Niagara Mohawk Fights Gas Import Tax

Fortnightly Magazine - April 15 1996
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Niagara Mohawk Power Corp. (NiMo) has asked the Federal Energy Regulatory Commission to rule that a New York state law violates the Public Utility Regulatory Policies Act of 1978 (PURPA) by requiring ratepayers, in effect, to reimburse gas-fired QFs (qualifying facilities) for payments made under a state-imposed, 4.25-percent natural gas import tax.

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NiMo says that the tax and the reimbursement mandate will add $7.2 million to the electric bills of its customers in 1996 (em a figure that could climb to $13.5 million by 2006. NiMo believes the reimbursement requirement means that utility payments to QFs exceed avoided costs, as defined in PURPA. According to chairman and chief executive officer William E. Davis, the company believes PURPA should preempt the state law.

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