The New York Public Service Commission has set up procedures to reimburse qualifying cogeneration and small power production facilities if any of the state's seven investor-owned electric utilities should curtail purchases of power from the QFs. The Independent Power Producers of New York Inc. blasted the decision.

The PSC said it will review QF requests for reimbursement if a utility is alleged to have curtailed purchases unfairly. The decision (Case 97041/C92E0814; C88E0081) appears consistent with the PSC's long-standing practice of requiring utilities to take responsibility for operational decisions. The PSC explained that postcurtailment review as opposed to precurtailment review (FERC's Curtailment Rule permits either method) should eliminate the need for the PSC and parties to invest significant time and resources trying to preestablish terms of each curtailment. Instead, any curtailment will be judged on a specific set of facts and circumstances resulting from a utility's actions.

IPPNY Executive Director Carol E. Murphy charged that the decision will increase pollution from use of older plants, and will allow utilities to stamp out competition. She noted that the curtailment plan was the most "utility-friendly" of the six options from which the PSC was choosing.

"The decision violates contract sanctity and thereby undermines the basic foundation of the very free market that the Commission is trying to establish," Murphy said.

A utility may curtail power purchases from QFs based on utility-specific power supply and usage (i.e., usage specific to its customers' overall electrical requirements). According to Chair John F. O'Mara, New York ratepayers "have been unduly burdened because of our lack of curtailment procedures."

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