The state Public Service Commission and the New York Power Authority announced today that they are seeking to have the Federal Energy Regulatory Commission reverse a recent decision for a new electric capacity zone. If it goes forward, there could be $350 million in annual electric bill hikes to customers in the Lower Hudson Valley and for downstate power projects the panels consider unnecessary.
The Public Service Commission, the New York Power Authority and several other utilities each filed petitions with the Federal Energy Regulatory Commission, asking for a reversal of its decision allowing the New York Independent System Operator to make changes in the wholesale market for electric generation capacity.
The Independent System Operator’s plan would create a new electric capacity zone that would include New York City and the Lower Hudson Valley with the purpose of attracting investments for additional power plants, according to the PSC and Power Authority. The agencies said in a news release that bulk power transmission projects proposed in response to Gov. Andrew Cuomo’s Energy Highway initiative will bring lower cost upstate power to the downstate region, potentially negating the need for financial incentives for more downstate power plans.
Typical residential electric bills in the Lower Hudson Valley could increase from 5 percent to nearly 10 percent, depending on the utility, and more for industrial and commercial business customers, according to a PSC analysis.
“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,” Audrey Zibelman, chairwoman of the PSC, said in a statement. “We are well aware of the downstate demand for electricity …. 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.”
The Independent System Operator plans to implement the new zone by May 1, 2014. The PSC and Power Authority are asking the federal government to delay implementing its decision until 2017. The PSC is requesting that the Independent System Operator be directed to analyze the estimates of long-term prices that will result from Cuomo’s initiatives to ease congestion.
The Independent System Operator said in documents filed with the Federal Energy Regulatory Commission that the new zone is needed “to send more efficient price signals, enhance reliability, mitigate potential transmission security issues, and serve the long-term interest of all consumers in New York State.”
Cuomo’s Energy Highway Blueprint will add up to 3,200 megawatts of additional electric generation and transmission capacity and clean power generation. The 3,200 megawatts can provide energy to roughly 3.2 million homes.