NYPSC chooses competition, but what does it mean?

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change Commission’s

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use of safe

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c

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s

have a greater impact on New

statement. “Allowing those costs

harbors under the Public Utility

York than perhaps any previous

to be recovered will mean no sav-

Holding Company Act of 1935.

order.”

ings in the near term, and the

The trade group also said it

NYPSC Chooses Competition, But What Does It Mean?

T

PSC’s fee proposal will further re-

doubts that bringing competition

duce savings from competition.”

will result in rapidly falling elec-

Paul Tonko, chairman of the As-

tric rates. “The differentials be-

sembly’s energy committee, said

he decision in May by the

tween electricity prices in New

the hearing will “review whether

New York Public Service

York and other states are not the

the IX

result of the absence of a competi-

tory bounds.”

Commission

to restructure the

state’s electric business around

tive industry structure in New

competitive principles has left

York state,” said the association,

many observers grasping for de-

noting that competition is not in

has overstepped its statu-

Citing Market Power, FERC S taf 1s Against Primergy

tails. The PSC order lays out gen-

0

eral principles, in what one observer described as a “rule book,”

pponents of the merger of Wisconsin Energy Corp. and

and will deal with the details in in-

Northern States Power Co. got a

dividual filings by the state’s elec-

powerful new ally in mid-May-

tric utilities. Utilities are to file

the staff of the Federal Energy

their plans by October on how to

Regulatory Commission.

create customer choice by Jan. 1,

mony filed supporting the staff

1998. In mid-May the five-member

position, Perry Brown of FERC’s

commission unanimously ap-

“The proposed merger raises con-

proved the plan, which will create

cerns that market power could be

a wholesale power pool similar to

exercised against bulk power buy-

the one in California, impose a

ers in Wisconsin and Upper

In testi-

Office of Economic Policy said,

wires charge for environmental

place in low-cost states, either.

Michigan. Applicants’ own miti-

and energy efficiency programs,

The problem, said the association,

gation proposals are insufficient

and decide on stranded invest-

is “the high cost of doing business

to alleviate those concerns. I rec-

ment issues on a case-by-case ba-

in New York state,” including

ommend that the commission not

sis. “Competitive forces will re-

high taxes. The PSC has proposed

approve the merger as it is pro-

model the electric industry,

nothing to deal with these prob-

revitalize New York’s economy

posed.” Brown, a staffer in the division

and provide customers with

lems. State Democratic leaders were

lower prices and greater choice,”

quite critical of the P!SC order. As-

competition problems could be

said John O’Mara, PSC chairman.

sembly Speaker Sheldon Silver

of competition analysis, said the

set a May 30 hearing to review the

rectified by one of two steps: 0 “Divestiture of some or all of

New York State, which represents

order. “The PSC is clearly dodg-

Wepco’s generating facilities,” or

the investor-owned

ing the most difficult issue of

The Energy Association

of

electric utili-

l

Establishment of an inde-

ties in the state, put out a cautious

whether utilities will be able to re-

pendent system operator with

statement. While the group said it

cover from ratepayers the $17 bil-

widespread membership “that is

supports competition, it will review the PSC order “very care-

lion in stranded costs that will re-

the control area operator for all its transmission owning members

fully. The details of this order will 12

sult from moving to competition,” said Silver in a

and conforms to the principles T/XElectricity Journal