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Move Afoot to Modify PURPA contracts

July 6, 1998
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Move Afoot to Modify PURPA contracts

New York State Electric &amp Gas Corp. (NYSEG) voiced its support for legislation to give states authority to modify non-utility generator contracts. Congressmen Gerald Solomon, Amory Houghton (R-NY) and Edolphus Towns (D-NY) introduced HR 4183, which would clarify the Public Utility Regulatory Policies Act of 1978.

Changes proposed are said to ensure just and reasonable costs for NUG power sold to utilities. State regulators would be permitted to modify prices utilities are currently required to pay non-utility generators so they do not exceed the market price of electricity at the time of delivery. The legislation also would establish programs to monitor non-utility generators to ensure they continue to meet Federal Energy Regulatory Commission requirements.

NYSEG said its customers will be forced to pay more than $2 billion in above-market prices for NUG power through 2009 when the last of its large NUG contracts expires. The legislation could result in an 8% to 24% drop in residential electric bills in 1999.

"Passage of this legislation is an opportunity to correct a failed public policy. In order for competition to benefit residential customers, we must renegotiate the Saranac (CalEnergy) and Lockport NUG contracts now," said Wes von Schack, NYSEG CEO. "Our residential customers should not have to pay these outrageous and unfair prices any longer."

Joe Fisher, Houston

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