A Dutchess County-based utility company is turning to legal action in its opposition to a new capacity zone that it says is already translating into higher electric rates. The New York State Public Service Commission has also filed an emergency motion with the court.
Central Hudson Gas & Electric Corporation is calling for the U.S. Court of Appeals in New York City to order the Federal Energy Regulatory Commission to act on previously filed petitions requesting moderation or elimination of a new capacity zone whose implementation has already begun. John Maserjian is spokesman for Central Hudson.
“We’re calling on the courts to order a stay on any purchases for capacity under the new capacity zone until a resolution can be made regarding our petition,” says Maserjian.
Central Hudson’s most recent petition to FERC came April 30, compelling FERC to rule on the pending petitions to cease implementation or to answer an appeal to phase in the new capacity zone. Maserjain says the new capacity zone is intended to address energy shortfalls by raising electricity prices to attract new electric generators to downstate New York. And that’s a good thing, according to Entergy Nuclear spokesman Jerry Nappi. Entergy is the parent of the Indian Point nuclear power plant in Westchester County.
“Existing power generators in the lower Hudson Valley would benefit from that new capacity zone,” says Nappi. “And it’s really put in place to help entice new generation in this region. We’ve seen a number of generators retire over the last several years in part due to the fact that payments for their power have been falling.”
Meanwhile, community groups and lawmakers from nearly every level throughout the portion of the Hudson Valley affected by the new capacity zone have written to FERC requesting that the new zone be abolished. Central Hudson and the New York State Public Service Commission are among those that appealed FERC’s denial of their requested three-year phase-in period of the zone. FERC has not yet ruled on the appeal. PSC Chair Audrey Zibelman says the Federal Power Act — which provides FERC its regulatory authority — requires wholesale prices to be just and reasonable. Zibelman says under these circumstances, the imposition of a new capacity zone is not just and reasonable and that PSC has taken this unusual action of going to court because FERC is taking an action that will result in consumers being financially harmed without any real remedy.
The PSC filing with the Court of Appeals dated May 12 says the imposition of charges flowing from the first of the new capacity zone auctions held in April 2014 is already being felt. Maserjian says Central Hudson customers will start seeing higher bills: up 6 percent for residential customers and 10 percent or more for industrial customers.
“Those receiving bills in June will start to see the effects of the new capacity zone as it has taken place in May,” says Maserjian. “Those receiving their bills in July will see the full effect of the capacity zone as it relates to higher capacity prices in May and June.”
Central Hudson and the PSC say FERC has failed to conclude the appeal matter within a reasonable amount of time. A FERC spokesman says there is no set time when FERC will issue an order on the rehearing requests. Again, Maserjian.
“It’s important that this case move forward, and without any action or decisions by FERC regarding our petitions, we felt compelled to take the issue to court so that we can move this case forward,” Maserjian says. “And we will continue to fight for what we believe is in our customers’ best interests because paying higher electricity prices needlessly does not benefit anyone.”
The FERC spokesman declined to comment on Central Hudson’s and the PSC’s filings with the U.S. Court of Appeals.