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Niagara Mohawk Prepares for Battle

Fortnightly Magazine - June 15 1995

On May 11 in the U.S. District Court for the Northern District of New York, Niagara Mohawk Power Corp. (NMP) filed suit against the Federal Energy Regulatory Commission (FERC) and the New York Public Service Commission (PSC), seeking relief from what it terms "mandated, above-market electricity purchases" from unregulated generators. NMP contends that such purchases cost its customers over $1 million a day.

In its filing, NMP points to a 1995 FERC decision finding that states violate the Public Utility Regulatory Policies Act when they require utilities to purchase electricity from unregulated generators at above avoided costs. NMP argues that it is unlawful for the FERC to exclude existing contracts from that decision.

NMP has asked the court to rule that:

s The FERC must apply its avoided cost ruling to existing contracts.

s The PSC violated federal law by compelling NMP to enter into contracts at above avoided costs.

s The PSC must allow NMP to revise a rate tariff referencing the six-cent law.

s The PSC must refrain from any enforcement action if NMP refuses to pay rates mandated in illegal contracts.

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