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NY Heavy Into Analyzing Retail Market

NY Heavy Into Analyzing Retail Market

Four stakeholder committees set up last March by the New York Public Service Commission (PSC) have identified the key roadblocks in the state's stalled retail energy deregulation process. By next spring, they expect to have some solutions - if it isn't too late.

That the electric market wasn't functioning very well was evident in the summer's power price spikes, emergency price caps and customer complaints. This winter may give the committees a lot more real-time input about how well the deregulated natural gas market and power markets function during a peak heating season.

The committees submitted their first conclusions late last month and are expected to make final recommendations to the commission by next spring.

One major problem the committee on Public Involvement and Input discovered was that a large number of New Yorkers didn't even know they had a choice of suppliers. Market surveys in 1999 showed that 61% - about the same percentage as in 1998 - were aware they had a choice of power suppliers, but only 24% knew about retail competition for gas.

Of those who did know about and participate in natural gas choice programs, a survey showed 54% and 71% of residential and commercial customers respectively were "satisfied" with their gas marketer. The study also pointed out that satisfaction varied among utility service territories. Only 36% of residential and 53% of commercial customers in the Con Edison service territory were satisfied, whereas the National Fuel territory reported satisfaction levels of 76% for residential and 83% for commercial customers.

Other stakeholder committees turning in first drafts last were the Public Benefits Committee, Future Role of Regulated Utilities Committee, and the Retail Development Committee. The groups include representatives of utilities, energy service companies, state agencies, consumer advocate groups, environmental groups and other interested parties.

"There is a psychological process that groups go through as they work together toward a common goal," said ALJ Jeffrey E. Stockholm. "What all the judges have tried to do is to give them a common goal and the first piece of it was generating these reports, now the second part is the analysis which is going to be more difficult. In my opinion the groups have come together and the committees are working extremely well."

"Phase two is going to be a much more compressed time period than phase one, so I am not sure exactly what level we are going to be able to address a lot of these things," said Public Benefit Program co-Chair and Niagara Mohawk representative Jack Ziegler. "But I am sure there is a meeting of the Executive Committee on Friday and we will get some direction from the judges at that time."

"I think it [choice] certainly can work, 'can' has never been a doubt, but whether it will is another thing entirely," said a committee member. "There are all kinds of variables. Some people say that ISO caps are making warning signs towards generators, I don't think so, the ISO caps that have been proposed are high enough that I don't think they should scare off many generators. I certainly think a form of competition can and will exist in New York. "In the birthing process, there is always a little bit of pain, the question is whether you can ride out the pain."

Alex Steis

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