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brIn Personal Letter to Federal Energy Regulatory Commission Chairman, Schumer Says FERC Decision Will Lead To Higher Rates By Excluding Lower Cost Plants From Selling Electricity To New York Power Market and Lead to Higher Electricity Bills for Homeowners and Small BusinessesbrbrbrNew, Low-Cost Power Plants Were Excluded From Selling Electricity To NY Market At Urging Of Companies With Older, Less-Efficient Power Plants, To Protect Their Bottom LinebrbrbrSchumer Presses for Immediate Re-Do Of

United States Senator Charles E. Schumer, in a personal letter to Jon Wellinghoff, Chairman of the Federal Energy Regulatory Commission (FERC), pressed the agency to immediately reconsider a decision that is likely to result in an electricity rate hike of up to $500 million for New York residents. In the recent decision, FERC disallowed companies with more efficient power plants from selling electricity at a lower rate to the New York market.  Schumer requested that FERC go back to the drawing board, do a new hearing on the matter, and issue a new decision that will prevent rate hikes.  Schumer noted that the decision would result in significantly increased electricity rates to homeowners and businesses.   


Schumer stood alongside Carlo Scissura, President of the Brooklyn Chamber of Commerce and Amy Bennett, the owner of Greene Grape, a market and wine store located in Ft. Greene, Brooklyn.

"In these tough economic times, the last thing hard working New York homeowners and small businesses need is another unnecessary increase in their electricity bills. We should be unfurling the welcome mat if a new power producer wants to provide affordable electricity to New York residents, not throwing up obstacles in their way as FERC has done with its unsound decision," said Schumer.  "Preventing more efficient plants from selling electricity is not only costly for New Yorkers, it violates the fundamental principles of the free market.  FERC needs to go back to the drawing board here, and come up with a new decision, with an eye towards giving rate payers some relief."


On September 10 th, FERC made a ruling regarding the ability of new power plants to sell electricity to the New York market. The plants, which are highly efficient and have low air emissions, would be competing against existing plants which are much older and thus, lessefficient with higher air emissions. NYISO had originally determined that the new plant could compete against the existing plant, and then the lessefficient plants filed a complaint with FERC. 


The older plants contended that the rates the new plant would charge were artificially low, and would thus undercut the market, reducing profitability for the companies with the old generators.  FERC, in part, agreed with this complaint, and has disallowed new plants from making such low bids at future power auctions.   Schumer said that FERC should revisit the issue and allow the new plants to compete with the older plants, resulting in lower rates for everyone. 


NYISO says the effect of FERC's decision will be the imposition of hundreds of millions of dollars of new costs on consumers annually, providing an effective windfall to existing generators - and an unnecessary and burdensome cost to households and small businesses. NYISO estimates that New York City electricity ratepayers may see an increase of $300$680 million per year and Upstate New York customers may see a rate increase of $100294 million per year.  The windfall would occur because older plants would not be forced to compete with new plants that can charge less, because they are more efficient and cleaner.   NYSIO estimates the combined increase will most likely be approximately $500 million. 


Schumer today called on FERC to agree to review this decision and go back to the drawing board. Schumer wrote to Chairman Jon Wellinghoff and pointed to NYISO's suggestion that no evidence that the rate increase granted by FERC would lead to improvements to system reliability, public health or the environment. The New York Power Authority, the City of New York, the Metropolitan Transportation Authority, the Port Authority of New York and New Jersey, New York State Office of General Services and New York City Housing Authority are all filing a request for a rehearing.  Schumer explained that a rehearing would allow FERC to review all costs associated with recalculation and ensure that ratepayers are not being overcharged.