Source: http://www.bdlaw.com/news-1195.html
Timestamp: 2018-02-18 21:45:40
Document Index: 75724948

Matched Legal Cases: ['§ 66', '§ 66', '§ 66', '§ 66', '§ 66', '§ 66', '§66', '§66']

NYS Public Service Commission May Tighten the “Lightened Regulation” Regime Applied to Wholesale Electricity Generators: Environmental and Natural Resources Law, Attorneys, Beveridge & Diamond
News & Events / NYS Public Service Commission May Tighten the “Lightened Regulation” Regime Applied to Wholesale Electricity Generators
The New York State Public Service Commission (Commission) may tighten at least one aspect of the lightened regulatory regime that it has applied to wholesale electric generators for nearly two decades.
With the development of the wholesale electric generation market in New York State, the Commission began to assess whether it was necessary to rigidly apply certain provisions of the state’s Public Service Law to entities operating solely in the wholesale marketplace. What emerged, first through the Wallkill Ruling (1991) and Order (1994) and solidified in the 1999 Carr Street Order, were the parameters of a “lightened regulatory regime” that Commission has consistently applied to wholesale generators of electricity since that time.i The Commission reasoned in Carr Street 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.”
Through Wallkill and Carr Street and their progeny, the Commission undertook a realistic appraisal of the Public Service Law and concluded that certain provisions would not be applied at all to wholesale generators, while others would be applied lightly. Thus, provisions primarily aimed at protecting retail customers, it was determined, would not be applied to wholesale generators since they do not sell electricity at retail. Other provisions, the Commission concluded, should be applied in a manner that limits their impact in the competitive wholesale market. Among the latter is Public Service Law § 66(6), which requires regulated entities, including electric corporations, to file annual reports that include, among other things, details on the amount of its authorized, issued and outstanding capital stock, the amount of bonded and other forms of indebtedness, and the company’s annual receipts and expenditures during the preceding year. Rather than strictly impose this requirement on power producers operating in the wholesale market, the Commission concluded that wholesale generators could satisfy this requirement through the submission of information to the Federal Energy Regulatory Commission (FERC) whose requirements were considerably less onerous.
However, in a June 3, 2011 Notice Soliciting Comments, the Commission announced that it needed to revisit this issue, stating that since 1991 “FERC has repeatedly reduced the scope of the filing requirements it imposes on wholesale generators. It now appears that meeting the FERC filing requirements no longer also meets the disclosure requirements of PSL § 66(6).”ii Consequently, the Commission concluded that “an inquiry is needed to reexamine the annual report filing requirements applicable under PSL § 66(6) to wholesale generators, and to other electric and gas corporations granted lightened ratemaking regulation in reliance upon the Wallkill Ruling and Order.”
Several parties have filed comments, both in support of and opposition to Commission action. The Independent Power Producers of New York (IPPNY) filed a vigorous opposition, offering several arguments that may give the Commission pause before it imposes expanded PSL § 66(6) annual reporting obligations on wholesale generators.iii IPPNY contended that the premise underlying the Commission’s consideration of this issue was factually incorrect since, according to IPPNY, FERC has exempted wholesale generators from filing annual reports since at least 1990. IPPNY offered several other arguments, the most compelling of which may be its contention that the mechanical application of PSL § 66(6) would unduly burden wholesale generators while providing no additional benefits to the retail customers. Indeed, 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 Commission presumably will want to avoid such consequences as it carefully weighs this issue.
Filings relating to this proceeding are found under Case 11-M-0294, which can be accessed on the Commission’s website (http://www.dps.state.ny.us).
For more information, please contact Michael Murphy at mmurphy@bdlaw.com.
i See Case 91-E-0350, Wallkill Generating Company, L.P., Declaratory Ruling on Regulatory Policies Affecting Wallkill Generating Company & Notice Soliciting Comments, Aug. 21, 1991; Case 91-E-0350, Wallkill Generating Company, L.P., Order Establishing Regulatory Regime, Apr. 11, 1994; Case 98-E-1670, Carr Street Generating Station, L.P., Order Providing for Lightened Regulation, Apr. 23, 1999.
ii Case 11-M-0294, In the Matter of the Filing of Annual Reports Pursuant to Public Service Law §66(6)by Electric and Gas Corporations Subject to Lightened Ratemaking Regulation Under the Wallkill Ruling and Order, Notice Soliciting Comments, June 3, 2011.
iii Case 11-M-0294, In the Matter of the Filing of Annual Reports Pursuant to Public Service Law §66(6)by Electric and Gas Corporations Subject to Lightened Ratemaking Regulation Under the Wallkill Ruling and Order, Comments of Independent Power Producers of New York, July 18, 2011.