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The Real Deal: Central Hudson Rates Going Up

Updated: Wednesday, May 21 2014, 01:03 PM EDT
ALBANY—As if the 120% increase in our winter heating bills wasn't shocking enough, Central Hudson customers now have to deal with another hike on their energy bills.  This increase has nothing to do with winter, weather or deliver, it's coming to you compliments of the federal government.
We were all slammed with huge winter heating bills but now Central Hudson customers are getting a second punch in the gut, a notice from the utility to expect a 6-10% increase on the supply section of the electric bill courtesy of the Federal Energy Regulatory Commission.  The State of New York is broken up into 11 electric gird load zones but FERC has combined the four zones in lower New York and New York City and is demanding that utilities operating in those zones buy electric from generators who make it in those zones.  "The capacity that we will be purchasing going forward will be from a limited geographical zone now and that is going to raise the market price for capacity which we've seen already," says John Maserigian, a spokesman for Central Hudson.
Believe it or not, those higher rates are exactly what FERC wants, "those capacity prices will vary and they will fluctuate according to market conditions, so if new resources come in to that area, those capacity prices will go down accordingly in the market," says David Flannigan of the New York Independent System Operator.  Translation:  FERC is hoping more generators will set-up downstate which would ease congestion on the state-wide transmission system and hopefully give us all lower energy rates but there are no guarantees.
"Raising prices this summer to demonstrate a need is unnecessary and only creating a burden to consumers and a windfall to existing members of the market…We do have adequate generation in the state, what we're missing is the transmission to get the power from Western New York to Downstate New York and from Northern New York to Downstate New York," says Audrey Zibelman, the Chairwoman of the NYS Public Service Commission.  There are a number of proposals and projects underway that should help the infrastructure issues but permanent solutions are still likely years away and these new zones are here now.
Central Hudson has filed suit against FERC requesting a stay on further capacity auctions under the new zones.  The utility requested FERC either cancel, postpone or phase in the new zones to allow more time for consideration of alternative solutions.  The NYS Public Service Commission also joined the suit.  The US Court of Appeals will hear motions on the case on June 3rd.The Real Deal: Central Hudson Rates Going Up

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