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Electric Executives' Forum - Summer 2001: Are You Ready?

Demand-side programs are all the rage as utilities scramble to find power to serve peak loads.
Fortnightly Magazine - June 1 2001

since public awareness is high and people are asking those questions, and we want to take advantage of their interest and make sure we're prepared and ready to do a good job.

Ralph Tedesco
President
New York State
Electric & Gas Corp.

"We offer our customers very sophisticated meters, whereby they can download usage information over the Internet, and they can use that information to not only manage their usage, but perhaps more intelligently procure supply."

Urging Action from the ISO

NYSEG lays out a plan to keep New Yorkers from paying outrageous electric rates in the coming years.

What prompted you to go public with your warning about problems in New York State's electric market?

I would say there were at least three factors. The key factors were, first, what we saw going on in the wholesale gas and electric marketplace. Secondly was a strong desire to protect our customers and the upstate economy from the volatile, erratic wholesale electric market we have here in New York. And the third thing was a report issued by the New York Independent System Operator that we thought was very unrealistic in its assumptions and therefore flawed.

Things that we've looked at that have caused us some concern were, first, wholesale gas and electric market prices. When we looked at, say, January to January, we saw that the wholesale gas prices were up about 200 percent and in New York wholesale electric prices in that same timeframe were up roughly 100 percent. In addition to that, we feel that there are serious gaps in energy and infrastructure planning in New York, and this will take many years to correct. Other things that we looked at that were going on around us were, in the city of New York, Con Edison customers experiencing 30 to 70 percent price increases. Now Niagara Mohawk is talking about 6 to 10 percent price increases if their merger does not go forward. We have the New York Independent System Operator, contrary to their initial report, now saying that they expect wholesale prices to rise steeply by 2005, as much as 46 percent. And we see in Massachusetts, the Boston Globe is reporting electric price hikes of up to 69 percent.

Setting aside what's going on in California, and collectively, we looked at these things and said that we have a responsibility to protect our customers and, again, to protect the upstate economy from these very volatile price swings. [In upstate New York,] the economy is just now beginning to perk up, and a key part of sustaining that is providing our customers stable prices. And indeed, our customers are in strong support of stable prices and what we call our Price Protection Plan, whereby we are offering to freeze electric prices until 2008. ... [Prices already have been frozen since 1995.] I should also mention that during that same period, our industrial rates have declined 20 percent, and under our Price Protection Plan, we're offering to reduce those industrial rates an additional 5 percent. And this, again, is what

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