Add More Power to Energy Market

Poughkeepsie Journal Editorial, Friday, June 7, 2002

In May 1996, state officials ordered New York's electricity market open to competition -- promising this would lower consumer prices.

Six years later, residents have yet to see real benefits in monthly bills. And they won't until more energy is available. So now is the time to get more power plants on line, and put up more high-voltage wires to get that energy where it's needed.

Most mid-Hudson residents may not realize how much high prices still affect the rest of the state. People in this region may sometimes gulp to pay nearly $47 a month to local supplier Central Hudson Gas & Electric Corp. But that's nothing like the scream coming from nearby homeowners who get their electricity from New York State Electric & Gas or Consolidated Edison -- they see bills of $72 to $77 for the same month.

But unusually low prices locally aren't going to last forever. Central Hudson -- and parent company CH Energy Group Inc. -- can keep prices low for now because of a special deal negotiated a few years ago. Under deregulation, the Poughkeepsie-based company was forced to sell its two power plants and focus on delivering electricity to customers. But executives won an advantageous price for wholesale power with the plants' new owners.

Residents could see their electric bills shooting up when this deal runs out at the end of 2004. After that, those new power plant owners will likely look for higher profits on the open market. And Central Hudson will be hard pressed to get another deal anywhere near as good.

More transmission lines also needed

Unless, by then, there's enough electricity available that competition keeps prices down. A dozen or so plants are in the permitting process, or have been approved, including one in the Town of Athens, Greene County. It's very difficult to place these facilities in urban areas, given their size and fuel needs. That often translates into beautiful countryside being marred -- as is the case with Athens, which is near Olana, the home of famed 19th century landscape painter Frederic Edwin Church.

But even when they're better situated than the Athens plant, the next problem is getting the electricity to energy-hungry urban areas like New York City. The high-voltage lines between upstate and the city are already at capacity. More lines need to be built -- such as along the New York State Thruway corridor.

State and federal officials can also keep pressuring the industry to develop clean, renewable energy sources, such as solar, wind and geothermal power. And, as we head toward summertime, every local resident and business owner can help conserve -- such as switching off lights that aren't being used, and turning the air conditioner back a few degrees.

Deregulating the energy industry seemed to be a good idea. But it will not be able to prove itself until a lot more electricity is made available.

Journal special report on deregulation