in 2006 was about a local transmission problem. Are these wakeup calls that have caught enough attention of our policy makers?

Kremer: Well, they are wakeup calls, but we're not quite sure where they've resonated. The problem with all of these crises is that they come at a time when the State Legislature's not in session. They come at a time when people could treat it as an isolated incident. Not recognizing that you need to upgrade your systems. You need new dollars invested in New York for new facilities. So that these are temporary crises in the minds of the public, and if they happen again, they don't connect with the fact that the real solution for New York is keeping the good power sources that we have and getting brand new ones.

RN: The Environmental Protection Agency has guidelines and rules for air quality, and the counties in the lower part--downstate New York are not in compliance with those regulations. What does that mean for our energy production?

Kremer: If you're going to say to someone who's going to build a new plant in New York, that you must apply the highest possible air quality standards--which means the highest possible expense--it's going to be tough. The history down here of bad air quality is by virtue of the fact that a lot of facilities have been built which don't pay attention to air quality. That's not in the case of nuclear, but it is a problem for most other.

RN: Why should we care about air quality to that extent?

Kremer: Well, there's no sense being for reliability, and there's no sense talking about affordability of electric power, if you also don't talk about clean air. We can't afford facilities which pollute our air. We have a terrible history here downstate with respect to air quality. And we've got to make sure that we keep the facilities that provide better air quality, and encourage new ones that do the same.

RN: We as a society take our electricity for granted. When you flick the switch, it goes on. We have all sorts of new toys to have to power, from flat-screen TVs to computer monitors. And I think we all naturally--it's human nature to take it for granted, including major sources of electricity like transit systems. We take for granted our electricity. There are all sorts of new gadgets and toys that we need to power, than we had ever before. What does the average person need to know about electricity usage--how we should be more efficient and conserve energy?

Kremer: Well, every citizen who likes to flick on that light switch and know that it's going to work, should also be conscious of the fact that energy conservation is very important. The people who leave their air conditioners running throughout the summer without ever turning them off--leave in the morning, leave them on, come home in the evening. The people who decide that the best time to do laundry is in the middle of the day, when you have the highest usage. I mean, the public has a role in this, and their role is to be a partner with energy conservation, and to think of ways not just to save money for themselves, but to put that much less of a strain on the system.

RN: When I think about big electricity users, I think about transit. Millions of people come into New York from New Jersey, from Westchester, into Manhattan and the rest of the boroughs every day to work. What does it take to power a system like that, and where does the power come from?

Kremer: I think the people who ride the mass transit system are never focused on the fact that they need energy to run that system. They assume those trains are going to be there, and they assume there's going to be the power to run them. What they don't realize is that facilities like Indian Point provide the bulk of the power for the New York City transit system. You take away Indian Point, and the question is, millions and millions of people are in their own gridlock. They can't get anywhere without a system that works. That system needs power, and the power comes from Indian Point.

RN:  We recently got news that Indian Point's owner Entergy, a founding member of New York AREA, has decided to seek license renewal for Indian Point. What does this mean for New York's energy future?

Kremer: Well, we talk and we argue about, "How do we get a particular company to come to New York and build a new facility?" I think the factor that most people neglect is keeping what we have. Indian Point, with its 2000 megawatts, is probably one of the most significant providers of energy for this downstate region--not just the Westchester AREA and the surrounding counties, but New York City. Office buildings, subway systems. Two new ballparks coming. Indian Point is key to these facilities being built, and for these businesses continuing.

RN: Nuclear power isn't without controversy, though, y'know? Why should nuclear be a part of the mix of energy sources in New York?

Kremer: I think we have to recognize that when the scientists get together and look at air quality here in this region, and there are constant tests going on, one of the places they point to that gives off the least possible pollution is a nuclear facility--Indian Point being the closest one to the City. So Indian Point is a very important part of our effort to keep the air quality here in New York livable for the people who live in this region.

RN: So an anti-nuclear activist say, "Shut down 2000 megawatts of power, and we can replace it with renewable energy and conservation." Is that really a solution they're proposing?

Kremer: I think it's more of a pipe dream. I think what you have to understand is that people can say, "Close something down"--there's no substitute for it. The idea of other renewables coming along--in 10 years, in 20 years, in 30 years--doesn't solve what we need right now. We are energy hungry in this region. We look to get as much as we can get our hands on. You don't discard what you need when you have nothing to replace it with.

RN: So we have new air quality targets we're trying to meet by lowering emissions. We have growth in the City and in the State that's expanding tremendously. And the estimates of the power we're going to need factors those 2000 megawatts from Indian Point, is that right?

Kremer: First of all, if you take away Indian Point, you're taking away even more energy that's generated by the Hoover Dam in any one day. When you take it away, you don't have that reliable source for the transit system, for New York, for Connecticut, for New Jersey, for all the new projects that are coming on. It's cavalier to say, "Shut it down"--but the people who say "Shut it down" have no alternative as to where this power's going to come from. So theirs is a very fruitless gesture to just say, "I'm against it." Today you got to say, "If you're against it, what are you for to replace it?"

RN: Are you saying we need to maintain the current sources of power just to meet current demands. We also have to bring more sources of power online to meet future demands. Is it that simple?

Kremer: I mean, we've got to keep what we have, because we can't afford to give it up. And secondly, we've got to find new sources. Y'know, we have a tendency to say, "2010, 2020--what should I worry about?" But all of us know that the life cycle goes so fast, that we can't be cavalier enough to say, "Well, we'll worry about it in 5 or 10 years." We've got to worry about it now, because it takes a minimum of 5 years for any facility to be permitted and to go online.

RN: Who else supports Indian Point's license renewal, and recognizes that we need this power?

Kremer: The construction industry is the number one supporter of keeping Indian Point online, and the need for the power of Indian Point. They're realists. They know that the buildings that are there and the ones that are going up have to have power. Indian Point, to them, is the lifeline for keeping these projects going.

RN: And one of the things that Indian Point powers is the mass transit system, Metropolitan Transit Authority. Do people even recognize that our transit system runs thanks to that power ---and the folks who are commuting in from Connecticut, the Hudson Valley, Westchester, New Jersey ---do they realize they are all being serviced because of these plants in Westchester County?

Kremer: Yeah, I think it's probably one of the better-kept secrets, that Indian Point is the key source to the operation of the mass transit system in this downstate AREA. You need Indian Point to keep millions of people going to work every day, to and from, taking care of their needs, taking care of medical emergencies, our vast hospital system--all of these entities rely on Indian Point, and there's no substitute and there's nothing that's going to guarantee that they continue to operate without Indian Point.

RN: You have said that the Shoreham Nuclear Power Plant on Long Island is "like the Ghost of Christmas Past." Why?

Kremer: Well, not too many people here in the downstate region remember about the "Shoreham debacle," as they would call it. I mean, here a plant was built at a cost in excess of $6 billion, was ready to be licensed, was operating on low power, and a large group of people--many of them not even from the New York region—got together and decided to challenge the opening of the Shoreham Power Plant. Now, most people would say, "All right, the plant was never built. So what did it mean?" The closing of the Shoreham Power Plant doomed Long Island to be energy hungry for the next 50 years. It caused taxpayers in Suffolk County--there's a school district out there, the Shoreham-Wading River School District, which was on the verge of shutting down. The County of Suffolk and the taxpayers are saddled with over $1.4 billion in debt, because they had to pay back taxes that they'd collected on the facility. Shoreham is a lesson for everybody to remember when the NIMBYs talk about shutting down Indian Point. It was Shoreham yesterday; it could be Indian Point tomorrow. And all of these lessons not learned will mean that people are doomed to have higher taxes, less power, and a whole variety of ills that no one can imagine.

RN: What are "NIMBYs"?

Kremer: They're called "Not In My Back Yard" people. And they're the people who, for some selfish reason, say—even if they come to a community after the plant's been there, they say, "I don't want it, shut it down, it's not safe." Are they scientists? No, they're not. Are they people who are well-schooled on these issues? No, they're not. What they've decided, for whatever reason--sometimes too much idle time--is, "That's something I'm going to be against. That'll fill up the rest of my day."

RN: So you're saying that consumers on Long Island are carrying the burden of cost for a nuclear plant that was built and never used.

Kremer: Exactly right.

RN: And they're paying for that today.

Kremer: And they will continue to pay for it for another 16 years on their utility bills, where there is a special line on there--it's called "Shoreham Surcharge." So the price for the closing of Shoreham was not a one-time charge--it's a cost for children and grandchildren and great-grandchildren of people living on Long Island.

RN: What recommendations would you make to the state’s newly elected leaders for new policies we need to approach and--and pursue for New York's energy future?

Kremer: Well, regrettably--and I think that's one of the reasons why New York AREA came into existence--there hasn't been an energy policy here in New York. And so what do we need? We need a permitting law--"the extension of Article X," as we call it. That's very important. Send a message to the private sector: "It's time to start investing in New York again and building new facilities." Two, we need the support of the new administration for keeping the facilities that we have open. It's not necessary to join the gang outside in the streets who don’t want it, when everyone knows there's no substitute. In addition, we've got to have long-term power contracts to make sure that anybody who supplies power has the guarantee of being able to provide that power for many years to come. So what it really means is that the new administration has to have a rational energy policy--but a policy that looks to the present and the future.

RN:  What evidence is there, Jerry, that we need more power?

Kremer: The good news is--on top of the bad news—is that there are lots of reliable sources who all say the same thing. They may be a chorus, but they're people who are not connected. The New York Building Congress does their own study, and says that by 2020, we'll have a serious loss of power. Then we get the Independent System Operators the people who provide the energy that works its way into our region--they're saying 2010, some say 2012. Mayor Bloomberg's task force comes forth and says, "2012, we're going to have to have more energy." So these are all different types of sources coming from various directions, and when they come to the middle, they all say the same thing: New York region is energy starved, and without more power and without keeping what we have, we're in crisis.

RN: So, who else is saying that we need more power?

Kremer: All of the independent experts: the New York Building Congress, the New York system operators, Mayor Bloomberg's task force. Every one of these groups studies the issue on their own, look at it in-depth, bring in the best scientific people, and all come to the same conclusion: we are a region in crisis that needs long-range power and needs the ability to keep what we have.

RN: And if we don't add to the supply of electricity in the coming years--what then?

Kremer: Well, then New Yorkers better get ready for the brownouts, and the eventual blackouts, and the interruptions of service, and the subway system that's not running when they expect it to be there. So it's not gloom and doom that we're talking about, it's just realism. We've got to have more power.

RN: Jerry, what does this mean for jobs in the AREA? Are jobs dependent on electricity, and are more jobs likely if we can expand our supply of power?

Kremer: Well, we can't keep the jobs that we have if we don't have reliable and reasonably cost-effective sources of power. You've got to have that, because with the energy that we get from Indian Point, with the energy that we'll get for new facilities, is the guarantee that people will be working every day. And if we want this region to grow and to have more jobs, then we've got to have more reliable power. And the two are linked together, and there's no way that this region can grow economically--and not go into a recession in the years to come--without reliable and affordable costs of power.

RN: So we need more power in New York City, we need more power statewide in the coming years, and you say that the power that comes from Indian Point is critical to New York's energy future because of the skyrocketing demand.

Kremer: The fact of the matter is, we're building two new baseball stadiums, we're redeveloping Ground Zero, we're building a major facility in downtown Brooklyn, the Mayor has aggressive plans for redevelopment of the outer boroughs, there's more affordable housing being built in the outer boroughs than ever before. Lots of things have happening. But they demand and need more reliable sources of power.

RN: So it's clear that we need more electricity in the coming years in New York, and you believe that Indian Point is critical to our energy infrastructure so that we can meet demand in the future.

Kremer: Yeah, I can't imagine this region not being totally blacked out without Indian Point operating. I mean--again, we can't be cavalier. We need what we've got, and we've got to get more. And Indian Point is a key factor in the economic survival of this region.

RN: So long as the plants operate safely and securely, we need that power.

Kremer: We rely on a company that's had a good record on safety and security to continue that. That's been their track record, and that's why it's easy for New York AREA to support Indian Point.