PSC Blocks Assemblyman Brennan's Efforts to Undermine New York Energy Markets
Albany, N.Y. 10/28/15 - Assemblyman James Brennan's efforts to undermine New York's competitive wholesale electricity markets to the detriment of consumers have once again failed. For the second time in as many years, the Secretary to the New York Public Service Commission (PSC) has denied the Assemblyman access to confidential power sector financial and operating data redacted from annual reports which generation owners are required to provide to the PSC. The Secretary's decision protects the integrity of competitive markets and the consumers that benefit from the proper functioning of those markets.
"We've been down this road before," said Gavin Donohue, President & CEO of the Independent Power Producers of New York (IPPNY). "Assemblyman Brennan has made it abundantly clear that he neither appreciates the consumer benefits nor understands the mechanics of New York's competitive electricity markets."
In uniform clearing price (UCP) auctions administered by the New York Independent System Operator (NYISO), power generators bid into the market the quantity of electricity that they are prepared to produce and the price they wish to receive for that electricity. The NYISO then selects the proper mix of generators to supply demand at the least cost while meeting system reliability requirements. In selecting the generators, the NYISO begins at the lowest offer and progresses through the higher offers until there is enough generation to meet demand. Each selected bidder is awarded the bid price of the last unit chosen (the highest of all selected bidders). This is referred to as the UCP, and it is employed because it keeps bid prices and, therefore, the price paid for wholesale electricity lower than it would be otherwise.
"Keeping the financial and operational data of generators private is critical to ensuring competitive bids," said Donohue. "If that data were to become public, a generator could use the information to determine how much it could raise its bids into the market and still remain below the bids of its competitors. That's why the information in question is considered a trade secret. I'm sure that the Assemblyman wouldn't expect Coca Cola to reveal its secret recipe or McDonald's to divulge how it prepares its special sauce, but that's exactly what he's asking of the power sector. Fortunately, yesterday's decision by the PSC Secretary will protect consumers from a very poor course of action."
-30-
