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Court Issues Order In Lawsuit Against FERC

Doc Searls, flickr

A U.S. Court of Appeals has responded to a lawsuit filed earlier this week by a Dutchess County utility and the New York State Public Service Commission concerning a new capacity zone.

The U.S. Court of Appeals for the Second Circuit has ordered the Federal Energy Regulatory Commission to respond by May 27 to a May 12 lawsuit filed by Poughkeepsie-based Central Hudson Gas & Electric Corporation and the New York State Public Service Commission to halt further actions under a new capacity zone that was implemented May 1, and to act on earlier petitions. John Maserjian is spokesman for Central Hudson.

“For us this is very encouraging news,” says Maserjian. “We can’t, of course, predict the outcome, but we’re hopeful that the court will render a decision on our motion to stay, at least to stay or cancel further auctions under the new capacity zone, and allow us to return to the prior model before the next auction takes place on June 9th.” 

A FERC spokeswoman did not respond to a request for comment. Traditionally, FERC does not comment on pending legal matters. A PSC spokesman says the commission is pleased that the court has decided that the issues presented to it by the Public Service Commission merit a response from FERC. The Court panel will hear the motions and petitions June 3. Central Hudson’s Maserjian sums up the intent of the petitions.

“The earlier petitions were to cancel implementation of the new capacity zone or phase in the new capacity zone to help mitigate its impact, or other measures that were proposed by Central Hudson and the Public Service Commission to, again, lower or mitigate the impacts of the new capacity zone.”

FERC had denied the request to phase in the capacity zone, and both Central Hudson and the PSC appealed that decision. FERC has yet to rule on the appeal, and Central Hudson and the PSC, in their filings with the Court of Appeals, say FERC failed to conclude the appeal matter within a reasonable amount of time --the new capacity zone having been implemented May 1, and the first of the new capacity zone auctions held in April. Maserjian notes the new capacity zone – which groups the lower Hudson Valley with New York City - is intended to address energy shortfalls by raising electricity prices to attract new electric generators to downstate New York. Maserjian says the impact is already being felt, and customers will start seeing higher electric bills in June.

Democratic State Senator Terry Gipson is among a bipartisan group of lawmakers, from Congress to the local level, calling on FERC to abandon the new capacity zone. Gipson praises the court order.

“We hope as have continued to press FERC that they will come around to see that this a bad idea that they are proposing, that it’s very unpopular in our district, that we cannot afford to have our electric rates go up more, that our economy is in a place where we just cannot afford to increase the cost of living or the cost of doing business anymore and we’d like for them to find more reasonable alternatives,” says Gipson.

In a statement, Democratic Congressman Sean Patrick Maloney says he is glad the courts are finally demanding answers from FERC. Maloney personally delivered a number of letters opposing the new capacity zone to FERC’s office the day before the new zone was implemented.

Paul Steidler is spokesman for New York Affordable Reliable Electricity Alliance, which supports the new capacity zone.

“The opposition by politicians to the new capacity zone is shortsighted and unfortunate,” says Steidler. “The zone is important in order to facilitate infrastructure and economic development in the region. It’s critically important that the region have more electricity, more power plants that produce power nearby. There’s been a significant reduction in the number of facilities serving the region over the past 15 years.”

He says claims of higher electricity costs are misguided, as any rate increases would likely be eliminated over time with more supply.

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