This legislation would amend the Public Service Law (PSL) to establish an onerous and outdated administrative mandate upon electric generators. This legislation would mandate the filing of an annual report described in PSL Section 66(6) that was established in 1910 and has not been applicable to wholesale generators since the 1990’s.
A significant amount has changed since 1910, the average annual salary was $750, life expectancy for males was 48, and the National Debt was $1.15 billion. When the Legislature enacted PSL Section 66(6) in 1910, Wholesale Generators and competitive markets did not exist. Only monopoly utilities existed. The Public Service Commissions has stated that the “legislative purpose in enacting the Public Service Law was to ensure that the monopoly electric service providers charged only ‘just and reasonable rates’ for electric services, and we have now determined that those rates are best achieved through market competition.”(1)
Times have changed the electric market is no longer controlled by monopolistic utilities. Now wholesale generators operate independently of transmission companies. Generators seek sale of their commodity through a competitive wholesale market regulated under federal law.
The PSC, first through the Wallkill Ruling (1991) and Order (1994) (2) and then the 1999 Carr Street Order, reasoned that the mechanical application of PSL § 66(6) would unduly burden wholesale generators while providing no additional benefits to the retail customers, because wholesale generators were receiving compensation reflective of the market price not a regulatory established rate.
In conclusion, with a number of independent power producers privately held, strict application of PSL § 66(6) could risk forcing these entities to disclose confidential, proprietary information which could inhibit competition in the wholesale market. The Legislature presumably will want to avoid such consequences as it carefully weighs this issue.
The Business Council recommends against approval of this legislation that would unduly burden wholesale generators while providing no additional benefits to the retail customers.
(1) Carr Street Generating Station, L.P., Order Providing for Lightened Regulation, Apr. 23, 1999
(2) Case 91-E-0350, Walkill Generating Company, L.P., Declaratory Ruling on Regulatory Policies Affecting Wallkill Generating Company and Notice Soliciting Comments (issued August 21, 1991)