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Fortnightly Magazine - March 15 1995

latitude in resource planning.

On February 15, the Independent Power Producers of New York, Inc. (IPPNY) entered the fray to counter arguments that PURPA forces NYS&G to "overpay" for wholesale power. Carol E. Murphy, executive director of IPPNY, challenges utility claims of low-cost power: "Three-cent utility power is a myth. [That's] the variable cost of running plants, but does not include taxes, insurance, or the debt service." Murphy adds that a true comparison should include avoided costs for both energy and capacity. "That's what avoided cost truly means," she says.

Later I spoke with Stephen Lewis, communications manager at the National Independent Energy Producers (NIEP). Lewis notes that NIEP has filed for rehearing in the CL&P case. Lewis also echoes the view that the New York case is more directly involved with the PURPA cost ceiling.

On February 22, the FERC ruled against the CPUC. It faulted the way California set avoided costs. In my view, the FERC can't do that. It shouldn't micromanage state PUC cost calculations. Yet it's hopeless to try to preserve subsidies for certain flavors of electrons. This fight goes far beyond PURPA.



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