Utility Energy Issues
Restructuring
Energy utilities in New York are being deregulated or "restructured," mainly at the initiative of the New York Public Service Commission (PSC). Restructuring of the state's retail electric industry was begun by the PSC before the maturation of federally regulated competitive wholesale markets, and without comprehensive legislative action to address the issues of the obligation to serve, universal service, affordable energy prices, low income rates and customer protection.
The administrative approach has been to "unbundle" elements of service whenever they can be provided competitively, and eventually to limit the role of monopoly utilities to residual "bottleneck" functions like maintaining the electric grid or the gas distribution system.
New providers of the retail service elements deemed by the PSC to be competitive are encouraged to enter the market and have been "lightly" regulated by the PSC. For example, the PSC has not required the new retail gas and electricity service providers to publicly file their rates, terms and conditions of service.
New owners of power plants sold by the local utilities now sell the power they generate into private wholesale markets. Because they intended only to sell at wholesale, the NY PSC authorized “lightened regulation” when it granted them certificates to operate.
The Federal Energy Regulatory Commission (FERC) oversees rates for wholesale sales of electricity and interstate transmission. FERC now allows “market-based rates,” a departure from long standing statutory requirements of the Federal Power Act, which requires all rates and rate charges to be publicly filed, subject to FERC review for reasonableness, before they take effect.
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