11.11.14

SCHUMER ANNOUNCES PUSH TO RESCIND FEDERAL FUNDING FOR DISASTROUS HUDSON VALLEY CAPACITY ZONE THAT UNFAIRLY HIKES RATES ON LOCAL RESIDENTS – SCHUMER INTRODUCES SENATE BILL ON WEDNESDAY THAT WILL PREVENT FERC FROM USING FED FUNDS FOR IMPLEMENTATION

Ill-Conceived Federal Energy Capacity Zone Is Unfair For Local Orange, Sullivan & Ulster County Residents & Business Owners, Who May Be Forced to Pay 6-10% More on Their Energy Bill At A Time When Wallets Are Already Stretched Thin – Schumer Has Led The Charge To Try To Stop Capacity Zone In Its Tracks; Senate Bill Is Next Step

Schumer’s Senate Bill Would Make It More Difficult for FERC to Implement Capacity Zone, Preventing Them From Using Federal Funding On Any Effort That Hikes Rates – Schumer Bill Takes Bi-Partisan Effort By Reps. Maloney & Gibson In House, Brings It To Senate Floor; Schumer Will Push For Passage By The End Of This Year


Schumer: If FERC Will Not Listen To The Residents of Hudson Valley, Legislation Will Help Tie Their Hands

Today, at Festival Square Park adjacent to Middletown City Hall, U.S. Senator Charles E. Schumer announced he is introducing a bill in the Senate that would limit the Federal Energy Regulatory Commission (FERC)’s ability to use federal funds to set up the misguided energy capacity zone in the Hudson Valley, and he pledged to fight in the Senate for an amendment to the federal government spending bill that would prevent FERC from putting any federal money toward capacity zone implementation. This energy capacity zone, which was first proposed last year, unfairly hikes electric rates in Orange, Ulster and Sullivan Counties, as well as Putnam, Rockland and Dutchess Counties. In some areas, rate hikes could be as high as 10 percent. Schumer said that this capacity zone is already damaging enough for Hudson Valley ratepayers – and the costs for individual consumers far outweighs the benefit of the potential new power generation – and using federal funds to make this capacity zone a reality would just add insult to injury. Schumer’s bill is a modified version of a bill previously introduced in the House by Reps. Sean Patrick Maloney and Chris Gibson, and the amendment is also an effort by Maloney and Gibson that passed the House with bi-partisan support. Schumer noted that the amendment, which is attached to a federal government spending bill, must also be included in and passed as part of the Senate version of the spending bill in order for it to reach the President’s desk and become law. Schumer said he will be introducing the bill on Wednesday, the first day the Senate is back in session.

“With winter’s chill right around the corner and electricity rates already expected to force Hudson Valley residents to tighten their belts, the implementation of a capacity zone that imposes an unreasonable rate hike on consumers would be a double-whammy to residents and businesses across Orange, Ulster, and Dutchess Counties. We have much better ways to increase power in the Hudson Valley besides doing so on the backs of ratepayers, especially in a way that raises rates all at once. That is why I am here today introducing my two-pronged plan to ensure that FERC cannot use federal dollars to move any further forward with this misguided plan,” said Schumer. “Stripping FERC of its funding would help tie their hands, and I vow to be the champion of this legislation in the Senate until this shortsighted policy is reversed.”

Schumer has strongly opposed the new capacity zone since the beginning, arguing that it unfairly increases rates on consumers at a time when electric prices are already high, Schumer explained that there are two prongs included in his efforts to halt the implementation of the capacity zone. First, Schumer will introduce legislation that will require FERC to complete and publish a cost-benefit analysis before moving any further forward with the capacity zone and, and this bill would prevent FERC from putting federal funding toward the capacity zone if the cost-benefit analysis shows that it will result in increases for rate-payers, which Schumer said any study is likely to conclude. Second, Schumer pledged to support an amendment to the House’s version of the federal spending bill that recently passed the House with bi-partisan support. Schumer explained that the Senate will likely be considering an omnibus spending bill, and he will push to make sure this amendment is included. Schumer said this legislation—introduced by New York Congressmen Sean Patrick Maloney and Chris Gibson—needs a champion in the Senate, and Schumer said he will be a leader in these efforts to slow down the capacity zone and make it more difficult for FERC to make it a reality.

Schumer said this is particularly important now, as higher winter electricity rates are right around the corner. Schumer has long been an advocate for preventing this capacity zone from becoming a reality. He first sounded the alarm in November 2013 when he called on the Federal Energy Regulatory Commission (FERC) to delay their order to implement a new capacity zone. Then, in January 2014, after FERC approved a proposal by the New York Independent System Operators (NYISO) – which operates and administers New York’s transmission network – to create this new capacity zone, Schumer said that the FERC order was wrongheaded and failed to adequately protect residential and business consumers. In March, following this approval, Schumer demanded that FERC overturn their initial decision based on several considerations.

In April, Schumer personally appealed to leaders of NYISO and FERC to shelve the unnecessary capacity zone. During separate in-person conversations in April, Schumer pressed Acting FERC Chairman Cheryl LaFleur and both the Chairman of the Board of the New York Independent System Operator (NYISO), Robert Hiney, and NYISO Executive Director Steve Whitley, urging them to reverse course on the proposed capacity zone. Schumer said the FERC order was structured in a way that would leave consumers shouldering increased costs in a way that is unfair, when better solutions to more power generation exist, including  transmission upgrades proposed by the New York State Energy Highway program, which are approved by the PSC and set to go online in 2016. These improvements are specifically designed to deliver power to Hudson Valley customers. Schumer also noted that the capacity zone will be a double whammy for taxpayers because it will force municipalities to pay more for electric as well at county- and city-owned facilities.

Schumer was joined by local homeowners and business owners who will be affected by this capacity zone, as well as Orange County Executive Steve Neuhaus, Joseph DeStefano, Mayor of Middletown; representatives from Citizens for Local Power and the Orange County Chamber of commerce; and Daniel Duthie, a local energy lawyer.

“Citizens for Local Power applauds Senator Schumer for his leadership in the Senate to end this unjust and unnecessary new capacity zone, which lines the pockets of incumbent generators at our communities' expense while doing nothing to address long-term grid reliability,” said Jen Metzger, of Citizens for Local Power. “CLP has been fighting this new zone at the grassroots level since January and is thrilled that Congress will step in and put the brakes on the FERC.”

In 2013, NYISO proposed, and earlier this year FERC approved, a new capacity zone in the power grid that stretches from New York City to Albany. This capacity zone would raise electric rates in an attempt to lure new power generators to the Hudson Valley. The initial NYISO proposal, approved by FERC last August, raised the tariff on the new capacity zone by $350 million dollars annually. After a subsequent rehearing, FERC approved the order again in January, this time with an annual tariff of $230 million, which Schumer said is still unacceptable. Currently, there is a surplus of cheaper power generated in Upstate New York that does not reach energy-needy areas in the Hudson Valley and New York City in an efficient manner due to a transmission bottleneck near Albany.  The new zone is effectively imposing a tariff on the entire region; with this FERC-approved annual increase of $230 million. Initial estimates suggest that customers in Hudson Valley Counties will see increases of between 6 and 10 percent, and Schumer stressed that this will be felt particularly hard in the upcoming winter months. The New York State Public Service Commission (PSC), the New York Power Authority (NYPA) and towns throughout the Hudson Valley are also fighting the impending rate hikes.

Schumer has long been an advocate for keeping energy and electricity prices affordable for Hudson Valley residents. Schumer said he wholeheartedly supports finding new energy sources for Hudson Valley residents, but he does not support doing so on the backs of ratepayers, especially if – as in this case – other options exist to deliver the needed power more efficiently and cheaply.  Schumer has expressed concern about the impact these large rate hikes could have on small businesses, employers and residents throughout the Hudson Valley who are entering a long winter, particularly after record low temperatures last winter significantly drove up energy costs. For many companies, such a large spike in energy costs could decrease job creation and expansion efforts at a time when the local economy is on track for economic growth.

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