STATE OF OUR STATE

Highlights from City & State’s conference exploring key state issues

 

In City & State’s inaugural “State of Our State” forum, key policymakers, experts and advocates weighed in on the opportunities and challenges facing the state in three critical areas: healthcare and Medicaid; energy exploration and development; and public-private partnerships.

What follows are edited highlights from the day’s discussion.

 

 

 

 

Session 1: Healthcare and Medicaid
Q: How would a health exchange work in New York—or would we even have one if the Supreme Court nullifies the Affordable Care Act?

Assemblyman Richard Gottfried, chair of the Assembly Health Committee: The governor’s executive order is not keyed to the Affordable Care Act. So, by the terms of his executive order, if the ACA were either struck down or repealed tomorrow, unless he changes his executive order, the exchange would go forward.
James Tallon, president of the United Hospital Fund: If they ruled against the mandate and threw out all the insurance provisions, you wouldn’t have the subsidies that are integral to bringing people into the exchange, and you wouldn’t have the federal flows of money that are helping the state set up the exchange. So, without getting into any other questions, the exchange that’s envisioned under the law drafted in New York under the executive order would be operating absent federal law under very different terms.
Q: What if we cannot make this work?

Gottfried: I am as convinced as can be that we cannot make it work. There’s an old Chinese expression that you cannot carve rock in wood. That is why I believe ultimately we are going to have to—and should, and I’m doing whatever I can to—move to a single-payer health-coverage system, because I don’t think our current system can be made good.

Session 2: Energy Exploration and Development
Q: We’re at a critical time for energy in New York. How critical is it?

Dennis Holbrook, director of the Independent Oil and Gas Association of New York: We are in a crisis mode. We have waited for coming up now on four years. We’ve spent a lot of time talking about drilling in New York, while the rest of the country has moved forward. I fully respect a process that says we want to make sure the science is sound. But that’s been the characteristic of New York for many decades in terms of [the Department of Environmental Conservation’s] oversight of the oil and gas industry. Why we suddenly put this major roadblock up, and say nothing can take place until this study that seems to be endless, I don’t think there’s a rational scientific explanation.

Sen. George Maziarz, chair of the Senate Energy Committee: The status of energy today, on a scale of 1 to 10, we’re probably at a 4. Clearly there’s a transmission problem in New York. We have the capacity for a lot of generation in upstate New York, and can’t move it downstate. One of the positives we do have is stability in the executive branch. We’ve had three governors in five years, and now we’ve got some stability in the executive branch sending consistent signals to the Legislature on what we can do.

Jackson Morris, senior policy adviser at the Pace Energy and Climate Center: The decisions that we make regarding a lot of generation that’s inefficient and old and should have gone away a long time ago needs to be replaced by cleaner resources, and those pieces are starting to fall into place. What happens between now and 2020 is really going to define the face of energy in New York for the next 50 years. And a big piece of that absolutely has to be the pieces that are coming into place regarding solar, because we are falling behind in that area.

Q: Is transmission one of the state’s major energy challenges?

Matthew Cordaro, co-chair of the Suffolk County Legislature LIPA Oversight Committee: Transmission has been the orphan in the energy problem arena for quite a long time. It hasn’t been lucrative for the utilities to invest in transmission. They don’t get as much return out of it. It’s been neglected. Transmission is very difficult to permit, even before construction. Many people don’t recognize that there is more opposition to transmission than to power plants because they traverse hundreds of miles with many communities along those right-of-ways.

Q: Will the Indian Point nuclear power plant be relicensed?

Assemblyman Kevin Cahill, chair of the Assembly Energy Committee: It is entirely likely that the Nuclear Regulatory Commission will do what the Nuclear Regulatory Commission has always done, and that is relicense the facility. But at what cost to Entergy? What will be extracted from them in order to do so, and not only at the NRC level but at the DEC level, where they have to comply with New York? Ultimately the question we ought to be dealing with as a matter of public policy is not, Are we willing to take a bet on what the NRC is going to do? What we ought to be determining is, If Indian Point closes, can we handle it? We can handle it handily. Our duty is to be prepared for it should they make the decision not to relicense or to close down sooner.

Maziarz: You can’t take that much power off the grid in that area of the state where you have the most need. A lot of these costs the NRC is going pass off to Entergy, which in turn means ratepayers are going to have to pay for it. I think it will be relicensed and be there for some time into the future.

Q: Is the New York Energy Highway aimed at replacing Indian Point?

Francis Murray, president and executive director of the New York State Energy Research and Development Authority: It’s a much larger issue we’re trying to focus upon. Now, what does or does not happen with regard to Indian Point may be a factor in terms of what an individual developer may suggest to us. Secondly, the governor has made it clear that from his perspective investment in energy infrastructure is critical to the state’s economic growth. He is not going to do anything that’s going to jeopardize the overall reliability of the electric system here in New York State.

Session 3: Public-Private Partnerships
Q: Who invests in public-private partnerships?

Thomas Madison, president of the New York State Thruway Authority: Ironically, in New York we have this enormous public employee retirement system, a $140 million or so that it’s investing in infrastructure assets in other places in the United States and in other countries around the world. We’re doing investments in South America or in Germany, but we can’t come 20 miles up the Hudson River and invest it in a truly New York State asset until we get a new law in place.

Q: What will pave the way for public-private partnerships in New York?

Mike Elmendorf, president of the Associated General Contractors of New York State: You need the authority to do it. The governor’s there. Design-build was a huge, significant step forward. When we travel around the country and talk to our colleagues in other states and say, “Hey, this is great, we got design-build authorization in December,” they kind of laugh at you, because we’re in the dark ages when it comes project delivery. There’s a whole bunch of other tools that ought to be in the toolbox in terms of delivering these projects. P3 is one of them. Like design-build, you need to have the legal authority for these agencies that go out and do the procurement. To do that, you’ve got to have the framework. The Senate has moved, and the problem, frankly, has been in the Assembly.

Q: Who should oversee these projects?

Michael Likosky, director of the Center for Law and Public Finance at NYU: It’s best that the projects come up through the regional councils.… The value of the New York Works Task Force is you really want to raise the bar on financing; you want someone to go through. You really want to have your P3s and your infrastructure to have that central decision-making as well.

Q: Will the state be giving away assets with little accountability?

Kenneth Adams, president of the Empire State Development Corporation: Let’s remember that government always retains control of these projects. You can have the authority to engage in public-private partnerships, and at the moment of negotiating a concession agreement—which is in effect when government is going to concede a portion of an existing asset or an asset to be built, and share in responsibilities and maintenance and financial benefits and so on—there is a specific concession agreement that says terms and conditions, and the theory should usually be, pay for performance. So government retains control to judge performance. And if performance isn’t met, and there’s a violation of that agreement, government pulls back the asset.

editor@cityandstateny.com