Thursday, April 17, 2014


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Schumer appeals to leaders of NYISO and FERC to shelve unnecessary, new electric-rate-raising ‘capacity zone’ 

WASHINGTON - In separate in-person conversations, U.S. Senator Charles Schumer pressed Acting FERC Chairman Cheryl LaFleur and both the Chairman of the Board of the New York Independent System Operator (NYISO), Robert Hiney, and NYISO Executive Director Steve Whitley to reverse course on the proposed new capacity zone in the Hudson Valley that would jack-up rates on consumers by as much as 12%. FERC is currently rehearing an order, first proposed by NYISO, that would establish a new capacity zone in the Hudson Valley and increase rates on consumers in the hopes of attracting more power generation. Schumer has strongly opposed the new capacity zone since the beginning, arguing that it unfairly increases rates on consumers at a time when electric prices are already high, without any guarantee of new power generation. At an event in Albany, Schumer personally urged both the head of FERC, which has decision-making power over the order, and the Chairman of the Board and Executive Director of NYISO to reconsider their former positions and undo the order for the new zone.

“I told Acting Chairman LaFleur, Chairman Hiney and Executive Director Whitley in no uncertain terms that to jack up the price of electricity on Hudson Valley consumers was absolutely the wrong approach. Especially after a winter of sky-high energy costs and electricity prices, imposing another rate hike would be like a double-whammy to residents and businesses from Westchester, Dutchess, Orange and Ulster counties,” said Schumer. “We have much better ways to increase power in the Hudson Valley besides doing so on the backs of ratepayers; especially in a way that raises rates all at once.  I will continue to press all of the key decision-makers every opportunity I get until this shortsighted policy is reversed.”

Schumer attended an event with FERC Chairman LaFleur, NYISO Chairman Robert Hiney and NYISO Executive Director SteveWhitley where he personally reiterated his opposition to the proposed capacity zone in the Hudson Valley. Schumer underscored his argument that the new zone was not necessary and would raise rates too high on Hudson Valley consumers, after a winter of already-skyrocketing prices. Furthermore, he said the FERC order was not structured in a way that would actually attract more power generation over the short-term; so consumers would be shouldering increased costs in the short-term without any benefit.

Last year, NYISO proposed, and earlier this year, FERC approved, a new capacity zone in the power grid that stretches from New York City to Albany that would raise rates in an attempt to lure new power generators to the Hudson Valley. The initial NYISO proposal, approved by FERC last August, raised the tariff on the new capacity zone by $350 million dollars annually. After a subsequent rehearing, FERC approved the order again in January, this time with an annual tariff of $230 million, which Schumer said is still unacceptable. Currently, there is a surplus of cheaper power generated in Upstate New York that does not reach energy-needy areas in the Hudson Valley and New York City in an efficient manner due to a transmission bottleneck near Albany.  The new zone would effectively impose a tariff on the entire region; with this FERC-approved annual increase of $230 million. Initial estimates suggest that customers in Hudson Valley Counties could see increases of between 5 and 12%. The New York State Public Service Commission (PSC), the New York Power Authority (NYPA) and towns throughout the Hudson Valley are also fighting the impending rate hikes.

Schumer said he wholeheartedly supports finding new energy sources for Hudson Valley residents, but he does not support doing so on the backs of ratepayers if, as in this case, other options exist to deliver the needed power more efficiently and cheaply.  Schumer expressed concern these large rate hikes could have on small businesses, employers and residents throughout the Hudson Valley who are just coming off of a long winter where record low temperatures drove up energy costs. For many companies, such a large spike in energy costs could decrease job creation and expansion efforts at a time when the local economy is on track for economic growth.