What's happening
This bill abolishes the market clearing price in New York's wholesale electricity market and mandates annual or triennial utility rate reviews with enhanced regulatory oversight.
Why it matters
Ending the market clearing price system could significantly change how electricity prices are set. , likely making prices more reflective of actual supplier bids rather than the highest accepted bid, potentially lowering costs for consumers but also impacting generator revenues and market dynamics.
Annual or triennial regulatory reviews would increase oversight of utility rates and practices. , possibly increasing transparency and accountability, but also creating more frequent regulatory involvement in rate-setting, which could affect utility investment and operational decisions.
Mandating a pay-as-bid, descending clock auction for wholesale power could reduce price spikes and volatility. , but introduces new complexities for generators and may change incentives for investment in new power plants or grid reliability.
Expanded regulatory authority over reliability, maintenance, and conduct of utilities and generators could strengthen consumer protections and grid stability. , but may also constrain utility business models and require new compliance efforts, potentially influencing the broader energy market.
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Who cares
Headline styles
End Market Price Auctions
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to energy and telecommunications
- Referred to energy and telecommunications
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5633
2017-2018 Regular Sessions
IN SENATE
April 21, 2017
Introduced by Sen. GRIFFO -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Telecommunications
AN ACT to amend the public service law, in relation to abolishing the market clearing price
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 66 of the public service law is amended by adding three new subdivisions 29, 30 and 31 to read as follows:
29. Review the rates of any public utility on an annual basis, provided however that upon a determination by the commission that the public interest does not require such annual rate review, a review of rates may be undertaken at no more than three year intervals.
30. (a) Use the fullest extent of its powers to regulate the distribution of retail electric energy to retail customers in the state and, to the extent not prohibited by federal law, the transmission of electric energy in the state.
(b) A market clearing price mechanism for the purchase of power shall be forbidden for purchases made through the wholesale market via a bid procurement or auction process held by the independent system operator ("ISO") of New York, or any successor in law and function to such entity.
(c) Such auction or bid procurement process shall be overseen by the commission, which shall require a descending clock, pay-as-bid auction in which bid amounts will continue to fall until no bidder is willing to supply electricity at a lower price. For the purposes of this article "descending clock auction" shall be defined as an auction in which the prices drop throughout an auction of time-limited duration; starting high and being reduced gradually until the supply bid is just sufficient to meet the electrical load to be procured. Prices that tick down in a round decrease by a decrement; which is a given percentage of the previ-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07504-01-7
S. 5633 2
ous price. Bidders holding the final bids when the auction closes are the winners.
(d) Bidders will be forbidden from knowing when the amount of electricity supply fills requirements.
(e) The commission shall appoint an independent market advisor to review market practices and behavior; that will recommend to the ISO actions that can be taken to mitigate or correct behavior by market participants that was reasonably calculated to, or had the effect of affecting the function of the auction process so that the winning bidder was not the lowest price bidder.
(f) Utilities may buy power from markets other than the ISO, or via contracts with individuals or groups of generating entities, provided that such electrical energy must be offered to customers at just and reasonable rates.
31. (a) The commission shall exercise its full jurisdiction over the ISO of New York.
(b) The commission shall regulate the reliability, quality and maintenance by transmitters and distributors of their transmission and retail distribution systems.
(c) The commission shall regulate the reliability, quality, maintenance, and price of generators.
(d) The commission shall not require any incumbent electric utility to divest itself of any generation, transmission or distribution assets pursuant to any provision of this chapter without specific authorizing legislation for such purpose.
(e) The commission shall develop codes of conduct governing the conduct of incumbent electric utilities and affiliates thereof when any such affiliates provide, or control any entity that provides, generation, distribution, or transmission services to the extent necessary to prevent impairment of competition. Nothing in this chapter shall prevent an incumbent electric utility from offering metering options to its customers.
§ 2. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the public service law, in relation to abolishing the market clearing price
Purpose
To abolish the use of a market clearing price relating to the buying of electricity at an auction held by the Independent System Operator.
Summary of provisions
Section 1. Amends Section 66 of the Public Service Law by adding three new subdivisions 29, 30 and 31.
29. Requires the PSC to review rates at least every three years.
30. Prohibits a market clearing price.
31. Requires the PSC to exercise its fullest jurisdiction over the ISO and bans the PSC from requiring electric utility companies from divesting itself of electric generating facilities.
Justification
The health, welfare, and prosperity of all New York residents require the provision of adequate, efficient, reliable, environmentally sound, and lowest-cost electric service at affordable prices.
The current experiment in deregulation of the electric industry in New York has failed to achieve the goals stated to the public service commission in its Opinion 96-12, issued and effective on day 20, 1996. The effect of the de-regulation of New York's electric industry has resulted in constantly escalating and excessive costs of electricity, and lowered reliability and safety of the electrical networks in the state of New York; posing a serious threat to the economic well being, health, and safety of the residents of and the commerce and industry in the state.
The auction system monitored and administered by the independent system operator that is used to distribute energy has resulted in skyrocketing electric bills. This legislation will abolish this costly auction system and replace it with one that is less costly and more within the public's interest.
Legislative history
2015-16 - S. 3540 - Energy Committee/A. 1216 - Corporations, Authorities & Commissions. 2013-14- S. 1181 - Energy Committee/A. 6002 - Corporations, Authorities & Commissions.
Fiscal implications
N/A.
Effective date
Immediate.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.