New York's energy problem threatens the entire industry.

While New York should have ample power in reserve this summer and avoid the energy problems now plaguing California, members of the New York Building Congress and its Energy Committee as well as its partners in business and real estate believe that without quick and decisive government action, City residents and businesses will still face large price spikes, brownouts and even blackouts in coming years. Such a scenario or even the credible threat of such a scenario could pose real dangers to the future health of the design, construction and real estate community.

The Building Congress joined with the Real Estate Board of New York (REBNY), the Association for a Better New York, the New York City Partnership and the Building & Construction Trades Council of Greater New York to issue a report this year warning that the City faces a deficiency in electricity of between 2,000 and 3,000 megawatts (MW) over the next five years. This figure is based on projected increases in demand as well as the need to assure market stability and to replace aging plants and equipment.

The momentum that our economy has built and sustained over the past few years is seriously threatened by the possibility of an inadequate and expensive supply of power. The energy crisis in California has forced investors and entrepreneurs nationwide to factor energy capacity into their business location and expansion decisions. The issue has quickly become a matter of urgency and New York needs to send the clear message -- that we are prepared to meet the power needs of a growing economy.

To date, more than a dozen plants have been proposed for New York City by a number of energy generators which, if taken together, would add 5,500 MW of capacity. At this time, no proposed generating facilities are under construction. If an electricity crisis is to be averted, at least some portion of the proposed 5,500 MW of generation capacity must be made available over the next five years. This cannot occur unless New York State's siting process is accelerated considerably.

In addition to efforts to bolster supply, government can take a range of measures to limit growth in demand. By encouraging conservation among business and residential consumers, New York City could save approximately 500 MW of electricity consumption annually. These initiatives include: time-of-day pricing or price-responsive programs; incentives for purchase of energy-efficient appliances; and increased State and Federal funding for conservation programs and testing of new technologies.

We have already seen the effects of tight supply on price volatility. The average New York City household saw their bills rise by 40 percent in June of 2000. Further problems were averted thanks to a cool summer, but similar and more severe price spikes may become commonplace if sufficient additional generating capacity is not created.

The New York Building Congress has been working closely with the Real Estate Board of New York on this subject, and we applaud REBNY for their efforts to make developers, building owners and managers aware of the problem. We also support their-efforts to encourage conservation measures among their members as well as the occupants of their members' properties.

We urge everyone in the design, construction and real estate community to contact their elected officials and testify at community meetings concerning power plant siting and review. It is important that our voices in support of reliable and competitively priced electricity are heard clearly during the ongoing debate. No less than the future prosperity of our industry, our economy and our City is at stake.