State regulators are considering whether to allow utilities in New York to once again generate their own power.
The state forced utilities to sell off power plants in the 1990s to encourage more competition. Now the companies want to generate wind and solar power in order to help meet the state’s climate goals, they say, and shore up the grid.
They claim independent power companies have fallen short of keeping up with state targets, in part because of financial pressures and supply issues.
The Public Service Commission is weighing the change as it continues to consider ways to increase generation of clean and renewable energy in New York. Rochester Gas and Electric (RGE), New York State Electric and Gas (NYSEG) and other utilities have filed comments supporting the change.
“For decades, New Yorkers have been told that deregulation of the energy markets would lower costs and improve outcomes for customers,” the utilities’ parent company Avangrid said in a statement. “Yet many continue to face rising supply prices, and the state continues to grapple with attracting the generation needed to meet growing demand and advance its clean energy goals.”
But experts say it’s unclear whether the utilities can deliver.
“Obviously, the utilities are putting forward the claim that it'll lower costs, and the other side is saying that the utilities will just raise costs,” said Ari Peskoe, executive director of the Electricity Law Initiative at Harvard Law School. “A lot of this is about … who bears the risk from projects that don't turn out the way the developer intended. And when utilities build projects, they put the risk on the public.”
The Public Service Commission has not put a timetable on its decision, but some groups aren’t taking any chances.
The Independent Power Producers of New York has launched a six-figure campaign to fight the potential change. They acknowledged the challenges of the past few years, but said the utilities don’t hold the solution.
“Ultimately, it's bad for New Yorkers. It's just going to cause delays in projects that need to be built in the state,” said Gavin Donohue, the group’s president and CEO. “We have an economic renaissance underway in the state, and we need more investments in the state, not less.”
Utilities could use affiliated companies that are not subject to state regulations to generate power, Donohue said, but they often choose not to do so.
He also questioned whether utilities have the expertise to handle building the wind and solar facilities. The utility companies insist that’s not the case, claiming in state filings that they already have those resources in place and can add specialized expertise, as needed.
“Our energy future will require significant investment in new generation resources, greater market transparency, and an all-of-the-above approach to ensuring reliable, affordable power,” according to Avangrid. “That includes utility-owned generation, which should be part of the solution set alongside other generation resources."
New York is not alone in this discussion, Peskoe said. Pennsylvania, Ohio, New Jersey and Illinois are just some of the other states where utilities are making a similar push.
