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NYSEG quick to react to New
York PSC decision on rates

New York State Electric & Gas quickly vowed to "pursue all legal avenues to recover legitimate costs and earn a just and reasonable return."
What's ahead from EPACT: one year later?

 Audio conference
Sept 26, 10:30 - 12:00 EDT

Restructuring Today has assembled leading experts to talk about (and answer your specific questions on) the most massive rearranging of energy law in modern times:

• Thomas Kuhn, president, Edison Electric Institute

• William Massey, the former FERC commissioner

• Ed Zaelke is a partner at Morgan, Lewis & Bockius

• Susan Kelly, general counsel, American Public Power Assn

Click here for details and to register.         Yes, that means they'll seek an appeal but it doesn't mean they'll get it.
        Early on NYSEG sought to get the chairman to recuse himself based on his expressed pro-competition views.
        William Flynn, the chairman, refused and the courts backed his views. This is not a case of the chairman's picking a decision because of the recusal issue as a compromise.
        He knew the courts backed him on that issue.
        The more we look at the PSC decision the more it seems as if the PSC didn't believe that market is ready for unfettered competition and this was the best transitional step -- making the fixed price a temporary stepping stone.
        The PSC knows the risks in trying to set a market-like price -- given what has happened in most states that have opened up then scared off marketers by setting "market prices" much too low.
        NYSEG CEO Jim Laurito described the PSC's action as "unfortunate" in cutting the utility's distribution rates.
        Besides changing NYSEG's default service to a variable-rate option and trimming potential profits on its fixed-rate option (RT, 8/24), the PSC ordered a $36 million cut in distribution rates.
        NYSEG is to refund to customers $77 million in excess revenue earned under the utility's old rates and from asset sales.
        The PSC based the rate cuts on its rejection of accelerated depreciation NYSEG proposed for recovering some costs, differences in estimates of future costs and sales revenues and a lower return on equity than the utility had asked for.
        The 9.55% return the PSC allowed "is appropriate," regulators noted, for NYSEG's financial risk and consistent with what it's allowed for other utilities.
        Laurito maintained the utility "sorely" needs a rate boost and that Consolidated Edison, Orange & Rockland, Central Hudson Gas & Electric and National Grid (formerly Niagara Mohawk) have gotten rate hikes over the past year.
The outlook
for demand response in
a high-price environment

Audio conference
Sept 22, 12 - 1:30 EST

Get insiders' perspectives on where the demand response industry is going and how industry leaders are taking advantage of volatile energy prices and record demand.

Join EnerNOC's Phil Giudice, ConsumerPowerline's Reena Russell, Comverge's Bud Vos and Dan Delurey from the Demand Response & Advanced Metering Coalition and the US Demand Response Coordinating Committee to learn more.

Click here for details         The utility's resources "were stretched" by flooding this summer, Laurito noted.
        "I shudder to think what will happen when we are called upon to respond to future emergencies," he added.
        We suggest that the PSC may want the management -- or at least the owners -- to see how far the commission can lean over backwards for cooperative utilities while actually leaning over backwards for those that don't cooperate.
        Laurito cautioned the decision will hurt the utility's ability to attract financing for infrastructure improvements…
        ... And he's entitled to that view.
        The PSC OKd NYSEG's entire construction budget and the extra $6 million the utility asked for to cover unexpected project costs, regulators noted.
        Laurito warned a review of how the PSC functions and makes its decisions would be a "top priority" for a new governor next year.
        The chairman and commissioners should have an independent staff to help them review ALJ's decisions like other states, Laurito urged.
        That would have been "especially helpful" in NYSEG's rate case since three of the five commissioners were appointed since the rate case had been filed.
        Senior PSC staff, Laurito pointed out, directs both the prosecution of the case and advises the chairman, commissioners and judges - a conflict of interest in his view.
        "There is no way to get a fair and balanced decision with this type of organizational structure," Laurito noted, and it results in "bad public policy."
        The next governor is almost certain to be the famed Democratic Attorney General Eliot Spitzer who publicly supported NYSEG's position contrary to the PSC's vision for the state's electric market (RT, 4/21, 4/20).
        A major unknown for next year will be the role of Spitzer in energy policy.
        Spitzer's handling of the press has been superlative -- making him already a major national figure even before becoming governor.
        A real possibility is that he may look at what Gov George Pataki has accomplished in energy prices and building New York commerce and decide to go easy on rocking the energy-competition boat.
        Originally published in Restructuring Today on August 25, 2006

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Conference Links


The outlook for demand response in a high-price environment
When: 09/22/06 , 12:00 PM - 1:30 EDT
Where: Your home, work or cell phone
www.restructuringtoday.com/conferences/demand.html

What's ahead from EPACT -- one year later?
When: 09/22/06 , 10:30 AM- 12:00 EDT
Where: Your home, work or cell phone
www.restructuringtoday.com/conferences/demand.html

CEA Technologies Inc (CEATI) -- Issues in Power Quality
When: Sep 12, 2006 - Sep 13, 2006
Where: Montreal, Quebec, Canada - Fairmont Queen Elizabeth Hotel
www.ceatech.ca/Meetings/PQ/Issues-Power-Quality.pdf

UPLC -- Broadband Power Line 2006
 When: Sep 17, 2006 - Sep 20, 2006
Where: Omni Charlotte Hotel -- Charlotte, NC
http://bplconference.org/

NET-ATHOME™ -- The world’s most international connected home event
When:  September 26 & 27, 2006
Where: Hilton Hotel -- Cannes, France
 www.net-athome.com/

IQPC's International Powerline Communications 2006
 When:  October 23 - 26, 2006
Where: Renaissance Penta Vienna Hotel Austria
http://www.iqpc.co.uk/GB-2790/BPLT

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