NYSEG Takes Aim At NYISO Report

New York State Electric & Gas Corp.(NYSEG) last Wednesday took direct aim at a recent New York Independent System Operator (NYISO) report on the state's power market, asserting, among other things, that it "unrealistically assumes" that 8,600 MW of new generation for the state can be built by 2005.

There are "serious problems" with generation supply and a lack of transmission and gas pipeline infrastructure, which will prevent the emergence of a robust wholesale electric market in New York state until 2008, NYSEG countered in its own report last week, entitled "New York State's Electric Energy Crisis and NYSEG's Comprehensive Solution."

The assumptions made by NYISO in its report -- "Power Alert: New York's Energy Crossroads" -- understate the potential crisis facing the state both in terms of wholesale and total electric price increases as well as system reliability, NYSEG said. The NYISO report falls short because, according to the utility, it is premised on outdated prices for gas and does not take into consideration any natural gas pipeline transportation or delivery costs.

NYSEG also said the ISO's recommendations to correct the problem will subject New York customers to unstable and volatile electric wholesale market prices at a point in time when a robust wholesale electric market is years away.

The NYISO report "falls short" in evaluating the size of the crisis and does not describe a realistic solution to shield New York electricity customers from volatile wholesale electric energy price spikes, NYSEG said.

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