New York Deregulation


07/08: The New York State Public Service Commission adopted a three-year rate plan for Orange and Rockland Utilities, Inc.'s (O&R) electric delivery service. Rates for the company's electric delivery service have not been increased generally since 1993. The Commission today authorized O&R to increase rates for electric delivery services in order to generate incremental annual electric revenues of nearly $15.6 million in each of the three rate years ending June 30, 2009, 2010, and 2011. This amount results in an increase in total company electric revenues of approximately 2.5 percent per year.

08/04: The New York Public Service Commission (PSC) issued a proceeding related to "Further Steps Toward Competition in Retail Energy Markets." In the proceeding, the PSC suggested methods by which utilities could adopt standards to encourage retail competition.

09/02: A Governor's press release was released and stated that, "Governor Pataki signed net metering legislation that would encourage farmers to sell excess electricity generated through the use of anaerobic digesters to utilities. Net metering laws already exist for electricity generated by solar panels on homes. The new legislation would expand those laws to include technically qualified farms as potential "net metering" customers who generate power from methane."

01/02: Retail competition was fully implemented in Long Island and seven years ahead of schedule. According to the Public Authorities Control Board buyout, Long Island Power Authority was required to phase-in retail competition by 2008. The LIPA purchased Long Island Lighting Company's transmission and distribution system and electric retail operations in May 1998, and reduced electricity rates by an average of 20 percent. In 1999, 400 MW was open to retail access and another 400 MW in 2000. The "shopping credit," used for comparing retail marketers' prices, was increased from 3.5 to 4.5 cents/kWh, giving energy supply companies more incentive to participate in LIChoice. At the time, retail marketers were supplying 220.4 MW to 38,039 residential and commercial customers.

06/01: The New York Public Service Commission approved standards governing the electronic exchange of routine business information and data among electricity and natural gas service providers in New York. The PSC also issued an order to establish uniform retail access billing and payment processing practices that would facilitate a single bill option for customers who buy power and/or natural gas from ESCOs. The orders were designed to facilitate retail energy competition in New York and provide for efficient single-billing options for all New York electricity and natural gas customers.

05/01: The New York Public Service Commission approved Consolidated Edison Company's rate reduction plan. Beginning April 1, delivery rates were scheduled to be reduced by $208 million for all Con Edison customers. Phase 4 of Con Edison's Retail Electricity Choice program was also approved by the PSC, beginning May 1. Con Edison's competitors could implement small credits as part of their marketing strategy to attract customers. The credit was based on the amount Con Edison saved by not having to provide electricity to customers who switch to alternative suppliers. Also, ConEd would provide a one-time $65 incentive for each new customer that switched to a competitive supplier. In order to be eligible at the time, the supplier must have shared the payment with the customer, and the customer must have been with the supplier for at least three consecutive billing cycles.

03/01: The PSC approved rules for customers in New York State Electric & Gas territory to receive a credit for switching to a competitive electricity supplier. The old "shopping credit" was set, at 3.71 cents per kilowatt-hour, below market prices. Competitors could not beat that price with market prices consistently being higher. The new "shopping credit" would be tied to the going market price plus a small amount for administrative costs, making it easier for competitors to deal with wholesale prices that fluctuate seasonally.

12/00: The New York Public Service Commission staff released a report recommending modifications in the operation of the New York Independent System Operator. The report recommended a hard cap of $150/MWh and the power to order retroactive refunds. FERC was scheduled to approve the recommendations before they would become an order.

09/00 U.K. based National Grid Group PLC announced that it would purchase Niagara Mohawk, New York's second largest electric and gas utility, for $3 billion in stock and cash and the assumption of $5 billion in debt. The deal would require approval from New York regulators, the Securities and Exchange Commission (SEC), the Federal Energy Regulatory Commission (FERC), and several other regulatory bodies.

08/00: The PSC approved Niagara Mohawk's plans to reduce delivery prices for the third year as part of its 5-year price reduction and restructuring plan of September 1998. The delivery price reduction, which was scheduled to be implemented on September 1, 2000, would total nearly $19 million. Residential and small commercial customers were scheduled to see an average delivery price reduction of about 1.5 percent when compared to September 1, 1999 pricing, and the largest industrial customers were scheduled to see reductions of about 1.9 percent.

08/00: Dynegy announced the intent to purchase two generating facilities totaling 1,700 MW for $903 million. The facilities included a 500-MW plant owned by Central Hudson Gas & Electric and a 1,200-MW station jointly owned by Central Hudson Gas & Electric, Con Edison, and Niagara Mohawk. Both facilities were located in Newburgh, NY. The transaction was expected to close during the first quarter of 2001, pending federal and state regulatory approvals.

04/00: The PSC approved a "floating shopping credit" proposed by ConEd. The shopping credit was proposed to reflect prices published by the NYISO in the differences between actual and market-based costs would be shared 90/10 between the ratepayers and the stockholders.

12/99: A competitive supplier, NYSEG Solutions, offered Niagara Mohawk Power Corporation (NIMO) residential customers a choice in generation supplier.

08/99: Niagara Mohawk received approval to reduce prices for the second consecutive year, beginning September 1, 1999. The price reductions were part of NIMO's PowerChoice Plan. Average reductions for residential and small commercial consumers were proposed to be about 1 percent in addition to the approximate 0.8 percent affected last year. Another reduction scheduled for September 1, 2000, was scheduled to achieve overall reductions of about 3.2 percent. Industrial customers would receive larger reductions. Total savings for all customer classes under the three year Power Choice Plan was proposed to be about $600 million.

08/99: Numerous large business customers in LIPA's Choice Program began receiving power in August from an alternative supplier, ConEdison Solutions. ConEd Solutions was supplying about 20 MW of power to over 100 facilities on Long Island at the time.

04/99: Phase II of ConEd's retail choice program began in April. Nearly 22,000 new customers were enrolled, bringing the total customers in the programs to more than 68,000 at the time.

02/99: A briefing paper was issued from the New York General Assembly that criticized the piecemeal PSC process of restructuring. It listed five criteria that the PSC plan had failed on in restructuring the industry.

02/99: The PSC ordered utilities to submit monthly reports in 1999, and quarterly reports thereafter, to monitor competition. The reports would contain the number of consumers eligible to participate, the number of kWh eligible for retail access, the number of consumers per ESCO in the utility's operating territory, and the number of kWh provided by each ESCO.

01/99: The governor withdrew a tax break for customers who chose an alternative generation supplier, resulting in a 4 percent increase in rates for customers who were "choosing."

12/98: ConEd began Phase II of its customer choice program. Enrollment of customers to exercise retail choice was scheduled to begin January 1999.

11/98: Orange & Rockland (O&R) and ConEd proposed to sell 16 power plants (about 1,776 MW of gas, oil, and hydro capacity) in New York to Southern Company for $480 million.

11/98: NYSEG proposed to sell its fossil fuel-fired generation to AES (6 coal plants for $950 million) and Edison International (Homer City Station for $1.8 billion).

11/98: The PSC ordered utilities, beginning in 4/00, to inform customers of the sources of their electricity and their amount of environmentally "clean" power.

11/98: Long Island Power Authority began retail access for 400 MW of load in January 1999 with a target of August for delivery of power from competitive providers. The first phase of direct access was split between residential (180 MW), commercial, and government consumers. Phase II was scheduled to open another 800 MW in May 2000. All customers of LIPA were scheduled to have retail choice by January 2003.

06/98: The PSC set rules for a Systems Benefit Charge to fund R&D related to energy service, storage, generation, the environment, and renewables; pilot programs for energy management for low-income consumers; and environmental protection.

05/98: Due to over-subscription of ConEd's Phase I for retail competition, the load for residential and small commercial customers was doubled to 1000 MW; a lottery was scheduled to be conducted for large customers. Customers were also scheduled to begin receiving power from their suppliers of choice among more than 20 registered ESCO's on June 1.

05/98: Orange and Rockland became the first utility in New York to offer retail choice through its Power Pick program as customers began to receive power from their suppliers of choice on May 1, 1998.

02/98: Assembly Bill 7942-D was introduced by Senator Tonko to provide an alternative deregulation plan to the PSC, saying the current PSC plan did not go far enough to protect consumers. The bill called for competition in electric generation no later than March 1, 2000 for all consumers, including municipal systems and 10 percent rate cuts by September 1998.

02/98: The PSC approved Niagara Mohawk's plan for rate restructuring, a nonbypassable CTC to fund $3.6 billion in debt for settlement with 16 independent power producers to restructure uneconomic contracts, and divestiture of fossil-fueled and hydroelectric plants. Retail competition was scheduled to begin in 1998 for large customers and be available to all customers by January 1, 2000.

02/98: The PSC approved a restructuring plan for Central Hudson Gas & Electric. The plan required divestiture of fossil-fueled plants, a rate freeze until June 30, 2001, rate reductions, and transition to full retail competition by July 2001.

01/98: The PSC approved New York State Electric & Gas's restructuring plan. The plan included a phase-in of retail competition for small industrials beginning August 1998, full retail competition by August 1999, a rate freeze and rate cuts, and divestiture of its coal plants by August 1999.

01/98: The PSC approved Rochester Gas & Electric's restructuring plan. RG&E proposed beginning the restructuring process in July 1998 with open access for 10 percent of its customers and phase-in full retail access by July 2001. Divestiture of fossil-fueled and hydro plants and rate cuts were also included in the plan.

12/97: The PSC settled Orange and Rockland's proposal for restructuring. O&R was scheduled to phase-in retail competition beginning May 1998, allow full retail competitive by May 1999, provide rate cuts, and require divestiture of generation assets by May 1999.

09/97: The PSC approved ConEd's restructuring plan. The plan called for rate cuts, retail competition to phase-in beginning June 1998, and full retail access by December 2001. In addition, ConEd would file by January 1998 unbundled tariffs for all classes of customers, to become effective April 1998. The plan also called for divestiture of at least 50 percent of ConEd's New York City fossil-fueled generation by the end of 2002.

06/97: The PSC approved a pilot program for more than 17,600 qualified farmers and food processors, beginning in 11/97.

07/96: The PSC approved O&R's pilot program, "Power Pick," that, if enacted, would allow industrial consumers retail access to competitive generation suppliers. The program was scheduled to begin 5/98.

05/96: The PSC issued its opinion and order regarding competitive opportunities for electric service that restructured New York's electric power industry. The Competitive Opportunities Case adopted the goal of having a competitive wholesale market by 1997, and a competitive retail market by early 1998. Electric utilities were required to submit restructuring plans by October 1996. It also stated that utilities should have a reasonable opportunity to recover stranded costs consistent with the goals of restructuring.