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New York Aims for Flexible Rates

Fortnightly Magazine - March 15 1997

The New York Public Service Commission on Feb. 12 pushed toward competition by approving a multi-utility pilot program for electric retail access for commercial farms and food processors, and by allowing utilities to use their flexible-rate programs to compete against economic-development power offered by the New York Power Authority (Docket 97012/94EO385).

The Dairylea farming cooperative had asked the commission to approve a pilot open to commercial farms and food processors, except those that already have flexible rate contracts. The PSC agreed. The pilot will include the following service territories: Niagara Mohawk Power Corp.; Rochester Gas & Electric; New York State Gas & Electric; and Central Hudson.

Orange & Rockland was excluded because it already has implemented its "PowerPick" pilot. The PSC said it would like the pilot to move beyond the energy-only framework, minimize stranded costs and avoid burdensome administration.

According to PSC Chairman John F. O'Mara, "The commission believes that the Dairylea proposal, because it cuts across multiple service territories and involves several rate classifications, offers the best vehicle for resolving issues involved in the provision of electric energy services by multiple companies in several utility territories."

On Nov. 3, 1995, the Power Authority had asked the PSC to reaffirm the long-standing policy prohibiting the state's seven investor-owned utilities from competing with the authority's economic-development power allocations. But the PSC denied that request on February 12. Businesses with plans to build or enlarge facilities or move out of the state will have more choices for low-cost power supplies.

Three of the four utilities currently offering flexible rates must eliminate established, economic-power delivery caps designed to limit utility exposure to loss of customers electric load. The caps are: Niagara Mohawk, 46 MW; New York State Gas & Electric, 32 MW; and Long Island Lighting, 26 MW.

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