Rep Joe Crowley Applauds Legislation to Lower Electricity Prices for New York Consumers and Businesses

Crowley Praises Governor Cuomo, Mayor Bloomberg for Efforts to Prevent Summer Rate Hikes

Today, Congressman Joe Crowley (D-Queens, the Bronx), a chief deputy whip in the Democratic leadership of the House of Representatives, applauded Governor Cuomo, Mayor Bloomberg, and the New York State Legislature for expediting passage of a tax relief bill that will prevent homes and businesses in Queens and the Bronx from being hit with a spike in electricity bills this summer due to an adverse ruling by the Federal Energy Regulatory Commission (FERC) earlier this year. Last month, Crowley, working closely with Mayor Bloomberg, led a bipartisan City delegation letter to the FERC seeking an appeal of the ruling and a delay in any resulting electricity price increase until all appeals were final.

“Families in Queens and the Bronx are struggling to make ends meet, and a spike in electricity prices on top of rising food, housing and gas prices would have made life even more difficult for them,” said Crowley. “I salute Governor Cuomo and Mayor Bloomberg for their tireless efforts in working with the Legislature to pass this critical electricity relief bill and I am pleased to have been a part of the effort to stop these rate hikes before they were passed on to consumers this summer.”

In January, the FERC ruled that City tax benefits for private electricity generators would no longer be calculated in the expected energy needs of the City. These tax benefits are used by the City to lower the rates paid by consumers for the cost of electricity. This adverse ruling could have led to an increase in electricity prices City-wide by up to $525 million a year, or an increase in electricity rates for every business and resident of New York City by 10-15 percent starting this summer.

The text of the bipartisan letter spearheaded by Crowley is below:

April 1, 2011

The Honorable Jon Wellinghoff
Chairman
Federal Energy Regulatory Commission
888 First Street, NE
Washington, D.C. 20426

Dear Chairman Wellinghoff,

We are gravely concerned about the impact of the Commission’s January 28th order (“Order”) on the New York Independent System Operator’s November 30, 2010 demand curve filing (ER11-2224), which will significantly increase the price paid for electricity supply by New York City customers over the next three years. If the Order is not reversed, the electricity rates of our constituents will rise dramatically without any clear justification or benefit.

The Commission’s decision to disregard any of the existing tax abatement opportunities made available by the City of New York, in addition to the other changes contained in its Order, could contribute to a rate increase for New York City electric customers of up to $525 million annually. This would represent up to a 12% increase in summer electric bills for the average residential customer in the first year alone. In its Order, the Commission decided that it would apply no tax abatement in determining the target price for building new generation capacity in New York City, even though the New York City Industrial Development Agency had approved a revised tax policy specifically intended to encourage new, clean and efficient generation in New York City.

Electric reliability is important, and providing adequate economic incentives for new electric generation when needed is also important. But, given the current and expected surplus of generation in New York City, higher capacity payments to generators are neither necessary nor justified and would instead provide windfall profits for the current NYC electric generators.

Furthermore, the existing generators are generally exempt from property taxes. And there are two New York City generators that are under construction and expected to come on line shortly that will also not be paying property taxes, including one project that is physically located in New Jersey (and which is planned to be electrically connected to New York City).

New York City, Con Edison, the NYISO, the State Public Service Commission and Consumer Protection Board and others have accordingly petitioned for rehearing of the Order, and we request that you do take the time to fully reconsider the impact of the Commission’s Order on the customers and citizens of the City of New York. Thank you for your consideration.

Sincerely,

Joseph Crowley

Edolphus Towns

Anthony D. Weiner

Eliot L Engel

Charles B. Rangel

Yvette D. Clarke

Jerrold Nadler

José E. Serrano

Gary L. Ackerman

Michael G. Grimm

Carolyn B. Maloney

Gregory W. Meeks

cc: Commissioner Cheryl LaFleur

Commissioner Phillip Moeller

Commissioner John Norris

Commissioner Mark Spitzer