The Federal Energy Regulatory Commission will not rehear arguments against a new pricing plan that could increase Hudson Valley electric bills by at least 5 percent.
The commission, or FERC, announced last month that it wouldn”™t reconsider a new electric capacity zone in the region that is expected to increase rates by roughly 6 percent for residential customers and 10 percent for industrial ratepayers.
U.S. Rep. Sean Patrick Maloney, a Putnam County Democrat and opponent of the plan, said the fight “is far from over” and will continue in court.
“It”™s shocking and downright wrong that these Washington bureaucrats keep saying this decision won”™t hurt hardworking families and businesses in the Hudson Valley,” he said.
The New York State Public Service Commission, which regulates utilities in the state, and Dutchess County-based Central Hudson Gas & Electric Corp. filed a lawsuit against FERC to delay, modify or cancel the zone altogether. The parties were in appeals court Tuesday, seeking a stay of implementation of the capacity zone which went into effect May 1. The court denied the stay, meaning the new zones are now underway.
The PSC and Central Hudson also requested that the court compel FERC to respond to requests to rehear the zone, a point made moot by the agency”™s announcement last month it had denied the request. FERC did say it would rehear one specific issue, a question of whether an electricity supplier could withhold some of the capacity it sells to increase prices. FERC directed the New York Independent System Operator, which initially proposed the zone, to suggest solutions to prevent that withholding from happening.
The capacity zone will allow power-generating companies such as Entergy Corp., the owner of Indian Point, to charge more to distributors like Con Edison during peak usage periods. The goal is that the increased pricing periods would eventually push companies to build power plants and infrastructure in the region.
In a statement from the PSC, Chairwoman Audrey Zibelman said the commission understands the goal of the zone. “However, in the short-term, this is beneficial only to existing generators in the region at the expense of consumers who pay while receiving no benefit,” she said.
The PSC has said that a better option would be improving transmitter technology to better distribute surplus energy from upstate suppliers to higher-demand regions downstate. Zibelman said FERC had been “dismissive” of the state PSC”™s idea to build transmitters in the area.
There is an existing “bottleneck” in the Albany region, opponents say, that prevents the ample generators upstate from adequately siphoning electricity to the usage-intense downstate area, particularly during high-need times such as the hottest days of summer.
“These take time, but they will happen,” she said. “Our greater concern is that FERC is ignoring consumer impacts and its decision is an unnecessary transfer of wealth from consumers who are already reeling from last winter price increases.
The cold winter and a spike in the cost of natural gas caused electricity bills to increase by between 44 percent and 130 percent last winter, according to the PSC. Some estimates say the total cost increase under the zone will be $280 million for the first year alone, and $500 million over the first three years.
The PSC said that even without the impact of the capacity zone, the futures market for electricity anticipates a 20 percent increase over last year”™s June-through-September rates.
The new capacity zone is the fourth in the state, according to the PSC. The new zone affects ratepayers that are customers of Central Hudson, Con Edison in Westchester, Goshen-based NYSEG Corp. and the Orange and Rockland power company.
