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on IPP contracts

Utilities get PSC’s ear
on IPP contracts

The state Public Service Commission is looking at proposals that would make it easier for public utilities to cut out independent power producer contracts.
In a statement released yesterday, PSC Chairman John O’Mara echoed a song long sung by investor-owned electric companies, saying that current IPP contracts push electricity costs higher and thus fuel rate increases.
Electric utilities are required to buy power from independents under a 1978 federal law called the Public Utility Regulatory Policy Act.
The energy-crisis-era rule was meant to encourage alternative energy production such as solar and hydropower, and thus cut U.S. dependence on foreign oil.
A 1981 New York regulation followed on the federal law, setting the price publicly owned utilities had to pay for IPP power at 6 cents a kilowatt hour. The state rescinded the ruling in 1992 after utilities’ own cost of production fell below the 6-cent mark. But utilities in the state by then had signed contracts with IPPs to buy power at the rate mandated in 1981.
The PSC said it will look at expediting utilities’ requests to curtail IPP contracts. Federal law allows such curtailment if power bought from IPP suppliers increase the utilities’ operating costs.
The state regulatory agency also said it will consider a request from Niagara Mohawk Corp. to let utilities monitor IPP facilities’ compliance with federal standards.
Among the state’s investor-owned utilities, Niagara-Mohawk has complained most bitterly about IPPs, telling the PSC that its IPP obligations could force it into bankruptcy.
Rochester Gas and Electric Corp. has successfully fought its sole IPP supplier, Kamine Besicorp of Allegany, N.Y., filing cases in federal and state courts in Rochester.
A federal judge in Rochester ruled that RG&E could cut its payments to Kamine from 6 cents a kilowatt hour to 2 cents.
Kamine subsequently filed a bankruptcy petition in a New Jersey court, and ceased operations.
RG&E spokesman Michael Power said RG&E is trying to get the bankruptcy case transferred to the Western District of New York. The state case is dormant awaiting the outcome of Kamine’s bankruptcy proceeding, he said.
Power called O’Mara’s statements “encouraging.”
“(The PSC) is at least stepping to the plate,” he said. “I think now they recognize that prices will not be reduced until this is resolved.”

Utilities get PSC’s ear
on IPP contracts

The state Public Service Commission is looking at proposals that would make it easier for public utilities to cut out independent power producer contracts.
In a statement released yesterday, PSC Chairman John O’Mara echoed a song long sung by investor-owned electric companies, saying that current IPP contracts push electricity costs higher and thus fuel rate increases.

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