The Dutchess County executive says he finds it disturbing that a federal agency has provided no response to his and many others’ concerns about a new capacity zone that is expected to raise electric rates for many Hudson Valley residents.
The Federal Energy Regulatory Commission last summer issued an order for implementation of a new capacity zone for the lower Hudson Valley region. This followed FERC’s September 2011 order for the New York Independent System Operator to develop a process to create a new capacity zone. Over the past several months, many federal, state, and local lawmakers, and others, have written to FERC with concerns about what they perceive as the zone’s negative impact, Republican Dutchess County Executive Marc Molinaro among them. But Molinaro a few days ago penned another letter to FERC, berating the Commission’s silence.
“And to not have any public engagement by this federal agency or any real dialogue is offensive,” says Molinaro.
A FERC spokesman declined to comment because the matter is still pending before the Commission. Again, Molinaro.
“This federal agency has shown us a level of arrogance and disregard that it just should not be allowed to extend,” says Molinaro. “It just should not be allowed to occur in this way.”
Democratic Assemblyman Frank Skartados, who has been vocal in his opposition to the new zone, says he spoke with Molinaro last week.
“We are very concerned and we hope that they are listening in Washington that it is something that is going to cost our local taxpayers a lot more than what we are paying right now,” says Skartados. “And it’s unacceptable really and we can find better ways to address this issue.”
The new capacity zone is intended to address transmission bottlenecks and attract investment in new power plants by, as Central Hudson Spokesman John Maserjian puts it, artificially raising electricity prices. Central Hudson and the New York State Public Service Commission are among those that recently appealed FERC’s denial of their requested three-year phase-in period of the zone. Maserjian has pointed to negative impacts of full implementation of the capacity zone.
“The New Capacity Zone would cause quite a bit of damage to our local economy, to households and businesses in the area, with higher energy bills, on the order of up to 6 percent for our residential customers or higher and 10 percent or higher for our large industrial customers,” says Maserjian.
Spokesman David Flanagan points out that the NYISO also petitioned FERC to allow the phase-in period.
“The NYISO believes its proposed phase-in of the new zone will provide the right investment signal to retain critical existing resources and also allow time for the development of new transmission, generation, demand response and energy efficiency resources that will mitigate future cost impacts to ratepayers,” says Flanagan.
The appeal is still pending, and the FERC spokesman says the original FERC order – the one ordering the NYISO to implement the new zone this May – remains in effect unless FERC rules differently.
Democrats U.S. Senator Charles Schumer and Congresswoman Nita Lowey are among those who have written to FERC with concerns about the new zone, along with Assemblymember Didi Barrett and State Senator Terry Gipson, also Democrats. In fact, Gipson says he recently held a conference call with the acting chairman of FERC, who listened but was not permitted to officially comment because the plan is still pending. And Democratic Congressman Sean Patrick Maloney and Republican Congressman Chris Gibson at the end of March introduced a bill to block the new capacity zone. The bill was referred to the House Committee on Energy and Commerce.
