Blackout 2003 impact on economy and development.

New York City is nearing the end of a tumultuous year. We have experienced some positive moments, such as the start of construction on The Hearst Corporation's new headquarters tower and next month's opening of the temporary WTC PATH Station, as well as some more difficult periods, such as the large budget deficits in Albany and City Hall.

But the biggest story to date has been the blackout of August 14. How we ultimately respond to that day figures to impact the City's economy and the building community for years to come.

In reviewing the 2003 Blackout, it is first necessary to applaud the collective spirit of New Yorkers, who faced the situation with a calm resolve.

In addition, gratitude must be extended to Mayor Michael Bloomberg, as well as those agency and transit officials, utility workers and emergency responders, who kept the City safe during the power outage, and ensured that essential services were restored as quickly as possible.

New York City has long had and continues to enjoy the most reliable electric service in the world. Businesses that locate here expect and need this reliability to continue.

At the same time, the ongoing reliability of New York's electric system cannot be taken for granted. In addition to incredible personal hardships, the 2003 Blackout resulted in hundreds of millions of dollars of lost economic activity.

Future electricity problems would have adverse effects on public health and safety, and the City's ability to grow its economy, retain jobs and protect its environment.

While every indication is that New York was a victim of outside problems, we still must work together to prevent a recurrence.

New York City currently is heavily dependent on electric supplies from the transmission grid, which failed throughout the northeastern United States on August 14.

Adequate local generating capacity, combined with increased investment in energy efficiency, is the only way New York City can reverse its over-dependence on this multi-state network of transmissions lines that are subject to the kinds of inefficiencies that caused the blackout.

Yet there are clear and persistent signs that the City's growing overall electricity demand is threatening to outstrip available supply. New power plants must be built in New York City as part of a comprehensive energy solution that incorporates an increased commitment to energy efficiency and clean distributed generation.

Led by New York Building Congress Energy Committee Co-Chairs John Gilbert and Bill Harkins, a coalition of New York City labor, construction, real estate, business and environmental associations has warned about the urgent need to add 2,000 to 3,000 megawatts of new electricity capacity over the next five years.

This additional capacity could help prevent further blackouts, as well as keep prices from spiraling out of control and would replace aging power plants with more efficient and cleaner plants.

As a concrete first step, our coalition urged Governor Pataki and the New York State Legislature to make reauthorization of Article X, the legislation that governs siting and approval of power plants, their immediate priority. We must send a signal to the energy and investment communities that New York is a hospitable place to do business.

We cannot expect energy producers to seriously consider investing in new, clean power plants in a State where the government cannot even agree on the rules for siting and constructing such facilities.

In addition to passing a new siting law, the State needs to support policies that directly address the fact that there is little or no private financing available to build power plants without long-term contracts in place.

In addition, the coalition asked the State to enhance its successful energy conservation program. Measures to be supported include: encouraging installation of energy--efficient household appliances: use of more efficient lighting and air conditioning systems by building owners; enhanced incentives for construction of highly efficient "green buildings;" and regulatory policies that support use of solar power, fuel cells and co-generation.

The coalition also has been working closely with the Bloomberg administration. Less than a month before the blackout, members of our Energy Committee met with Mayor Michael Bloomberg and other City officials to discuss its policy on major energy issues and its role in meeting current and future energy needs.

Presently, the Building Congress and its coalition partners are involved in an inter-agency Mayoral Energy Policy Task Force, which has been charged with coordinating and executing the City's efforts to maintain its position as the nation's most reliable supplier of electricity.

With New York City poised for a robust economic recovery and for the reconstruction of Lower Manhattan, we must prepare our infrastructure to meet the demands of this future growth, including the additional electricity needs of new jobs, businesses, residents and tourists.

If we act now, we may be able to avert the next major crisis.