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N.Y. Fills "Vacuum" Asserts Wheeling Authority

Fortnightly Magazine - September 15 1997

The New York Public Service Commission has asserted authority to mandate direct-access pilot programs to give supply choice to energy consumers, noting that state authority is crucial to filling a regulatory "vacuum," since the Federal Power Act withholds authority from the Federal Energy Regulatory Commission to mandate retail wheeling.

The case involved a pilot program developed by Dairylea Cooperative Inc. The program requires four upstate utilities (Niagara Mohawk, Rochester Gas & Electric, New York State Electric & Gas, and Central Hudson) to allow commercial farm and food processing customers to access outside sources of electric power by aggregating their load or purchasing the supplies independently. (Recently, Central Hudson had proposed a pilot program to give direct access to Dairylea members, starting October 1997. (See, "Two N.Y. Utilities Submit Proposals," July 1, 1997, PUBLIC UTILITIES FORTNIGHTLY, p. 12.)

In fact, the PSC already had approved the Dairylea plan in February. (See Case 96-E-0948, 175 PUR4th 428.) And last November, a state court had affirmed PSC authority to require filing of unbundled tariffs. See, Energy Asso. v. N.Y. PSC, 653 N.Y.S.2d 502 (N.Y.App.Div.1996).

The PSC added that it could implement the Dairylea plan even without plans in place for open-access transmission pricing, an independent system operator or a wholesale power exchange market. Re Dairylea Co-op., Inc., Case 96-E-0948, May 22, 1997 (N.Y.P.S.C.).

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