Competition in the Electric Industry Emerging Issues, Opportunities, and Risks for Facility Operators (1996) / Chapter Skim
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Competition in the Electric Power Industry: A View from New York
Competition in the Electric Power Industry: A View from New York
Pages 44-52
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From page 44... ...
The "Price Problem" in New York Electric power prices in New York are among the highest in the nation for both industrial and residential customers. Figure ~ is a map showing the average price paid by industrial customers in each state, using data from Edison Electric Institute reports.
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From page 45... ...
NH 8.83 VT7.88 ~ ~= l -- am ~ ~ 2 ~ ~: 532 ~ ~8.93 CT 9.33 NJ 8.1 0 DEL 4.36 ; DC 4 55 4.77 MD 4.37 FIGURE I Average revenue for electric utilities in cents per kilowatt hour: industrial class.
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From page 46... ...
1 990 1% = $26 Million Other Operation Expenses - Taxes 14% Benefits / 16% Profit 2% l:~2% \\ Depreciation t~ i.: Interest & Preferred Stock Fuel Purchases 1 995 1% = $33 Million Other Operation Expenses Taxes Profit 2% Depreciation Wages& ma< 10% ~ Benefits/ ~ ma_ 9~A._ I MUGS / ~ Interest & \ lam Preferred Stock ~ l I am_ Fuel Purchases FIGURE 2. ABocation of electric revenue for the Niagara Mohawk Power Corporation.
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From page 47... ...
It is a tariff that allows Niagara Mohawk the flexibility to sign contracts with pricing terms much different from the standard rates under which customers normally purchase electricity. The state regulatory commission requires justification of any such discounts on the basis of the customers' competitive alternatives.
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From page 48... ...
Customers would pay the full costs of the necessary metering and communications technology for hourly pricing, and for stranded costs remaining after contributions by Niagara Mohawk and independent power producers (see items 5 and 6 below)
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From page 49... ...
Under current state and federal law, the New York Public Service Commission has the authority to order such independent power producers to obtain commercial acceptable firm security for these obligations, which would save Niagara Mohawk customers about $ ~ billion (net present value)
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From page 50... ...
The relevant state agencies are requested to take a variety of actions. The Public Service Commission would approve the proposal, including the use of condemnation by Niagara Mohawk in restructuring independent power producer contracts; issue an order requiring firm security from independent power producers with advance payment accounts; eliminate regulatory micromanagement; eliminate or reduce public purpose programs that cannot be supported by the market (such as subsidized demand-side management)
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From page 51... ...
If customer advocates and commissioners take stands against appropriate recovery of these costs, they will slow the process of restructuring immensely. The independent power producers are no different in that respect from the regulated utilities.
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From page 52... ...
Functional unbundling, if not complete financial separation, is imminent. ~ believe retail competition in generation will become a reality much more quickly than many observers expect.
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