N.Y. Assemblyman to Introduce Bill to "Re-regulate" Price of Electricity

In an op-ed published by CityLimits.org, New York Assemblyman James Brennan said that the "clear answer" to excessive profits made by unregulated power generators under the New York market design is to "re-regulate the price of electricity."

Brennan cited a 2012 study performed by his office, previously filed with the PSC, which concluded that, "13 privately-owned, 'deregulated' plants generating about 40 percent of the electricity in the State were charging prices at least $1.1 billion higher than if the companies owning the plants were still regulated."

"Overall, the plants in the downstate electricity market serving New York City and Westchester County were overcharging consumers by about $820 million a year, earning anywhere from 40 percent to more than 70 percent return on equity. The overcharges account for at least 10 percent of the electric bill, but are likely to be higher since not every plant producing electricity was analyzed," Brennan said in the CityLimits.org piece.

"The clear answer to this high-priced problem is to re-regulate the price of electricity, and my office will be introducing legislation soon to accomplish this purpose," Brennan said.

"The New York State Public Service Commission would be directed by a new law to re-regulate the power companies 'deregulated' by their previous actions, setting rates according to traditional methods, meaning taking the company’s actual costs and then permitting them a fair return on investment appropriate to the risk involved," Brennan said.

"Standard cost-based regulation of price of electricity is the answer to this profiteering," Brennan said in a recent news release.

Brennan serves as Chair of the Assembly Committee on Corporations, Authorities and Commissions.

Additional commentary by Matters on Brennan's op-ed will follow this week.