By: Barbara Vergetis Lundin |
The New York State Public Service Commission (PSC), the New York Power Authority (NYPA), and several New York utilities are seeking to have the Federal Energy Regulatory Commission (FERC) reverse a recent decision that could result in $350 million in annual electric bill increases to customers in the lower Hudson Valley, as well as the construction of unnecessary new power projects downstate.
The petitions filed request that FERC reconsider its decision to allow the New York Independent System Operator (NYISO) to make changes in the wholesale market for electric generation capacity, which would create a new capacity zone that would include New York City and the lower Hudson Valley with the purpose of attracting new investments for additional power plants. However, the bulk power transmission projects proposed in response to Governor Cuomo’s Energy Highway Blueprint initiative will bring lower cost upstate power to the Lower Hudson Valley and New York City region, thereby potentially negating the need for FERC to offer financial incentives to build more power plants downstate.
Governor Cuomo’s Energy Highway Blueprint is a comprehensive initiative issued in 2012 that will infuse New York State’s electric power system with up to 3,200 MW of additional electric generation and transmission capacity and clean power generation.
“We strongly urged FERC to reconsider its decision to create a new capacity zone in New York, which it says is needed to build more power plants downstate to alleviate demand for electricity,” said PSC Chair Audrey Zibelman in a statement. “We are well aware of the downstate demand for electricity, a fact highlighted by Governor Cuomo’s Energy Highway Blueprint. However, in its decision, FERC did not take into consideration the ongoing initiatives included in the Governor’s Energy Highway Blueprint designed to resolve transmission constraints between upstate and downstate without needlessly burdening consumers.”
According to the PSC’s analysis, if FERC’s plan goes into effect, typical residential customers in the lower Hudson Valley could see monthly electric bill increases ranging from 5 to almost 10 percent, depending on the utility.
The NYISO plans to implement the new zone by May 1, 2014. The PSC is asking FERC to delay implementing its decision until 2017. Further, to account properly for the Governor’s Energy Highway initiatives, the PSC requests that FERC direct NYISO to analyze the estimates of long-term prices that will result from the Governor’s initiatives to ease congestion. Without such analysis, FERC cannot properly assess whether it is causing more harm than good, and whether consumers might end up paying hundreds of millions of dollars for unneeded power plants, according to the PSC.
In addition to failing to account for ongoing initiatives to deliver lower cost power downstate, the PSC said the new zone would not get new generation built over the short-term, since suppliers would be looking to the longer-term price signals that result from the State’s initiatives, and not the short-term price spikes associated with implementing the new zone at this time.
